O

man has proposed a preferential bilateral trade and investment agreement with China as the two countries seek to deepen economic ties and expand cooperation across strategic industries.

Sultan Haitham bin Tariq al-Said made the proposal during a meeting with Chinese President Xi Jinping at the Great Hall of the People in Beijing on Monday, describing the agreement as a way to create new opportunities for trade and investment.

“We are confident that such an agreement would open new avenues for trade and investment, facilitate and enhance commercial and investment exchanges between our two nations,” Haitham told Xi, according to remarks reported by Oman’s state-run news agency.

The proposal comes as Oman seeks to increase trade with its largest commercial partner and attract investment into sectors that form part of its efforts to diversify its economy beyond oil exports.

Haitham said Muscat was interested in establishing joint investment funds covering renewable energy, artificial intelligence, digital technologies, space and defense.

The discussions also emphasized closer cooperation between financial and investment institutions, suggesting that the proposed partnership could extend beyond conventional trade in goods and energy.

Xi described closer relations with Oman as a “shared strategic choice” for both countries, saying he was ready to work with Haitham to elevate their strategic partnership and contribute to regional stability and prosperity.

Energy and technology at the center of economic cooperation

China is Oman’s largest trading partner, with bilateral economic relations supported by Omani exports of crude oil and other energy products to the Chinese market.

The two countries have also been developing commercial and tourism links. Direct flights between Beijing and Muscat began in November 2025, providing additional connectivity for business and travel.

Oman is seeking to expand its renewable energy supply chains and digital commerce as it pursues broader economic diversification. Cooperation with China could provide access to investment, technology and industrial expertise in areas including clean energy and advanced digital infrastructure.

The proposed joint investment funds would offer a framework for financing projects in several emerging sectors. However, the announcement did not specify the size of the funds, their investment timelines or the projects that would receive priority.

Haitham also highlighted the importance of cooperation between financial institutions, indicating that strengthening investment channels would be an important part of the proposed economic relationship.

The talks reflect China’s continuing efforts to strengthen its economic and diplomatic partnerships across the Middle East, where energy trade, infrastructure investment and technology cooperation have become increasingly important areas of engagement.

Historic visit underscores growing strategic ties

Haitham arrived in Beijing on Sunday for a two-day state visit, the first by an Omani head of state since the two countries established diplomatic relations in 1978.

His arrival was followed by an official welcoming ceremony on Monday, where he and Xi reviewed an honor guard at the Great Hall of the People.

Although the regional conflict was not directly addressed in Haitham’s opening remarks, the Omani leader praised China’s efforts to promote international security, stability and cooperation.

“We further express our deep appreciation for China’s positions on key issues concerning our region,” he said.

The visit comes as Beijing seeks to maintain diplomatic engagement across the Middle East amid continuing regional tensions. China’s Foreign Ministry said last week that Beijing would soon send special envoys to countries in the region to encourage dialogue and de-escalation.

Oman’s proposal therefore carries both economic and diplomatic significance, although the discussions announced on Monday focused primarily on bilateral trade, investment and strategic cooperation.

The two governments have described the visit as an opportunity to establish a new phase in their relationship. Whether that ambition produces a formal preferential trade agreement and concrete investment commitments will depend on subsequent negotiations.

(Source: Reuters)

I

was thirteen when I first read George Orwell’s 1984. Growing up in a politically unstable region, the novel felt like a commentary on the world outside my window.

Throughout human history, every iteration of state power deployed mechanisms of control to consolidate authority and resources for the ruling elite. Orwell’s genius lay in capturing this universal mechanics of state power.

Orwell imagined a state that demanded obedience through surveillance and controlling flow of information. Generative AI, state-controlled algorithms, digital identity systems, and automated public infrastructure now determine what citizens should believe, what resources they survive on, and whether authentic public opinion exists at all.

Unlike Orwell’s oppressive telescreens, contemporary technologies are carried voluntarily. Citizens willingly purchase, update, and carry the devices of their own oversight, surrendering their autonomy for digital convenience. In fact, digital architecture continuously fosters dependency of present life on these tools.

Consider the control of information. Orwell’s Ministry of Truth rewrote the past by destroying records and manufacturing official narratives. Today, mass reliance on generative artificial intelligence is quietly conditioning populations to trade cognitive friction for friction-free answers, outsourcing basic tasks, writing, and critical reasoning to algorithms. As individuals become dependent on quick machine outputs, they are systematically conditioned to think, articulate, and structure arguments in uniform mannerisms dictated by the statistical averages of large language models.

Modern digital control

This homogenization of thought acts as an organic counterpart to Newspeak. By funneling human expression through standardized stylistic templates and algorithmic consensus, generative AI flattens individual idiosyncrasy, critical divergence, and creative rebellion, conditioning society to accept machine-curated outputs as neutral truths rather than biased reflections of corporate training data.

Modern digital control decides which information gains visibility, which narratives are deprioritized, and which voices are quietly shadow banned. Information simply gets buried under automated streams of synthetic noise or throttled at the network level. In 2025 alone, human rights monitors documented over 300 internet shutdowns across more than 50 countries during periods of civil unrest and armed conflict.

When access to the internet is restored, the medium itself acts like a double-edged sword. For populations living under military occupation or authoritarian rule, the smartphones required to seek aid or document atrocities simultaneously expose their locations, networks, and identities to state intelligence apparatuses.

The danger of algorithmic governance is hardwired into the administrative machinery of Western democracies as well. Across the globe, governments are outsourcing public administration to automated risk-scoring models that lack basic transparency and due process.

In the Netherlands, the court system was forced to strike down the government’s SyRI (System Risk Indication) algorithmic risk model, which was deployed to detect welfare fraud by aggregating personal data across public agencies. The system disproportionately targeted low-income and racial minority neighborhoods with opaque scoring metrics, offering citizens no clear avenue for legal appeal.

Fraud-detection platforms

In the United States, automated fraud-detection platforms, such as Michigan’s MiDAS system, wrongly flagged tens of thousands of unemployed citizens for fraud, stripping them of benefits and imposing financial penalties without human oversight.

Algorithms inherit the assumptions, limitations and biases of the systems in which they are built. When an opaque risk score determines access to public benefits, or when a person cannot discover why a decision was made, technological efficiency can become a substitute for due process.

Unlike the centralized state apparatus of 1984, contemporary surveillance relies on a complex, transnational architecture connecting tech monopolies, data brokers, and defense contractors.

Silicon Valley tech giants control the cloud infrastructure and generative artificial intelligence models that feed public consciousness, while states purchase surveillance capabilities off the shelfs. This creates an asymmetric alignment of commercial profit and state security. Even as corporate frontier labs race to deploy increasingly autonomous models, acknowledging catastrophic safety risks and deceptive alignment failures in their technical disclosures, policymakers around the world actively resist binding international regulations in favor of technological dominance.

Former Anthropic safety researcher Jacob Coxon publicly warned of a 10 percent chance of AI causing human extinction within the decade, echoing warnings from pioneers like Geoffrey Hinton and institutions like the Centre for International Governance Innovation. Yet at the United Nations General Assembly, U.S. President Donald Trump explicitly dismissed existential concerns, declaring that official U.S. documentation would rebrand “artificial intelligence” as “Super Intelligence” (SI) and vowing not to rein in growth.

When public institutions become dependent on privately controlled infrastructure, who sets the limits on its use? Who can audit the systems making consequential decisions? And what happens when a technology becomes so deeply integrated into public administration, financial networks or national security that abandoning it carries prohibitive costs?

Is AI weightless?

Crucially, the popular illusion that AI is a weightless, virtual cloud conceals an intensely material reality, massive industrial facilities guzzling water, coal, and gas to train and run frontier models. This computational thirst is reviving fossil fuels, keeping aging coal plants online and burning gas to guarantee 24/7 baseline electricity. In regions across South Asia, including India, Pakistan, and Bangladesh, where groundwater tables are already severely depleted and over 1.3 billion people face water stress, hyperscale data centers receive guaranteed municipal water concessions for evaporative cooling, prioritizing corporate server heat management over agricultural irrigation and drinking water. In developing nations across Sub-Saharan Africa and South Asia, data centers operate thousands of diesel generators as power backups, emitting nitrogen oxides and fine particulate matter directly into adjacent residential areas and driving up local rates of respiratory illness.

While compute power, proprietary software, and market capitalization are overwhelmingly concentrated in wealthy Northern nations, the physical, environmental, and human burdens are offloaded onto the Global South. The hardware supply chain depends on rare earth minerals like cobalt, lithium, and nickel extracted from open-pit mines in the Democratic Republic of Congo and across Southern Africa, destroying rainforest ecosystems and contaminating watersheds.

The lifecycle ends where it begins: millions of tons of high-performance server hardware, discarded after short 2 to 4-year operational lifespans, are shipped as electronic waste to toxic dumping grounds like Agbogbloshie in Ghana, where local workers burn components in open fires and face severe dioxin, lead, and mercury poisoning. Furthermore, the human labor required to train these models relies on low-wage workers in Kenya, Uganda, India, and the Philippines, paid fractions of Western minimum wages to review and filter toxic content without healthcare support.

The ultimate power of modern surveillance lies in its psychological efficiency and structural asymmetry. The modern Big Brother does not need a telescreen in every living room, it is enough to control the interconnected digital infrastructure through which society communicates, accesses knowledge, and survives.

A

wave of youth-led demonstrations is sweeping across Europe, with Generation Z protesters taking to the streets to demand affordable housing, better education, economic opportunities and political accountability, as growing frustration with established leadership fuels an increasingly influential movement.

Thousands of young demonstrators have mobilized across France, Italy, Belgium and Albania, while student-led protests in Serbia culminated in the electoral defeat of longtime leader Aleksandar Vucic following nearly two years of demonstrations.

Further protests are scheduled in Germany this weekend, highlighting the expanding geographical reach of a movement driven by young Europeans who say their governments have repeatedly ignored their concerns.

In Brussels, 19-year-old student Maya Gourdel has joined demonstrators demanding improvements to education and living conditions, adopting protest slogans inspired by the film The Hunger Games.

For many participants, the demonstrations represent more than frustration over individual government policies. They reflect a broader sense that younger generations are being denied economic security and meaningful opportunities.

Rising living costs and deteriorating schools fuel youth anger

Economic pressures have emerged as a central driver of the demonstrations, particularly among students facing expensive housing, limited employment prospects and deteriorating public services.

A European Union survey published in 2025 found that rising prices and living costs concerned 40% of people aged between 16 and 30.

Among the 92.7 million EU residents facing poverty or social exclusion that year, young adults aged 18 to 24 recorded the highest risk, at 26.3%, compared with 18.8% among people aged 65 and older.

In Italy, 21-year-old student Chiara described the protests as an expression of accumulated frustration with a political establishment that has failed to provide younger generations with a credible future.

She pointed to schools suffering from teacher shortages and deteriorating buildings, alongside the prospect of poorly paid employment and increasingly unaffordable accommodation.

Similar grievances have emerged in France, where 17-year-old student Bilal Narjissi criticized conditions at his school near Paris, citing previous rat infestations and an incident in which students were evacuated after a roof collapsed into a courtyard.

The demonstrations have occasionally escalated into violence, particularly in France, where thousands of businesses have reportedly been damaged or looted in recent weeks.

Police have deployed water cannons and stun grenades during confrontations with protesters.

The unrest has also intensified debate over generational inequality in government spending.

According to French think tank OFCE, people older than 60 represent approximately one-quarter of France’s population but own 60% of the country’s wealth.

A French government report published in October found that pension expenditure increased by 2.5 percentage points of GDP between 2000 and 2023, while education spending declined by half a percentage point.

Serbia’s political upheaval inspires protesters across Europe

Serbia has provided the movement with its most significant political victory so far, after student-led demonstrations helped bring an end to Vucic’s longstanding leadership through parliamentary elections.

The outcome followed nearly two years of protests against perceived corruption and authoritarianism.

Student protester Stasa Piletic described the election result as a moment of relief and victory, although the movement now faces the challenge of translating protest momentum into effective governance.

Elsewhere, Albania has witnessed growing demonstrations against Prime Minister Edi Rama’s government over allegations of corruption, inadequate education and limited employment opportunities.

Xyke Kurti, a 19-year-old architecture student, criticized the government for failing to respond to protesters’ demands, arguing that many young Albanians increasingly see their futures outside the country.

In Belgium, Gourdel similarly accused political leaders of ignoring peaceful appeals until demonstrations became more confrontational and attracted media attention.

The expanding movement illustrates a growing generational divide across Europe, with young people questioning whether existing political institutions can adequately address their economic and social concerns.

As further demonstrations approach in Germany, Europe’s governments face increasing pressure to respond to a generation demanding not only immediate financial relief but also meaningful influence over decisions shaping its future.

(Source: Reuters)

G

lobal debt has surged beyond $365 trillion, placing governments under mounting financial pressure as rising interest payments consume public budgets and intensify economic frustration across Europe, where hundreds of thousands of protesters have taken to the streets demanding relief from soaring living costs.

According to the Institute of International Finance (IIF), worldwide debt held by governments, businesses and households increased by approximately $10 trillion during the first half of 2026, reaching a level equivalent to roughly $44,000 for every person on the planet.

The unprecedented debt burden comes as major economies face increasingly expensive borrowing conditions, forcing governments to allocate greater portions of their budgets to interest payments rather than public services.

The consequences have become particularly visible in France, where nationwide demonstrations over living costs, stagnant wages, unaffordable housing and underfunded education have highlighted growing dissatisfaction with the country’s economic direction.

More than 550,000 people participated in demonstrations across France on Saturday, according to the Interior Ministry, following weeks of student-led protests.

Similar demonstrations have erupted in Belgium, Italy and Portugal. While many gatherings remained peaceful, some descended into clashes, looting and fires.

France faces mounting debt crisis as borrowing costs surge

France has emerged as a major source of concern in European financial markets, with its government borrowing costs reaching their highest level since 2002.

The country currently pays approximately 5% to borrow money through 10-year government bonds, considerably higher than Germany’s 3.41%.

More strikingly, French borrowing costs have surpassed those of Italy and Greece, two countries that experienced severe financial difficulties during the eurozone sovereign debt crisis.

Only the United Kingdom, which operates outside the eurozone, currently faces higher borrowing costs among the major European economies examined.

The widening gap between French and German bond yields reflects investors demanding greater compensation for lending to Paris amid concerns about its fiscal outlook.

France’s public debt has reached approximately $4.2 trillion, equivalent to 118.5% of its gross domestic product, placing it fifth globally in absolute government debt.

The International Monetary Fund projects that France’s debt could climb to 121.8% of GDP by 2030, further complicating efforts to stabilize public finances.

Rising bond yields carry significant consequences for government spending.

When countries issue debt at higher interest rates, they must devote more resources to servicing their financial obligations, potentially leaving less funding available for hospitals, education, infrastructure and pensions.

Governments facing such pressures may eventually be forced to increase taxation, reduce public expenditure or borrow even more money.

The situation has revived memories of Europe’s sovereign debt crisis between 2010 and 2012, when soaring borrowing costs pushed countries including Ireland and Portugal into international financial assistance programs.

Global interest payments exceed annual defense spending

The debt challenge extends far beyond Europe.

The United States remains the world’s largest government debtor, with outstanding public debt reaching approximately $41.4 trillion, equivalent to 127% of its economy.

China follows with $22.5 trillion, or 104% of GDP, while Japan holds $8.7 trillion in government debt and has the highest debt-to-GDP ratio among major economies, at approximately 199%.

The United Kingdom’s government debt stands at $4.4 trillion, representing 102% of GDP, while Italy owes approximately $3.7 trillion, equivalent to 138% of its economy.

Germany, by comparison, carries $3.5 trillion in public debt, representing a significantly lower 65% of GDP.

The mounting financial obligations are accompanied by an increasingly expensive global interest bill.

Advanced economies paid more than $3.3 trillion in interest on government bonds over the past year, exceeding estimated annual worldwide spending on defense, artificial intelligence and clean energy individually.

Global defense expenditure stood at approximately $3.1 trillion, compared with $2.6 trillion for artificial intelligence and $2.3 trillion for clean energy.

The growing cost of servicing debt is also likely to affect households, as higher government borrowing costs can contribute to increased interest rates on mortgages, vehicle financing and consumer credit.

For policymakers, the challenge is balancing fiscal sustainability against growing public demands for economic relief.

With governments facing pressure to reduce deficits while citizens demand greater investment in essential services, the global debt surge is becoming not only a financial concern but an increasingly significant political challenge.

(Source: Aljazeera English)

A

rtificial intelligence has spent a decade being sold as a technology story: smarter language models, autonomous agents, unprecedented productivity. But the more consequential story is financial. AI has become one of the largest capital-allocation cycles in modern economic history.

Capital is pouring into data centers, chip fabrication plants, cloud infrastructure, power generation, grid upgrades, energy storage, and cooling systems. Governments call AI a strategic priority. Technology giants call it a competitive necessity. Investors call it a once-in-a-generation opportunity. The logic is simple: if AI transforms business processes and creates new industries, today’s infrastructure will earn handsome returns tomorrow.

But a technology can transform an economy and still disappoint many of the investors who financed its early buildout. The central question is not whether AI will change the world; it almost certainly will. It is whether the revenues, productivity gains, and cash flows AI generates will justify the scale of money being spent, and whether they will arrive on time.

AI has become a macro story

Major technologies have always demanded heavy infrastructure spending long before the benefits showed up. Railroads, electrification, and the internet all reshaped economies. Each was also accompanied by exuberance, misallocated capital, and overinvestment. The internet changed global commerce, yet countless dot-com companies vanished because expectations outran economic reality.

Today’s cycle rhymes with that history, with one important difference. AI is not just software in the cloud. It depends on high-performance chips, hyperscale data centers, reliable electricity, fast connectivity, advanced cooling, and constant hardware refreshes. That makes it an industrial-scale investment theme, and capital-intensive stories are shaped not only by innovation but also by financing conditions, utilization rates, and return on invested capital.

The scale is extraordinary. Technology companies are spending hundreds of billions of dollars on AI capabilities. Utilities are planning capacity expansions to meet rising electricity demand. Chipmakers are racing to add production. Institutional investors are deploying record sums into digital infrastructure.

The effects reach well beyond tech. Engineering firms are winning construction contracts, energy developers are seeing demand for new generation, equipment makers are expanding, and banks are financing ever-larger projects. In that sense, AI has become a genuine growth engine.

But spending is not the same as profitability. Investors often confuse capital deployment with value creation. Building infrastructure generates economic activity today; earning an acceptable return on it is a separate challenge entirely.

The capital intensity problem

Every investment cycle eventually faces four questions: How much capital is required? Who provides it? What returns will it earn? And when will those returns arrive?

For AI, the answers are demanding. Data centers require enormous upfront investment and large operating budgets. High-performance hardware consumes vast amounts of electricity, needs sophisticated cooling, and can become obsolete within a few years. The initial outlay is only the beginning: companies must keep upgrading equipment, replacing aging chips, adding capacity, and running specialized operations. Financing costs, depreciation, utilization, and customer demand all become critical variables.

Governments worldwide are carrying elevated debt and facing fiscal pressure. There is no certainty that AI investment will push interest rates higher or crowd out other spending, but the interplay between public borrowing, private investment demand, and infrastructure constraints deserves attention. If the cost of capital stays structurally higher than investors expect, many AI valuations will face tougher scrutiny.

This matters most for companies whose market values rest on earnings expected many years out. When expectations are stretched, small changes in discount rates, growth assumptions, or margins can move valuations dramatically.

The gap between innovation and monetization

The biggest risk to the AI thesis may not be technological failure. It may be a timing mismatch between spending and returns. Markets often assume breakthroughs translate automatically into economic success. They rarely do.

Organizations typically need years to redesign workflows, integrate new systems, retrain employees, address cybersecurity risks, modernize legacy infrastructure, and adapt operating models. Many firms will adopt AI tools quickly. Fewer will transform their processes. Fewer still will achieve measurable economic benefits at scale.

That is the monetization challenge. Businesses may use AI extensively without generating enough new revenue to support today’s infrastructure spending. Consumers may enjoy AI-powered products while intense competition among producers holds profits down. We have seen this before: industries create enormous value for society yet earn only modest returns for investors. The gap between economic value creation and shareholder value creation is routinely underestimated.

Capital markets are often viewed as platforms where stocks and bonds are traded. In reality, they are among the most important institutions in a modern economy. They channel savings into productive investment, finance innovation, support entrepreneurship, and strengthen long-term economic growth. By connecting investors with businesses, entrepreneurs, and governments, capital markets transform financial resources into economic activity, job creation, and higher living standards.

In an increasingly competitive global economy, the quality of a country’s capital markets can influence its ability to attract investment, develop new industries, and withstand economic shocks. Countries with deep, transparent, and trusted capital markets are often better positioned to finance growth and compete in a world shaped by technological change, economic uncertainty, and geopolitical competition.

The role of capital markets in development is not new. Throughout history, prosperous societies have developed mechanisms that connected savings with productive enterprise. Long before modern stock exchanges emerged, merchants and investors pooled capital, shared risk, and financed trade.

In the Islamic world, the mudaraba partnership enabled investors and entrepreneurs to share profits and losses, supporting commerce across vast regions. Similarly, the Ottoman Grand Bazaar functioned not only as a marketplace but also as a commercial and financial hub connecting merchants, financiers, and traders. Comparable institutions emerged elsewhere. The Amsterdam Stock Exchange helped finance maritime trade during the Dutch Golden Age, while London’s financial markets supported Britain’s rise as a global commercial and industrial power.

Modern capital markets are the institutional evolution of these earlier arrangements. While financial instruments have become more sophisticated, the underlying objective remains unchanged: directing savings toward productive economic activity.

Mobilizing savings for growth

For many developing economies, the challenge is not necessarily a shortage of savings but their inefficient allocation. Large portions of household wealth often remain concentrated in bank deposits, gold, foreign currencies, or real estate. While these assets may preserve value, they contribute relatively little to innovation, productivity, or job creation.

Capital markets help address this problem by channeling savings into businesses, infrastructure, manufacturing, research, and entrepreneurship. By mobilizing domestic resources, they reduce dependence on foreign borrowing and support sustainable economic growth.

The experience of East Asia illustrates this relationship. South Korea and Taiwan successfully directed domestic savings into growth-oriented industries, supporting industrialization, technological advancement, and export competitiveness. Their success demonstrates that development requires institutions capable of allocating capital efficiently.

Capital markets provide financing options beyond traditional bank lending. Banks remain essential to every financial system, but they are often reluctant to finance high-risk ventures, early-stage companies, or projects with long development horizons. Such activities require investors willing to accept uncertainty in exchange for future growth.

Through initial public offerings (IPOs), venture capital, private equity, corporate bonds, sukuk, and angel investment networks, capital markets help entrepreneurs transform ideas into viable businesses and allow successful firms to expand.

The U.S. provides one of the clearest examples. Silicon Valley’s success rests not only on technological expertise and entrepreneurial culture but also on a financing ecosystem capable of supporting firms through every stage of development. Venture capital, institutional investors, and public markets have enabled many technology companies to evolve from start-ups into global enterprises.

This lesson has become increasingly relevant as countries compete in artificial intelligence, biotechnology, advanced manufacturing, clean energy, and digital infrastructure. Access to long-term investment capital is now a strategic advantage. Without effective capital markets, promising innovations often struggle to move from research to commercial scale, limiting productivity growth and competitiveness.

Trust as the foundation of capital markets

Financing alone does not create successful capital markets. Trust does.

Investors commit capital only when they believe markets are fair, information is reliable, and rules are enforced consistently. Trust therefore forms the foundation of every successful market.

Building trust requires strong institutions. Regulators must act independently, disclosure standards must provide accurate and timely information, property rights must be protected, and authorities must deter insider trading, market manipulation, and fraud. Investors are willing to accept business risk, but they are far less willing to tolerate uncertainty stemming from weak institutions or unequal treatment.

Transparency and accountability reinforce this trust. Publicly listed companies usually face stricter disclosure and governance standards than private firms. Better information reduces uncertainty, lowers perceived risk, and often reduces the cost of capital. It also encourages broader participation by households and institutional investors, increasing market depth and liquidity.

The world’s leading financial centers have been built on these foundations. New York and London established their reputations through strong legal frameworks, investor protections, and credible enforcement. Singapore provides another important example. Despite its relatively small domestic economy, it became one of the world’s leading financial centers through strong institutions, regulatory quality, and a sustained commitment to transparency.

The lesson is simple: capital follows trust.

Strong institutions are often a prerequisite for the development of capital markets. At the same time, the process of developing capital markets can encourage improvements in regulation, governance, disclosure, and investor protection. As a result, financial market development often becomes a catalyst for broader economic modernization.

Supporting development and public investment

Governments are among the largest beneficiaries of mature capital markets. Economic development requires substantial investment in transportation, utilities, telecommunications, housing, water systems, and environmental sustainability. Financing these priorities solely through tax revenues, bank lending, or external borrowing is often insufficient.

Deep bond markets provide an additional source of financing. Sovereign bonds, municipal bonds, project bonds, green bonds, and sustainability-linked instruments allow governments and public institutions to access domestic and international capital. Increasingly, these instruments finance renewable energy projects, climate-resilience initiatives, and sustainable infrastructure.

Malaysia offers a noteworthy example within Islamic finance. The country has developed one of the world’s most sophisticated sukuk markets, attracting both domestic and international investors. By combining modern financial infrastructure with Shariah-compliant principles, Malaysia demonstrates that financial modernization can coexist with cultural and religious traditions.

Regional cooperation can also strengthen capital markets. The BRVM in West Africa, one of the world’s few fully integrated regional stock exchanges, serves multiple countries through a single marketplace. Similar initiatives in ASEAN and Latin America show how regional cooperation can deepen markets, broaden investor participation, and improve access to financing.

E

thiopian Prime Minister Abiy Ahmed has renewed his call for access to the Red Sea, intensifying a dispute with neighbouring countries as renewed fighting in northern Ethiopia raises concerns about wider regional instability.

Abiy made the demand on Monday as he was sworn in for another five-year term, insisting that Ethiopia, despite being landlocked, must secure an outlet to the sea.

Speaking to parliament, Abiy said his government would work to obtain a port on the Red Sea, describing maritime access as critical to Ethiopia’s future and “civilisation.”

“Based on the principle of give and take, we will work diligently to ensure that Ethiopia has an outlet to the sea,” Abiy said.

Ethiopia lost direct access to the Red Sea in 1993 when Eritrea, previously part of Ethiopia, became independent. Since then, Addis Ababa has depended on neighbouring countries and regional ports for much of its maritime trade.

The renewed demand comes at a particularly sensitive moment for the Horn of Africa. Ethiopia’s relations with several neighbouring countries have deteriorated in recent months, while fighting has again intensified in the northern Tigray region.

Addis Ababa has accused Eritrea, Egypt and Sudan of supporting opposition forces in Tigray. The renewed conflict has raised concerns that Ethiopia’s internal fighting could become entangled with longstanding regional rivalries.

Eritrea, meanwhile, has accused Ethiopia of seeking access to the Red Sea through Eritrean territory, highlighting the sensitivity surrounding Abiy’s maritime ambitions.

Neighbours reject exclusive Ethiopian claim to Red Sea

The dispute over maritime access has unfolded alongside a broader disagreement over who should determine the future of the Red Sea and how regional states should protect their interests.

Four of the five African countries bordering the Red Sea — Egypt, Eritrea, Sudan and Somalia — met on Sunday in New Alamein, Egypt, where their leaders called for greater cooperation on regional issues.

In a joint position, they said governance of the Red Sea was the exclusive responsibility of its coastal states. They also rejected actions that could affect Egypt and Sudan’s use of Nile waters.

The statement came against the backdrop of another long-running dispute involving Ethiopia’s Grand Ethiopian Renaissance Dam on the Nile. Egypt and Sudan have repeatedly raised concerns about the project and its potential effects on their water supplies.

Ethiopia’s Foreign Ministry responded on Monday by saying that discussions over the Red Sea should take into account what it described as the country’s “legitimate interests and enduring connection” to the body of water.

The statement underscored the gap between Addis Ababa’s position and that of its coastal neighbours. While Ethiopia argues that its economic and strategic interests require reliable access to the Red Sea, the coastal states maintain that they retain primary authority over the waters and their shores.

Somalia has taken a somewhat different position. Somali President Hassan Sheikh Mohamud, who attended the Egyptian summit, congratulated Abiy on his renewed mandate and expressed a desire to strengthen relations between the two countries.

Mohamud had previously told Al Jazeera that Somalia did not object to Ethiopia obtaining access to the Red Sea through Somali territory. However, he stressed that any such arrangement would have to be formally negotiated between the two countries.

A possible area for bilateral negotiations

His comments suggest that maritime access remains a possible area for bilateral negotiations, even as the broader regional dispute becomes increasingly sensitive.

The issue is unfolding as Ethiopia faces renewed conflict in Tigray. Ethiopian federal and allied forces have entered the regional capital, Mekelle, as fighting between government forces and opposition groups has escalated.

The conflict has added another layer of uncertainty to Ethiopia’s relations with its neighbours, particularly Eritrea, which shares a border with Tigray.

Abiy’s renewed push for Red Sea access therefore comes at a time when Ethiopia is seeking to address both its economic dependence on foreign ports and growing security challenges across the Horn of Africa.

Regional leaders have continued to call for dialogue and cooperation, while Addis Ababa insists that Ethiopia’s interests must be taken into account in discussions over the Red Sea.

The coming months could determine whether Ethiopia’s demand develops into negotiated port arrangements with neighboring coastal states or contributes to further tensions in an already volatile region.

(Source: Aljazeera English)

B

razil’s presidential election is heading to a second round after President Luiz Inacio Lula da Silva and right-wing Senator Flavio Bolsonaro emerged as the leading candidates in a closely watched and deeply polarized first-round vote.

Brazil’s electoral court confirmed that the two candidates will advance to the October 25 runoff after neither secured the majority required to win the presidency outright. With nearly 99 percent of votes counted, Bolsonaro had about 47 percent of valid votes, compared with 44.9 percent for Lula. The result sets up another major confrontation between the political forces associated with Lula and the Bolsonaro family.

Lula, 80, is seeking a fourth, non-consecutive presidential term after a political career spanning almost five decades. Flavio Bolsonaro, 45, is the eldest son of former President Jair Bolsonaro and is seeking to return his father’s right-wing political movement to power. Jair Bolsonaro is serving a 27-year prison sentence for plotting a coup after losing the 2022 election.

The election takes place as Brazilians confront concerns over crime and the cost of living, while relations between Brazil and the United States have become increasingly tense. The outcome is also being closely watched across Latin America, where a series of recent elections has strengthened right-wing political forces.

Bolsonaro outperforms polls as runoff battle begins

The first-round result was notable because it differed from expectations in several opinion polls. While most surveys had predicted a runoff, they generally placed Lula ahead of Bolsonaro in the first round.

Instead, Bolsonaro finished about two percentage points ahead of the incumbent president. The unexpected result has raised questions about why polling organizations underestimated his support and highlighted the strength of the left-wing electorate.

Bolsonaro said after the vote that the result demonstrated that Brazilians wanted change. Analysts cited by Reuters suggested that he may have benefited from protest votes from voters who preferred other candidates but regarded defeating Lula as their immediate priority.

Political analyst Rafael Favetti said the protest vote could help Bolsonaro in the runoff but might also limit his ability to expand his support because some voters who might otherwise have shifted to him later had already supported him in the first round.

Lula acknowledged that the first-round result had been unexpected. He said he had believed he could win outright but vowed to strengthen his campaign before the runoff, describing the next stage of the contest as “extra time.”

The runoff is expected to be closely contested. Voters who supported the other 10 candidates in the first round will now become crucial to both campaigns. Ronaldo Caiado and Renan Santos, who together won about 5.3 million votes, have previously said they would not endorse either candidate.

Right-wing gains extend beyond presidential race

Bolsonaro’s strong performance was part of a broader electoral advance for Brazil’s right. Right-wing parties, led by Bolsonaro’s Liberal Party, were performing strongly in both chambers of Congress, with the PL on track to become the largest force in the Chamber of Deputies while also gaining ground in the Senate.

Members of the Bolsonaro family also secured important victories. Michelle Bolsonaro, a former first lady and Flavio’s stepmother, won a Senate seat in the Federal District, while Carlos Bolsonaro, Flavio’s brother, was elected to the Senate in Santa Catarina.

The results indicate that the political movement built around Jair Bolsonaro remains a powerful electoral force despite his exclusion from the presidential race. Andre Pagliarini, a historian and international studies professor, said the performance of far-right legislative candidates suggested deeper popular support for the Bolsonaro political project than many observers had expected.

The congressional results could have significant consequences after the presidential vote. Conservative lawmakers already dominate both houses, and a stronger right-wing presence could make it more difficult for Lula to advance his legislative agenda if he wins another term.

For Bolsonaro, meanwhile, a presidential victory could provide greater political space to pursue his priorities, including his pledge to seek an amnesty for his father.

With three weeks remaining before the October 25 runoff, Brazil now faces another closely fought contest between Lula and the Bolsonaro political camp, with the balance of power in Congress adding another layer to an election that could shape the country’s political direction for years to come.

(Source: Aljazeera English)

T

he Trump administration has urged France and Germany to release emergency diesel reserves to help ease soaring global fuel prices, warning that Washington could impose a ban on US diesel exports if European countries fail to act, according to three people familiar with the discussions.

The pressure marks an escalation in Washington’s efforts to bring down record US diesel prices as President Donald Trump considers measures to increase domestic fuel supplies ahead of November’s midterm elections.

For European governments, however, releasing additional emergency stocks presents a difficult choice. The European Union must weigh the immediate need to reduce fuel prices against the possibility of a worsening supply crisis if the conflict involving Iran continues and global energy markets remain disrupted.

The European Commission’s energy taskforce, which includes the Commission and representatives of all 27 EU member states, is due to discuss the situation on Friday morning, a Commission spokesperson said.

EU officials said the Commission, Germany, France, Italy, Britain and Ireland had already held discussions on Thursday about the possible release of diesel reserves.

The International Energy Agency has not yet asked Germany to release its emergency stocks, Germany’s economy ministry said. It was not immediately clear when the IEA would next consider the issue.

The US administration has expressed particular frustration with France and Germany, which Washington believes have not fully implemented earlier commitments to release emergency oil and petroleum-product reserves.

“It is in Europe’s best interest to work with the United States as we pursue multiple pathways to boost the supply of refined products and lower costs for consumers,” a US official told Reuters.

Washington seeks more fuel as global supply tightens

One source familiar with the discussions said the United States had asked the European Union to release 120 million barrels of diesel over the next six months.

Europe has become increasingly dependent on US fuel supplies after banning Russian imports following Moscow’s invasion of Ukraine. The disruption caused by the US-Israeli war against Iran has further complicated supplies from the Middle East, increasing pressure on global refined-product markets.

US Energy Secretary Chris Wright said he was “highly confident” that Europe could help reduce fuel prices by drawing down its emergency diesel inventories.

“This is a time for a coordinated release of diesel stores as we go into harvest season and we go into winter heating oil season,” Wright told Fox News. He said additional diesel was available and suggested that coordinated action could produce positive results for consumers.

US Treasury Secretary Scott Bessent also called on US allies to fulfill commitments made under an agreement among International Energy Agency members in March. He said the United States had already released 172 million barrels of oil under the agreement.

“America is doing its part,” Bessent said on X, adding that Washington expected its allies to match their commitments with action.

The pressure on European reserves comes as several major fuel suppliers have taken measures that are tightening international markets.

Russia has extended its ban on diesel exports until the end of October, according to Reuters. The measure comes after Ukrainian attacks damaged several Russian refineries.

Chinese refiners have also suspended October fuel exports to strengthen domestic supplies, while PetroChina has cancelled cargoes, according to sources cited by Reuters.

The disruptions have added to concerns about the availability of diesel at a time when demand is expected to rise during the agricultural harvest and winter heating season.

Europe faces a difficult reserve decision

The European Union must balance the immediate economic pressure from high fuel prices against the strategic value of maintaining emergency stocks.

Releasing large volumes could increase supplies and potentially reduce prices, but governments may be reluctant to deplete reserves while uncertainty remains over the conflict involving Iran and the possibility of further disruptions to international energy markets.

Relations between Washington and European capitals have already been strained by disagreements over tariffs and defense spending, adding another layer of complexity to the discussions over fuel reserves.

France’s energy ministry declined to comment on the US request. An official at the Élysée Palace said Trump and French President Emmanuel Macron did not discuss the issue when they met on the sidelines of the UN General Assembly in New York the previous week.

The official said Macron would convene a video conference of G7 leaders to discuss rising fuel prices and the global availability of refined petroleum products. The meeting would also consider coordination on releasing strategic reserves in cooperation with the International Energy Agency.

The proposed G7 discussions reflect the broader international effort to manage a tightening fuel market as governments confront disruptions from several major producers.

For Washington, securing additional supplies could help ease pressure on US consumers before the November elections. For Europe, however, releasing substantial diesel reserves could reduce prices in the short term while leaving countries with smaller buffers against a further deterioration in global energy supplies.

The debate therefore places the United States and its European allies under pressure to coordinate their response to an increasingly strained global fuel market, even as they face different domestic priorities and concerns about future supply disruptions.

(Source: Reuters)

B

eef prices are rising sharply in China, cattle farmers in the United States are struggling with higher costs, and poultry producers in India are cutting production as pressures across the global meat industry intensify.

More than 90 percent of the world’s population consumes meat in some form, making developments in livestock and poultry production important for food prices and household diets worldwide. Rising input costs, drought, biological production cycles and trade restrictions are combining to put pressure on meat supplies.

At the center of the problem is a supply chain that depends on resources and time. Cattle require years to reach slaughter weight, while poultry depends heavily on feed made from globally traded grains and soybeans. Farmers also need adequate land, water and favorable weather conditions to maintain their animals.

When one part of the system is disrupted, the effects can spread throughout the wider food market.

Brazil, US and China see Cattle herds decline

Brazil, the United States and China are the world’s three largest beef producers, together accounting for more than half of global beef production. All three, however, are experiencing declines in their cattle populations.

According to a March estimate from the US Department of Agriculture, Brazil’s cattle herd is expected to total about 177.4 million animals in 2026, down nearly 8 percent from 192.5 million in 2024.

The United States is also dealing with historically low cattle numbers. The USDA counted 86.2 million cattle and calves on farms on January 1, 2026. The number of beef cows, which are essential for producing future calves, fell 1 percent from the previous year to 27.6 million. The 2025 calf crop also declined by 2 percent.

China’s cattle herd was estimated at 94 million in January 2026, down from 105 million two years earlier, a decline of about 14 percent.

The shrinking herds are contributing to lower beef production. The USDA forecasts that Brazil’s beef production will fall 2 percent this year, while exports are expected to decline 5 percent. US beef production is projected to fall 4 percent, while China’s total beef supply is expected to be 12 percent lower than in 2024.

China, the world’s largest beef consumer and importer, has already seen prices climb as domestic production declines and imported supplies remain constrained.

Drought, costs and biological limits

The factors behind shrinking herds differ between countries.

In Brazil, restrictions imposed by China and the European Union, two important export markets, have reduced incentives for producers, according to analysis by Augusto Neto of S&P Global.

Brazil is also experiencing what the USDA calls a cattle reversion cycle. Producers reduce slaughter rates and retain female cattle for breeding in an effort to rebuild their herds.

In the United States, drought has affected about 60 percent of cattle-rearing areas, according to S&P Global. Reduced grazing opportunities have contributed to higher feed costs, putting additional pressure on farmers.

The US meat industry is also heavily dependent on immigrant labor. Organizations representing cattle breeders in Texas, Oklahoma and Kansas recently said immigration enforcement raids were disrupting already strained operations.

High beef prices might normally encourage farmers to increase production, but cattle cannot be produced quickly in response to market signals. Kenneth Foster, a professor of agricultural economics at Purdue University, told Al Jazeera that it can take years for producers to expand their herds and for additional cattle to reach the market.

The fastest way to rebuild a herd is often to retain female cattle that could otherwise be sold and use them for breeding. But that requires producers to absorb the costs of keeping the animals while waiting for the next generation.

As a result, high prices can coexist with limited supply for an extended period.

A

ccording to Tim Marshall, geography is the most fundamental and immutable parameter determining the fate of nations. Mountains, rivers, deserts, and oceans are natural prisons that limit leaders’ options. The approach formulated by Robert D. Kaplan as “geography’s revenge” points to the same conclusion: No matter how advanced military technology becomes, physical barriers and natural resource constraints continue to define the limits of strategic planning.

The most striking geographical feature of East Asia is that, despite being home to a very large portion of the world’s population, it is extremely deficient in arable land, freshwater resources, and fossil fuel reserves. This scarcity of resources makes all major powers in the region critically dependent on maritime trade routes. As Tim Marshall emphasizes in his analyses, just as Western Europe’s disconnected rivers and rugged mountainous terrain historically led to the emergence of numerous fragmented states, East Asia’s geography is a combination of vast landmasses, which are extremely difficult to unify, and deep oceanic rifts. This situation not only hinders regional integration but also forces states to operate within security dilemmas and maintain consistently high levels of military spending. One of the actors most deeply affected by this general geographic constraint in East Asia is the People’s Republic of China.

Geopolitical constraints for China

Despite its continental-scale land area and status as the world’s second-largest economy, China faces significant challenges in overcoming the geographical constraints imposed upon it. China’s eastern borders are encircled by a chain of islands, referred to in geopolitical literature as the “First Island Chain”, largely controlled by U.S. allies such as Japan, Taiwan, and the Philippines. This geographical barrier prevents the People’s Liberation Army Navy (PLAN) from freely accessing the open oceans. Taiwan, situated at the center of this island chain, acts as a fortress blocking China’s access to the depths of the Pacific. Although the Chinese navy is striving to become a modern naval power with three aircraft carriers, its warships must pass through narrow straits such as Miyako, Luzon, or Tsushima during both peacetime and times of crisis. These straits can easily be blocked by enemy submarines and coastal defense systems.

The most concrete and dangerous manifestation of this geographical constraint is the “Malacca Dilemma,” which directly threatens China’s energy security. China imports approximately 70 percent of the crude oil it consumes, and more than 80 percent of these imports reach the country directly through the Strait of Malacca. Located between Sumatra and the Malay Peninsula, the Strait of Malacca is one of the most critical chokepoints in global trade due to its shallow waters (average depth of 25–27 meters, dropping to as low as 23 meters in some areas) and its narrowest point, where the strait narrows to 2.7 kilometers in the Phillip Channel region. In the event of a conflict, a blockade of this strait by the U.S. Navy would effectively sever the lifelines of the Chinese economy. To overcome this vulnerability, the Beijing administration has embarked on infrastructure projects worth billions of dollars, despite their limited efficiency and impact. Some of these projects include:

• China-Pakistan Economic Corridor: The road and rail lines aimed at connecting the Port of Gwadar to Xinjiang must pass through the Baluchistan area with high security risks, and cross the Karakoram Mountains, one of the world’s most rugged mountain ranges. This situation keeps the project’s transport capacity at a level that is incomparably lower than that of maritime routes.
• Myanmar Pipelines: While the oil and natural gas pipelines extending from the port of Kyaukpyu to Yunnan Province are operational, the oil pipeline’s capacity of 440,000 barrels per day can meet only a very small fraction of China’s massive daily energy needs.
• Alternative Maritime Routes: Although deeper passages such as the Lombok and Sunda Straits could be used, these routes significantly increase shipping costs by extending the voyage distance. The “Northern Sea Route” in the Arctic, meanwhile, is covered in ice for most of the year and is under Russian control. The fact that it is under Russian control creates yet another form of dependency or constraint.

However, rather than accepting these geographical constraints as inevitable, the Beijing administration is pursuing a multi-layered and innovative strategy to overcome them. The most critical pillar of this strategy is based on the logic of transforming geographical dependency itself into a source of strength. The massive Belt and Road Initiative should be viewed not merely as an infrastructure push, but as a strategy to ensure energy and trade security by making countries along land and sea routes economically dependent on China. In parallel, China has risen to become the world’s largest producer of electric vehicles, batteries, and renewable energy technologies to mitigate the strategic vulnerability created by its dependence on fossil fuels. Perhaps most importantly, another way to overcome geographic limitations is to shift competition beyond existing geographical boundaries. With this vision, China is making major investments in new arenas of competition, such as cyberspace and outer space; by developing the capacity to compete with the U.S. in these domains, it aims to render the constraints of traditional geopolitics obsolete.

Tim Marshall argues that leaders come and go, but geography is permanent. Unlike the U.S., which is surrounded by weak neighbors, China shares land borders with 14 countries. No comparable rival to the U.S. possesses such geographical proximity to it. In East Asia, three nuclear powers (China, Russia, North Korea) and two technological powers (Japan, South Korea) live within each other’s artillery range. This proximity creates a security dilemma in which the strengthening of one state’s power, such as China building up its navy, directly threatens the survival of its neighbors (Japan, South Korea) and triggers counterbalancing alliances (AUKUS, the Quadrilateral Security Dialogue, and the U.S.-South Korea-Japan trilateral cooperation).

China’s land borders also present another geopolitical dilemma. Maintaining control over border regions historically inhabited by non-Han ethnic groups, such as Xinjiang and Tibet, is a vital national security priority for China. However, maintaining control over these regions forces China to spend more annually on internal security mechanisms and social control technologies than its official defense budget (which was $215 billion in 2016). The border with India is bisected by the Himalayas, the world’s highest mountain range. While this prevents the two nuclear powers from projecting large military forces against one another, it keeps the possibility of a potential security dilemma alive.

In terms of internal vulnerabilities, food and water insecurity represent China’s greatest Achilles’ heel. Although China must feed approximately 20 percent of the world’s population, it possesses less than 10 percent of the world’s arable farmland and only 6 percent of its freshwater resources. The famine that occurred between 1958 and 1961, which claimed the lives of 30 to 40 million people, has made food security a red line in the minds of China’s leadership. As a result of urbanization and industrialization, China lost more than 12 million hectares of prime agricultural land between 2009 and 2021. To boost production, the government has relied heavily on pesticides and chemical fertilizers (accounting for 30 percent of the world’s fertilizer supply), which has led to soil degradation and the contamination of irrigation water with heavy metals such as cadmium.

The geographic distribution of water resources is also severely unbalanced. The northern regions, which account for 56 percent of grain production, have access to only 16.5 percent of the nation’s water resources. This situation has led to desertification, land subsidence, and a decline in agricultural productivity in the North China Plain due to excessive groundwater extraction. To meet its growing protein needs, China has become dependent on imports of feed grains and edible oils; indeed, in 2021, the country’s reliance on imports for liquid oils reached 70 percent.

China’s demographic crisis

China’s demographic profile, however, reveals another pressing constraint. Driven by the strict “one-child policy” enforced for decades and the effects of rapid urbanization, China’s population officially began to decline in 2022. According to the United Nations, China’s population will decline from its peak of 1.42 billion in 2025 to 1.31 billion by 2050 and will fall below 800 million by the end of the century.

The main issue here is not so much the decline in population as the radical shift in the age structure. China faces the risk of becoming the first major economy to “age before it gets rich.” While Japan’s per capita GDP was at developed-country levels when it faced its demographic crisis, China has been caught in this process before even surpassing the middle-income level. China’s working-age population (ages 15–64) peaked between 2013 and 2015 and has been steadily declining ever since. The old-age dependency ratio, which stood at 11.9 percent in 2010, rose to 21.9 percent in 2022 and is projected to reach 51 percent by 2050.

This means that in the future, there may not even be two working-age people to support each elderly citizen. This shift will lead to a structural collapse in demand in the real estate sector, a decline in savings rates, and the bankruptcy of pension funds. The fact that China’s population aged 80 and older is projected to reach 126 million by 2050 has the potential to trigger major humanitarian and economic crises in rural areas where the social safety net is inadequate.

(Originally published in Turkish by Kriter)

C

hinese President Xi Jinping visited Egypt on September 1, marking the first such visit in a decade. Taking place on the 70th anniversary of the establishment of diplomatic relations between the two countries in 1956, Xi’s visit carried symbolic significance and served as a key indicator of the growing momentum in relations between Beijing and Cairo in recent years. The statements made by the leaders of both countries regarding the visit, in which they emphasized the importance they attach to bilateral relations, further underscore this trend.

Another notable aspect was that both leaders highlighted the broader regional implications of these bilateral ties. In this context, Chinese President Xi, highlighting Egypt’s dual Arab and African identity, emphasized the need to strengthen cooperation by noting that Cairo plays “an important role in promoting the collective cooperation between China and Arab states as well as between China and African countries.” Meanwhile, Egyptian President Abdulfettah el-Sisi similarly highlighted that his country was the first Arab and African state to recognize China, emphasizing that Cairo is a key actor in Beijing’s efforts to develop relations with both Arab and African states.

It can be said that China-Egypt relations, which had limited opportunities for development in the 20th century, began to develop rapidly from the beginning of the 21st century, as Beijing’s relations with Africa gained momentum. The elevation of the relationship to the level of a comprehensive strategic partnership during President Sisi’s official visit to China in 2014 marked a significant step.

Economy is the key word

As is the case with China’s relations with many other countries, economic ties constitute the most concrete and significant aspect of the relations that have developed during this period. China’s annual trade volume with Egypt, which stood at approximately $0.9 billion in 2000, reached approximately $20.8 billion by 2025. Another key indicator of these economic ties is China’s investments in Egypt. Beijing’s investments in Egypt have exceeded $10 billion, with investments in the industrial sector being particularly noteworthy.

The Suez Economic and Trade Cooperation Zone project, launched in 2008 to encourage China’s industrial investments in Egypt, is one of the most significant steps taken in this direction. As of 2025, with over $3.8 billion in investments made in the zone, nearly 200 companies are operating there, providing employment for approximately 10,000 people. China has also provided $7.7 billion in loans to Egypt between 2000 and 2024.

In contrast to economic relations, the security dimension of relations between the two countries has been an area with limited scope for development until recently. However, it is possible to say that significant activity has taken place in this area, particularly in 2025. In this context, claims that emerged during the year, that Egypt procured the HQ-9B air defense system from China and signed a deal worth approximately $400 million for the procurement of 10 WJ-700 UAVs, represent significant developments in arms trade between the two countries. The signing of a memorandum of understanding between Egypt and China’s North Industries Corporation for joint UAV production during this period was a step demonstrating the two countries’ intention to develop defense industry cooperation.

Eagles of Civilization exercises

One of the most important steps taken to strengthen military relations between Beijing and Cairo was the “Eagles of Civilization 2025” exercise. Held in Egypt, this large-scale exercise, the first joint air exercise between the two countries, also holds symbolic significance as it represents one of China’s most important military activities on the African continent. The second iteration of the exercise, “Eagles of Civilization 2026,” was conducted immediately prior to Xi’s visit.

China-Egypt cooperation, which is generally built on a foundation of strong economic ties, is evolving into a strategic partnership that increasingly encompasses the security dimension, as intended by both sides. However, it is fair to say that sustaining the momentum achieved in these relations will become increasingly difficult. The primary reason for this is the concerns that the deepening of Beijing-Cairo relations, particularly in the security sphere, will raise on the U.S. side. A key reason for Washington’s concerns is that, as part of its global competition with China, Beijing’s development of security ties with Egypt could allow it to gain military influence in a strategically important region.

Another major source of concern for the U.S. relates to Israeli interests. Egypt’s efforts to reduce its dependence on the U.S. in this area by developing military ties with China, and to enhance its military capabilities independently of the U.S., will be viewed as a threat by Israel. Driven by similar concerns, Washington intervened in the military relations Egypt developed with Russia in the second half of the 2010s, as well as in significant arms procurements, by applying pressure through the threat of sanctions against Cairo. The trajectory of China-Egypt security relations also holds the potential to trigger similar interventions.

(Originally published in Turkish by the Middle East Africa website)

C

hinese President Xi Jinping arrived in the United States for talks with President Donald Trump on Wednesday, as the war involving Iran has reshaped global energy markets and strengthened Beijing’s position as an increasingly influential player in the international energy system.

Trump is expected to press Xi over China’s energy relationship with Iran during the meeting in Washington. However, analysts and energy executives cited in the report see limited incentives for Beijing to change course, arguing that the conflict has in several ways strengthened China’s economic and strategic leverage.

The war has pushed global energy and commodity prices higher, with oil trading at around $100 a barrel on Tuesday. At the same time, China has expanded exports of clean-energy technologies to countries facing energy insecurity and has relied on its substantial crude oil reserves to cushion the effects of market disruptions.

Erica Downs, a former CIA energy analyst and current senior research scholar at Columbia University’s Center on Global Energy Policy, described China as a major beneficiary of the crisis. She said Beijing had managed the disruption relatively well and was unlikely to feel significant pressure to respond to US requests.

The developments come as Trump’s administration seeks to persuade China to reduce its energy ties with Iran and Russia while increasing purchases of American oil and natural gas.

Trump seeks to pressure Beijing over Iran and energy

A senior White House official said the administration would tell Xi that continuing to do business with Iran was unacceptable and that there would be consequences.

The issue is particularly significant because China has been a major buyer of Iranian and Venezuelan crude. Trump has taken measures that have made it more difficult and expensive for Beijing to obtain oil from those sources, while also suggesting that the United States could take control of Venezuelan oil.

Trump told world leaders at the United Nations on Tuesday that the United States now had a primary claim to Venezuela’s oil, adding: “To the victor belong the spoils.”

At the same time, Washington hopes to encourage Beijing to rely less heavily on Russia for oil and gas and return to the US energy market.

China has sharply reduced direct purchases of US natural gas since Trump imposed tariffs on Chinese imports last year. It also stopped buying US crude oil, although Chinese purchases of fuel from US refiners have increased in recent months.

The Trump administration had previously argued that tariffs on Chinese goods could encourage Beijing to loosen its control over critical minerals and persuade Chinese companies to purchase more American energy.

So far, however, those efforts have produced limited results. An LNG industry executive cited in the report said there was little expectation that the Xi-Trump talks would generate a major breakthrough.

The meeting is also taking place against the backdrop of a war that has absorbed much of the White House’s attention. Philip Luck, an international business analyst at the Center for Strategic and International Studies and a former State Department official, said the administration appeared to have had limited time to prepare for the summit because of the ongoing crisis.

Despite the geopolitical importance of the meeting, energy executives and analysts interviewed for the report did not expect major substantive developments.

China expands its role as an energy superpower

The conflict has nevertheless highlighted the scale of China’s influence over global energy markets.

China is the world’s largest oil importer and has used its purchasing power to build substantial crude reserves. It has also become a major regional supplier of petroleum products, meaning changes in Chinese exports or domestic demand can influence energy markets well beyond its borders.

The war has also accelerated China’s role in clean-energy markets. Chinese companies are exporting solar panels and electric vehicles to countries seeking alternatives to vulnerable supplies of Middle Eastern oil and gas.

Experts cited in the report said this combination of conventional energy reserves, petroleum exports and clean-energy manufacturing is giving Beijing new forms of leverage in the global energy economy.

Downs said the perception in China is that energy security is increasingly shifting away from control over physical resources such as oil and coal toward control over energy technologies. China’s dominant position in the manufacturing of many clean-energy products puts it in a strong position to meet its own needs while supplying other countries.

Ethan Zindler, head of country and policy research at BloombergNEF and a former US Treasury Department official, said the war was boosting Chinese clean-energy exports into developing markets.

In regions such as sub-Saharan Africa, where many countries are still working to expand electricity access, Chinese solar technology can provide an immediate alternative to dependence on imported fossil fuels.

The developments could therefore have consequences extending well beyond the immediate US-China dispute. As countries seek greater energy security following disruptions in global oil and gas supplies, China is increasingly positioned to provide both energy products and the technologies needed for electrification.

For Washington, that presents a difficult backdrop to the Xi-Trump meeting. The United States is seeking to use trade and energy policy to influence Beijing’s relationship with Iran, Russia and global commodity markets. Yet the Iran war has simultaneously strengthened China’s position in areas ranging from oil reserves and petroleum products to solar panels and electric vehicles.

The result is a US-China meeting taking place at a moment when the global energy landscape is changing rapidly, with China gaining influence through both traditional energy markets and the expanding clean-energy economy.

(Source: Politico)

P

rofessor Timothy Edmunds has previously undertaken the role as an advisor to government departments such as the Ministry of Transport and Royal Navy and continues his career as a professor in International Security and the Head of Sociology, Politics and International Studies (SPAIS) at the University of Bristol.

Professor Edmunds continues to explore the new trends of maritime security. Following his book, Understanding Maritime Security, he has mentioned that there would be a fifth wave in maritime security.

Currently in the process of writing the second edition, he gives an insight into which trends “will determine what the priorities are going to be over the next 10 or 20 years” in an exclusive interview.

Geopolitics

Maritime security is increasingly shifting from strengthening law enforcement capabilities and coordination to militarized competition and interaction of policing in a geopolitical way. Professor Edmunds states that this was a “huge shift” from when he started writing about maritime security “10 years ago”.

He highlights how the development of maritime bases and deployment in regions such as Gulf, has the potential to both increase policing within the region by building maritime capabilities “for counter piracy operations, but also to assert their geopolitical presence in East Africa” and the Western  Indian Ocean.

As exemplified with China’s “base in Djibouti” and states such as France, the U.S, UAE and Saudia Arabia establishing or in the process of establishing naval bases and outposts in the region.

Edmunds mentions that this is particularly apparent in the way that states are contesting chokepoints and chokepoints becoming increasingly politicized in ways which were not before. The militarization of maritime security which is leading to an increase in naval concerns rather than a policing concern. Navies ultimately became the “front foremost in maritime security issues”. Maritime security is no longer a conversation of piracy as much as it was before, but about the wider geopolitical interactions.

UNCLOS

Although the United Nations Convention on the Law of the Sea (UNCLOS) has become a debated topic regarding its relevance of 21st century issues and calls to be revisited, Professor Edmunds mentioned that it in most “circumstances is the foundation of ocean governance” and believes it is still “one of the most impressive international treaties we have”.

UNCLOS has become a widely adopted legislation among ocean governance. However, UNCLOS has shown to have gaps since the topics of importance of the 21st century were not on the political agenda in the year when it was negotiated. Including some transnational organized crimes at sea, the protection of subsea maritime infrastructure, and the impact and implications of climate change.

“Following the finalization of UNLCLOS, the maritime order was seen as largely settled, and that has changed.”

Not only because it took 30 years to negotiate, but Professor Edmunds also mentioned how difficult any changes and negotiations are likely to be possible to revise UNCLOS given new geopolitical trends and interests. Iran blocking the Strait of Hormoz and charging ship passages became a direct “attack on one of the fundamental principles of UNCLOS” in relation to the freedom of passage.

While soft challenges from states like China, following recent island building in the South China Sea, contest “some of the underlying assumptions of UNCLOS or reinterpreting in unconventional or norm breaking ways”. These examples show how easy it can be for states to use “legal challenges or loopholes” in a “coercive manner to pursue strategic goals on the sea”.

Very few states have challenged the fundamentals” of UNCLOS stated Professor Edmunds, but that there will “always be areas of contestation, such as how you calculate the countries maritime boundaries”.

Climate change and the Blue Acceleration

The Blue acceleration is a term coined by Swedish researcher to describe the rapid expansion of human use of the sea in recent decades. In the last 30 – 35 years, Professor Edmunds stated that this enormous acceleration in ship containers, fishing, infrastructure, cruise ships and wind farming has become a “cause and consequence of globalization”.

With nearly 80-90 per cent of goods traded by the sea, this acceleration has also led to an increase in the size of transportation. Bigger ships to transport good, oils gas and other commodities. As well as larger and more capable fishing vessels. This “economic acceleration of activity caused by the blue acceleration has brought economic benefits to countries” stated Dr Edmunds and has been “critical” to elevating “poverty in the global South” and elsewhere.

However, Professor Edmunds mentioned that “the more the sea is being used, the potential of more environmental consequences that comes with it. The more fishing in coastal regions which leads to fewer fishes in the region, exacerbating the marine biodiversity crisis.”

The “number of vessels on sea increases greenhouse gases, as individual entities the container ships being hugely polluting by burning dirty fuel oil”.

Now with the development of technology, Professor Edmunds highlights new talks regarding technologies developed to exploit deep sea minerals.

“Deep sea mineral exploitation” has the potential to “create worrying and unknown environmental consequences” and the development of technologies that allow for new exploitations at the sea “creates new kinds of environmental risks”.

This economic benefit of the blue acceleration is felt in “very real ways in all parts of the world”. But Professor Edmunds also stated the environmental consequences of those developments which are unknown.

Climate change and increased fishing impacts fish stocks, fish migration patterns, where fish are moving to different areas and thus potentially creating geopolitical tensions between states.

“Climate change is one of the animating meta themes of maritime security going forward and how it develops. Partly because of the impact it will have on maritime activity around fishing, but also the knock-on effects it will have on coastal communities. If fish stock dries up, there is evidence that when areas are overfished, fishers will look towards alternatives which may be criminal alternatives. Smuggling or piracy being some of these alternatives sought out.”

As well as the drives of piracy being poverty and exclusion in coastal areas particularly amongst former fishing communities, sea level rise threatens port infrastructures, such as “military port infrastructures” mentioned Professor Edmunds.

“Climate change presents an existential threat to states” stated Edmunds, while referencing Tuvalu, which has become the first digital nation following the threats posed by the sea level rise.

T

he U.S. Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, marking its first rate increase since 2023 and lifting the federal funds target range to 3.75%-4%, as policymakers continued to grapple with inflation that remains above the central bank’s 2% target.

The decision by the Federal Open Market Committee (FOMC) was unanimous and was broadly in line with market expectations. The Fed said the move was intended to support its dual mandate of achieving maximum employment and stable prices.

In its policy statement, the central bank said economic activity had continued to expand at a solid pace, while domestic spending remained resilient. It added that uncertainty remained elevated, partly because of geopolitical developments.

The Fed also pointed to strong productivity growth and solid capital investment. Employment gains were described as broadly matching growth in the labor force, while the unemployment rate had changed little.

However, inflation remained elevated, prompting the central bank to maintain a focus on bringing price pressures back toward its 2% target.

“Today’s policy action will support a more timely return to the Committee’s 2 percent objective,” the Fed said, adding that it would work to ensure price stability.

The rate increase marks a significant shift from the Fed’s policy course over the previous year. The central bank had cut interest rates by a combined 75 basis points in September, October and December of the previous year before leaving rates unchanged during its first five meetings of 2026.

Recent economic data showing continued strength in the labor market alongside inflation above the Fed’s target had increased expectations for a rate hike at the September meeting. Financial markets had largely priced in a 25-basis-point increase ahead of the decision.

The Fed’s last rate increase came in July 2023, when it raised the federal funds target range by 25 basis points to 5.25%-5.50% as it sought to combat persistent inflation.

Fed signals another rate increase in 2026

Alongside its policy decision, the Fed released updated economic projections that indicated another rate increase could take place before the end of 2026.

The central bank raised its median year-end federal funds rate projection to 4.1%, up from the 3.8% forecast issued in June. Its projection for the federal funds rate in 2027 was also raised to 4.1% from 3.6%, while the forecast for 2028 increased to 3.9% from 3.4%. The Fed projected a rate of 3.6% for 2029.

Its longer-run estimate for the federal funds rate was revised slightly upward to 3.2% from 3.1%.

The Fed’s so-called dot plot, which shows individual policymakers’ expectations for future interest rates, indicated that 16 of the 18 FOMC officials expected at least one additional rate increase this year.

The projections suggest that policymakers expect interest rates to remain relatively restrictive as they continue to address inflationary pressures.

The Fed also raised its inflation forecast for 2026. Its projection for headline inflation increased to 3.7% from 3.6%, while the forecast for 2027 remained at 2.3%. The central bank raised its 2028 inflation projection to 2.1% from 2%, and projected inflation at 2% in 2029.

Inflation projection

Core inflation, which excludes volatile food and energy prices, was also expected to remain higher than previously forecast. The Fed raised its 2026 core inflation projection to 3.4% from 3.3%, while maintaining its 2027 forecast at 2.5%. Its 2028 projection increased to 2.2% from 2.1%, with a 2% forecast for 2029.

Despite the continued inflation pressure, the central bank upgraded its expectations for economic growth.

The Fed raised its 2026 growth forecast to 2.3% from 2.2% and its 2027 projection to 2.4% from 2.3%. It left its 2028 forecast unchanged at 2.2% and projected growth of 2.1% in 2029.

The unemployment outlook also improved. The Fed lowered its unemployment rate forecast for 2026 and 2027 to 4.1% from 4.3%. Its projection for 2028 was reduced to 4.1% from 4.2%, while the forecast for 2029 was also set at 4.1%.

The combination of stronger growth and lower unemployment projections suggests that Fed officials expect the U.S. economy to remain resilient even as interest rates stay elevated.

The latest decision therefore leaves monetary policy at the center of the Fed’s effort to balance continued economic expansion, labor-market conditions and persistent inflation. The updated projections also indicate that policymakers expect the fight against inflation to continue beyond the September meeting, with most officials anticipating another rate increase before the end of the year.

(Source: Anadolu Agency)

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he six-month-old U.S. war against Iran has cost Washington about $38 billion so far, with the figure expected to increase by roughly $3 billion each month, according to an assessment by the Congressional Budget Office (CBO), adding to pressure on the Trump administration as it searches for a way to end the conflict and reopen the Strait of Hormuz.

The nonpartisan congressional budget office said its accounting covered costs through August 1 and estimated that the war could increase U.S. inflation by 0.5% during the first three months of 2027. The growing financial burden comes alongside mounting pressure on American military stockpiles and higher energy prices linked to the conflict.

The CBO’s assessment highlights the broader consequences of the war for U.S. military readiness and the federal budget. It said the majority of the costs resulted from the rapid drawdown of U.S. munitions, warning that replenishing depleted stockpiles could take as long as five years.

The report comes as Washington continues military operations against Iran while attempting to address disruptions around the Strait of Hormuz, a critical global energy route. The waterway previously carried roughly 20% of the world’s oil, and attacks and disruptions in the region have contributed to sharp increases in energy prices.

The latest CBO estimate is close to the $37.5 billion cost Defense Secretary Pete Hegseth reported during a Senate hearing on July 21. Hegseth has also called for nearly $90 billion in emergency funding to replenish U.S. weapons supplies.

Munitions shortages raise concerns over U.S. readiness

The CBO said shortages of critical munitions, including missile interceptors, could limit the Pentagon’s ability to respond if the United States becomes involved in another major conflict.

Among the scenarios cited was a potential future confrontation involving China and Taiwan. The assessment indicates that the continued use of U.S. weapons in the Iran conflict could have consequences extending beyond the Middle East by reducing supplies available for other military contingencies.

Reuters reported in August that the United States had used virtually all of its long-range precision missiles during the war. The CBO estimated that rebuilding those stockpiles could take several years.

The Department of Defense did not cooperate with congressional financial auditors, according to the CBO. Pentagon officials, however, rejected the assessment that the military was facing inadequate supplies.

White House spokeswoman Anna Kelly described President Donald Trump’s attacks on Iran as “decisive action” aimed at preventing Tehran from threatening U.S. personnel or interests. She said the military had more than enough munitions, ammunition and stockpiles to meet the president’s strategic objectives.

Pentagon spokesman Sean Parnell also disputed the findings on shortages, saying the department had everything necessary to conduct strikes when and where the president ordered them.

The CBO accounting also excludes some expenses that could push the eventual cost substantially higher. It did not include the costs of recent attacks on commercial vessels in the Strait of Hormuz or strikes on U.S. military installations in the region. Nor did it account for borrowing costs associated with financing the war, which could add tens of billions of dollars to the total.

The financial estimate comes amid a significant human toll. Eighteen U.S. service members have been killed in the conflict, according to the report.

Energy shock adds pressure to U.S. economy

Beyond military spending, the war has created economic consequences through disruptions to energy supplies and higher prices.

Attacks affecting the Strait of Hormuz and energy facilities in neighboring Gulf countries have sharply increased energy costs for consumers and producers. The resulting inflationary pressure is expected to continue affecting the U.S. economy, with the CBO projecting a 0.5% increase in inflation during the first three months of 2027.

The higher costs come at a time when the United States is already facing growing fiscal pressures. The country’s total public debt surpassed $40 trillion in August, adding another concern as Washington continues to finance the war and other government commitments.

The Pentagon’s inspector general separately reported that Iranian attacks had damaged or destroyed hundreds of buildings at U.S. military bases in the Middle East, along with fighter aircraft, refueling planes and drones. Its assessment put the cost of the war through June 19 at $33.4 billion, including about $184 million in damage to U.S. diplomatic facilities.

The scale of the current spending is also being viewed against previous U.S. wars. Trump has frequently compared the Iran conflict with the wars in Iraq and Afghanistan. The eight-year Iraq war cost about $2 trillion, while the two-decade conflict in Afghanistan cost an estimated $2.3 trillion, according to figures cited by Reuters.

For the Trump administration, the latest CBO assessment underscores the financial and military costs accumulating as the conflict continues. With expenses projected to rise by billions of dollars each month and weapons stockpiles requiring years to replenish, the war is creating pressures that extend beyond the immediate battlefield and into U.S. economic and defense planning.

(Source: Reuters)

U

S President Donald Trump has said the war with Iran will end “immediately after” November’s midterm elections, offering a new timeline for ending a conflict that has continued for months and contributed to a sharp rise in energy prices across the United States.

Trump made the remarks on Wednesday while speaking to reporters on the tarmac as he travelled to Texas for the Republican midterm convention. He also accused Iran’s leadership of deliberately escalating the conflict in an attempt to influence the US elections and damage Republican candidates.

“I think the war is going to end immediately after the election,” Trump said, arguing that Iranian leaders were increasingly desperate and seeking to affect the political outcome in November.

The president’s latest prediction represents another shift in his timeline for the conflict. The war has lasted significantly longer than Trump initially suggested, while Republican lawmakers and candidates have increasingly faced questions about the economic consequences of the fighting.

Trump claimed that Iran was attempting to influence American voters by prolonging the conflict and said Tehran wanted to see Republicans weakened after the election.

“They’re desperate to try and affect the election,” Trump said, arguing that Iran wanted Americans to elect what he described as a weaker group of lawmakers that would allow Tehran to continue pursuing its nuclear ambitions.

The comments come as the war has become an increasingly important political and economic issue in the United States. Rising fuel prices have added pressure on American households and intensified concerns among Republicans that the conflict could damage the party’s prospects in the midterms.

Rising energy prices put pressure on Republicans

The economic consequences of the war have become particularly visible through higher energy costs. Diesel fuel has risen to almost $6 per gallon on average, reaching a record high the previous week, while regular gasoline is averaging about $4.22 per gallon, up from $4.01 a month earlier.

Higher fuel prices have also affected the cost of everyday goods, including groceries, adding to broader inflation concerns and increasing frustration among voters.

Republicans have been concerned that the economic impact of the conflict could threaten their majorities in Congress. The party is seeking to maintain control of the House of Representatives and potentially the Senate in the November elections, making the trajectory of energy prices a significant political issue.

Trump sought to reassure voters by predicting that gasoline prices would fall sharply after the elections. He claimed that prices could drop below $2 per gallon once the midterms were over.

However, the continuing conflict has created uncertainty over how quickly energy markets could stabilize. The United States and Iran have intensified attacks in recent days, with the two sides trading strikes involving naval vessels and oil tankers.

The escalation has increased pressure on global energy markets and contributed to concerns about the wider economic consequences of continued hostilities.

Trump’s comments came against this backdrop, linking the conclusion of the war directly to the political calendar. His prediction that the conflict will end immediately after the midterms could place additional pressure on his administration and Republican candidates if fighting continues into or beyond November.

Trump rules out immediate negotiations with Iran

Alongside his prediction that the war would end after the elections, Trump said he was no longer actively seeking negotiations with Iran’s leadership.

The president said he had initially wanted to reach an agreement to end the fighting, but argued that the situation had changed significantly.

“Originally, I wanted to make a deal,” Trump said. He added that there was now very little of Iran left, in his assessment, and that his administration was therefore not actively pursuing negotiations.

Trump nevertheless acknowledged that negotiations could still take place under certain circumstances, saying that a diplomatic agreement remained possible even though it was not currently an objective of the administration.

The shift in Trump’s position comes as military confrontations between Washington and Tehran continue to intensify. The recent exchanges involving naval ships and oil tankers have raised the stakes of the conflict and increased concerns over further disruption to energy supplies.

Trump’s comments also reflect the increasingly political dimension of the war inside the United States. With the midterm elections approaching, both the conflict itself and its economic effects are likely to remain major issues for voters.

Republican candidates face the challenge of defending the administration’s handling of the war while responding to the impact of higher fuel and food prices. Democrats, meanwhile, could use the economic pressures associated with the conflict to argue that the administration’s policies are hurting American households.

Trump has framed the conflict as a struggle against Iran’s nuclear ambitions and accused Tehran of attempting to interfere in US politics. But his latest promise that the war will end immediately after the midterms leaves the timing of any potential ceasefire or settlement uncertain.

For now, the United States and Iran remain engaged in an escalating confrontation, while energy prices continue to weigh on American consumers. Trump’s latest deadline therefore places the November election at the center of both the political debate and his administration’s stated expectations for the war’s conclusion.

(Source: Politico)

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or centuries, Somalia and China have been connected through the Indian Ocean. Long before the establishment of the modern Somali state, commercial and cultural exchanges linked the Somali coast with China through maritime networks. The modern diplomatic relations were established in 1960 and have survived some of Somalia’s most turbulent political periods.

Yet the significance of the relationship today is not simply that it has survived for decades. It is that the architecture of Chinese engagement with Somalia appears to be changing. China is increasingly visible not only in government offices and diplomatic exchanges, but also in Somali classrooms, universities, investment forums, youth networks and spaces of knowledge production. In September 2024, the two countries elevated their relationship to a strategic partnership.

This development should not be interpreted simply as another example of China expanding its footprint in Africa. What is more interesting is the changing instruments through which Chinese influence is being constructed in Somalia. For years, external engagement with Somalia has largely been understood through security assistance, humanitarian intervention, development programs and political diplomacy.

Türkiye has developed a particularly visible role across security, education, infrastructure and diplomacy, while Western and Gulf actors maintain their own political, economic and security relationships. China is now becoming more prominent within this increasingly competitive external environment, but its approach appears to rely on a somewhat different combination of instruments including economic statecraft, education, people-to-people exchanges, diplomatic networks and knowledge production.

150 Somali students win Chinese scholarships

Considering education, in August 2026, more than 150 Somali students received full Chinese government scholarships, one of the largest recent cohorts, with students entering fields including medicine and engineering. The Chinese Embassy’s scholarship reception was not presented merely as an educational event. Ambassador Wang Yu encouraged the students to develop a new perception of China, build new friendships and contribute to China-Africa and China-Somalia exchange. This scholarship initiative coincides with a parallel trend of self-funded Somali students choosing to study in China recently.

The wording is revealing. Scholarships are usually understood as development assistance or educational opportunity. But international relations shows us that education can also become an instrument of soft power and long-term socialization. A student who spends several years in another country does not return with a degree alone. They return with language skills, professional networks, personal experiences, perceptions of the host country and, sometimes, an entirely different understanding of how a state and society function. China has already begun building upon this accumulated human capital. Its embassy has previously brought together Somali alumni of Chinese universities, explicitly linking their educational experiences with future China-Somalia cooperation.

This does not mean that scholarship recipients automatically become instruments of Chinese influence. Such an interpretation would underestimate their agency. The more important point is that education creates social relationships that can survive individual projects and political administrations. A road connects two places, but an educational network can connect two societies for decades.

China and the youth in Somalia

The same logic is increasingly visible in China’s engagement with Somali youth. In August, a nine-member Somali youth (TikTokers) delegation travelled to China through a cultural-exchange program facilitated by the Chinese Embassy. Participants visited Chinese cities and institutions and subsequently documented their experiences for Somali audiences.

This is particularly significant because Somalia’s public sphere has changed. Foreign policy narratives are no longer communicated exclusively through embassies, official statements or traditional media. They increasingly travel through TikTok, YouTube, Instagram and other digital platforms. When Somali young TikTokers visit China and communicate their experiences to Somali audiences in their own language and cultural context, the relationship is no longer being narrated solely by Chinese diplomats. t is being re-mediated by Somali actors for Somali audiences.

That is an important distinction in understanding contemporary soft power. Influence does not necessarily become stronger because the source speaks louder. It can become stronger when local actors become the intermediaries through which an external country’s image and experience are interpreted. At the same time, Chinese institutions have increasingly used African and Somali youth engagement as part of the broader 2026 China-Africa Year of People-to-People Exchanges. Somalia’s Ambassador to China, Hodan Osman Abdi, has herself emphasized the role of young people and language learning in sustaining China-Africa relations.

But China’s emerging strategy goes beyond people-to-people diplomacy. It is also becoming increasingly economic. In August, the Somalia-China Business Networking Forum brought together government officials, Somali and Chinese businesses, investors and chambers of commerce in Mogadishu. The discussions covered infrastructure, manufacturing, fisheries, agriculture, energy, transport and logistics, while the Somali government presented investment opportunities linked to its National Transformation Plan.

Zero-tariff policy

Beijing is simultaneously presenting its expanded zero-tariff policy toward African countries as an opportunity for greater African exports and has explicitly discussed the policy with Somali officials. Somalia’s ambassador to China, Hodan Osman Abdi, has also publicly highlighted the importance of using these opportunities to deepen economic cooperation.

This matters because Somalia has historically been approached primarily as a recipient of humanitarian assistance, security support and development aid. A relationship increasingly organized around investment, exports and productive sectors could create a different form of engagement in which Somalia participates more actively in the economic relationship. China’s broader zero-tariff policy toward African countries also creates opportunities for Somali exports, an issue that Somalia’s ambassador to China has publicly emphasized.

But perhaps the most overlooked dimension is knowledge. In April, Yangzhou University discussed supporting the development of a Center for Somali Studies following engagement with Somali National University. The initiative points toward a growing Chinese academic interest in Somali language, society and affairs.

This may appear less consequential than investment or infrastructure, but it represents another form of power which is the epistemic power. Who studies Somalia matters. Who produces knowledge about Somali society matters. Who teaches Somali language matters. And who trains future specialists capable of interpreting Somalia matters.

For decades, much of the internationally influential knowledge about Somalia has been produced through Western universities, think tanks and international institutions. The emergence of Somali-focused academic engagement in China suggests that Beijing is gradually developing its own knowledge infrastructure through which it can understand Somali society and cultivate people capable of sustaining the relationship. China is therefore not simply increasing its presence in Somalia. It appears increasingly interested in developing the human, social and intellectual networks through which its presence can endure.

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acific Island leaders have expressed concern over China’s recent intercontinental ballistic missile test in the Pacific, calling for greater transparency and advance notification of future missile launches, despite a formal dissent from Nauru.

The issue emerged as a major point of discussion at the annual Pacific Islands Forum, where leaders from the region debated security concerns while also facing pressure from Beijing over Taiwan’s participation in the summit.

Palau’s President Surangel Whipps Jr., who hosted the meeting, said China’s July missile test had passed over several Pacific island nations without sufficient warning. The launch was China’s first known ICBM test in the Pacific since September 2024.

At the conclusion of the summit, Whipps said Pacific leaders had called on all countries conducting ICBM tests to provide greater transparency and reassurance. He said they supported advance notification of missile tests at least 24 hours before launch, in line with international practice.

However, Whipps noted that Nauru had formally dissented from the position adopted by the majority of Pacific states.

Australian Energy Minister Chris Bowen, who attended the summit alongside Prime Minister Anthony Albanese, defended the decision to issue the statement despite the lack of unanimity. He said it was reasonable for most Pacific countries to express their concerns while allowing one or two states to hold a different position.

“Unanimity is not necessary” to express strong views on behalf of the majority of Pacific island states, Bowen said, according to ABC Radio.

The disagreement highlights the competing diplomatic positions within the Pacific, where governments maintain different relationships with China, Taiwan, Australia and other major powers.

Palau pushes back as China challenges Taiwan’s presence

Palau had pressed the 18-member Pacific Islands Forum to formally condemn China’s missile test, making the issue a prominent feature of the summit. The island nation is one of only three Pacific states that maintain official diplomatic relations with Taiwan.

Beijing responded sharply to Palau’s efforts, accusing the summit host of creating unnecessary “hype” around the missile test and warning that attempts to influence other Pacific nations were “malicious” and would fail.

China’s objections were not limited to the missile issue. The summit was also strained by Beijing’s opposition to Taiwan’s participation in the meeting.

China maintains that Taiwan is part of its territory and argues that the self-governed island does not qualify to attend the regional gathering. Taiwan rejects Beijing’s sovereignty claims and maintains its own democratic government.

Taiwan’s Foreign Minister Lin Chia-lung condemned what he described as China’s “wolf warrior” diplomacy at the summit. Lin also alleged that Chinese officials had engaged in espionage during the event, adding another layer of tension to an already contentious meeting.

Bowen similarly criticized Beijing’s approach, saying such diplomacy could undermine unity among Pacific countries. He described the Chinese approach as unpopular among Pacific governments and argued that it risked damaging regional cohesion.

The summit was further complicated by the absence of five Pacific leaders, who were represented instead by lower-ranking ministers. Despite the divisions, the meeting provided an opportunity for Pacific governments to collectively raise concerns about security developments in their region.

Dispute over China’s missile test

The dispute over China’s missile test reflects the growing strategic importance of the Pacific, where military activity by major powers is increasingly drawing the attention of island nations. For countries located along potential missile flight paths, the demand for advance notification is framed as a matter of safety, transparency and regional reassurance.

The Pacific Islands Forum’s statement does not amount to a unanimous condemnation of China, given Nauru’s dissent, but it demonstrates that a significant majority of Pacific governments are prepared to publicly raise concerns about Beijing’s military activities.

The summit also underscored the region’s complicated diplomatic landscape. While China has expanded its economic and political engagement with Pacific island states, countries such as Palau continue to maintain formal relations with Taiwan. Nauru, meanwhile, restored diplomatic relations with China in 2024 after previously recognizing Taiwan.

The next Pacific Islands Forum summit is scheduled to be hosted by New Zealand in 2027, when regional leaders are expected to confront many of the same questions surrounding security, strategic competition and the Pacific’s increasingly contested diplomatic environment.

(Source: Reuters)

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ussian President Vladimir Putin and Chinese President Xi Jinping used their first face-to-face meeting since May to underscore the strength of their partnership, gathering on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Bishkek, Kyrgyzstan. Xi told Putin the relationship between Beijing and Moscow had grown steadier even as global affairs have become harder to predict, while Putin responded that cooperation between the two countries was advancing well across the board. China has continued to deny providing material backing for Russia’s war effort in Ukraine, now in its fifth year.

The two-day gathering in Bishkek marks the SCO’s 25th anniversary and has drawn more than a dozen heads of state, including Iran’s Masoud Pezeshkian, India’s Narendra Modi, Pakistan’s Shehbaz Sharif, and Turkey’s Recep Tayyip Erdogan attending as a dialogue partner. The event unfolds against the backdrop of Russia’s ongoing invasion of Ukraine, now past its four-and-a-half-year mark, and the six-month-old war between the United States and Iran. Putin and Xi have historically used the summit as a platform to project the idea of a multipolar global order and to signal unity against Western influence. Kremlin spokesman Dmitry Peskov said the Putin-Xi conversation centered mainly on economic matters, with Ukraine coming up only briefly.

Putin also sat down separately with Modi, and the two arrived together for their talks. Modi said India stood ready to help bring the Ukraine conflict to a close, while Putin said Moscow was moving toward a resolution without offering specifics. Separately, peace negotiations mediated by Washington remain at a standstill, though CIA Director John Ratcliffe reportedly traveled to Moscow for discussions last week.

Iran’s Pezeshkian signals openness to de-escalation

Putin was also set to meet separately with Pezeshkian, whose country has strengthened military and economic cooperation with Russia since the invasion of Ukraine began, including supplying drones for Moscow’s campaign. Both Russia and Iran remain among the most heavily sanctioned nations globally. Trump has cautioned both Moscow and Beijing against arming Tehran, and US officials reportedly used Ratcliffe’s Moscow visit to reinforce that warning alongside discussions on Ukraine.

Speaking in Bishkek shortly after the first exchange of fire between the US and Iran in weeks, Pezeshkian told Modi that Tehran remained committed to seeking a diplomatic resolution rather than prolonging the conflict. Putin, Xi, Pezeshkian, Modi and Sharif were expected to join a plenary session led by Kyrgyz President Sadyr Japarov. Beyond its 10 full members, the SCO now counts 15 dialogue partners, including Turkey, Saudi Arabia and Qatar, plus observer states Afghanistan and Mongolia — a bloc that represents roughly 40 percent of the world’s population and a quarter of global GDP, despite ongoing disagreements among its members.

(Source: Aljazeera English)

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he Trump administration is negotiating with Venezuela’s interim government to secure a direct ownership stake in the country’s oil resources, according to two US officials cited by US media Thursday.

The talks center on more than a dozen productive oil fields containing approximately 90 billion barrels in proven reserves, rather than Venezuela’s total estimated 300 billion barrels, Axios reported. A final agreement could double US oil reserves and reshape energy dynamics across the Western Hemisphere, the outlet said.

“Calling this agreement huge would be an understatement. It’s massive,” one official told Axios.

Under the proposed arrangement, Washington would receive an equity stake in the selected fields. Private companies, including American firms, would develop the sites and generate additional oil revenues for the Venezuelan government.

The negotiations are being led by US Secretary of State Marco Rubio and Venezuela’s Acting President Delcy Rodriguez, with White House Deputy Chief of Staff Stephen Miller also involved, according to the report.

Strategic energy push amid global supply strains

The potential deal comes as global oil markets face disruption from wars in Iran and Ukraine, contributing to elevated prices. The US Strategic Petroleum Reserve has dropped to its lowest level in four decades, increasing pressure on Washington to secure new supplies.

Venezuela holds the world’s largest proven oil reserves, but years of underinvestment, mismanagement and declining production have left its energy sector operating far below capacity.

The Trump administration has made expanded US access to Venezuelan oil a central element of its energy and foreign policy in the region. Officials said the goal is to “secure the energy future of the Western Hemisphere for generations to come” while easing price pressures linked to the conflict in Iran.

US Energy Secretary Chris Wright is expected to travel to Venezuela next week to discuss ways for American companies to boost oil production in the country. The timing of any final agreement remains unclear.

The talks build on Washington’s broader efforts to rebuild Venezuela’s oil sector following the US capture of President Nicolas Maduro in January. The administration has since backed an interim government led by Rodriguez while pushing for greater American involvement in the country’s energy industry.

Amid concerns that Rodriguez could face domestic accusations of handing over national resources to the United States, the administration is emphasizing that the arrangement would benefit the Venezuelan people, Axios reported.

(Source: Anadolu Agency)

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he Strait of Hormuz has long been the lifeline for the energy production of the GCC states, enabling these oil-rich nations to export huge quantities of oil to consumers, particularly those in East Asian countries such as China, Japan, and South Korea. This allowed the GCC states to prosper, build their economies, foster population growth, and cultivate international relations, using energy as a tool of influence. However, the geopolitical shifts in the region, represented by the war between the United States and Iran in late February 2026, and the associated regional security dilemma, led to the closure of the Strait of Hormuz by Iran on March 4, 2026.

This has cast a shadow over the economies of the Gulf Cooperation Council (GCC) states, which rely heavily on energy exports, and has also affected consumer economies, the industrial production cycle, supply chains, and global trade in general. Approximately 20% of global trade passes through the Strait of Hormuz daily, including roughly 16 million barrels of crude oil, representing more than 15% of global oil demand, estimated at 104 million barrels per day, according to 2025 figures.

In addition, about 10 billion cubic feet of liquefied natural gas (LNG) passes through the Strait, mostly from Qatar, which accounts for nearly 20% of global LNG trade. Therefore, a complete halt to shipping traffic in the Strait of Hormuz has severely disrupted energy exports and crippled the economies of the GCC countries, recovery from which is likely to take a considerable time. The disruption of energy exports through the Strait led to a supply gap estimated at around 10 million barrels per day.

Alternative options to bypass Hormuz

Countries with alternative export routes, such as the UAE’s Habshan-Fujairah crude oil pipeline, and Saudi Arabia’s 1,200 km. pipeline from Abqaiq in the Eastern Province to Yanbu on the Red Sea, were unable to fill the gap due to the limited capacity of these alternative routes. The limitation of the alternative oil export pipeline was compounded for Saudi Arabia when the Houthis closed the Strait of Bab el-Mandeb in July 2026, effectively choking off Saudi oil exports. Saudi Arabia alone exports between six and seven million barrels of crude oil per day, and the crisis in the Strait of Hormuz reduced this production to less than half.

Overall, the pumping capacity of both alternative routes — the UAE’s Habshan-Fujairah pipeline and the Saudi pipeline from the Eastern Province to the port of Yanbu on the Red Sea — remained capped at only 3.5–5.5 million barrels per day. The war with Iran and its major repercussions, such as the closure of the Strait of Hormuz, posed a genuine threat, primarily to the GCC with their economies that are significantly reliant on revenues from the export of hydrocarbons. The dilemma also disclosed gaps in the GCC’s security arrangements and revealed a clear absence of long-term plans, to ensure the sustainability of energy exports without total dependence on passage through the Strait of Hormuz.

Despite the multiple official statements of condemnation and calls for the indispensability of allowing free navigation through the Strait, future considerations can be viewed through two main perspectives. First, the lack of cooperation on energy export strategies. The closure of the Strait of Hormuz severely impacted some GCC members, such as Qatar, Bahrain, and Kuwait, due to the lack of alternative shipping routes. Second, the absence of a collective approach to security, particularly maritime security, within the GCC. This was manifested in the lack of a unified stance on the conflict, and the absence of a manifest collective security framework.

Collective energy export strategy

With regard to energy export strategies and economic security, the GCC countries need a joint strategy, to ensure the continuity of oil and gas exports during times of regional crisis that cause disruption to maritime shipping, such as when transit through the Strait of Hormuz becomes impossible. First, this requires the building of trust, as transboundary pipelines will traverse the territories of neighboring countries, with coastal states serving as the final export hub. If these final export hubs are to be the Omani ports on the Arab Sea, while avoiding the use of ports on the Sea of ​​Oman due to their proximity to Iran, this will pose a challenge for countries like Kuwait, as export routes will be long, and will pass through several GCC states’ territories.

Furthermore, a single export hub implies greater vulnerability, as it will represent a center of gravity for energy resources, making it susceptible to targeting or sabotage. Second, Saudi Arabia and the UAE may consider expanding their alternative pipeline capacity to accommodate their daily oil production. However, for the UAE, the alternative export terminal at the port of Fujairah on the Sea of ​​Oman remains vulnerable, due to its proximity to Iran. Likewise, for Saudi Arabia, the alternative oil pipeline in Yanbu on the Red Sea remains dependent on the status of the other maritime corridor, the Bab Al-Mandeb Strait.

Third, it is possible to invest in LNG and storage facilities in areas that do not require passage through any of the straits. This move could be linked to increasing storage capacity to accommodate mass LNG production, which would ensure the safe flow of LNG away from conflict zones, as it passes through the straits. However, the GCC states must reach a consensus on managing unified export hubs, and again, a common export hub would remain vulnerable to attacks and sabotage. Reaching a consensus on future security arrangements and energy export strategies is crucial for the GCC states, as divergent and unilateral approaches to security and energy issues have proven strategically costly.

Collective regional security approach is a must

When viewing the issue of their inability to secure energy exports, the GCC states appear to be constrained by divergent energy transportation strategies, each of which entails numerous challenges and risks. Therefore, the GCC states may need a comprehensive review of their security cooperation, to ensure a unified stance on regional crises and support mediation efforts, so as to reach solutions satisfactory to all members and regional actors alike.

The February 2026 outbreak of war serves as a wake-up call for GCC decision-makers to enhance coordination on security issues, ensuring the continuity of energy exports and regional security. Particular attention must be paid to maritime security through a collective approach, which is currently lacking. By ensuring a unified maritime security policy, the GCC states can strengthen their naval capabilities, guarantee the interoperability of systems, improve coastal patrols, and reduce defense spending through the concept of burden-sharing.

However, collective maritime security will only bear fruit by fostering a degree of coexistence with other actors, thus bringing relative calm to the region. This would allow the GCC states to address security issues in partnership with other regional actors, such as Iran, Iraq, and potentially Yemen, without foreign interference, and through joint investments, incentives, and shared interests, to build trust and counter geopolitical volatility.

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raqi Prime Minister Ali al-Zeidi’s visits to Washington, Tehran and Ankara in quick succession are significant in terms of demonstrating the new government’s approach to foreign policy. For Iraq, Washington and Tehran are two capitals closely linked to security, capital, historical influence and developments in Iraqi domestic politics. Ankara, on the other hand, represents the most concrete, stable and reliable economic route through which the country can access global markets. For this reason, al-Zaidi’s visit to Ankara immediately following his engagements in Washington and Tehran should not be viewed as a mere neighbourly visit. This visit demonstrates that Baghdad, which has placed economic development at the centre of its government program, views Türkiye not merely as a trading partner but as a strategic gateway in Iraq’s production, transport and energy equation.

The most significant aspect of the talks in Ankara is not the number of documents signed, but rather the needs of Iraq and Türkiye that they address. Five memoranda of understanding were signed between the two countries covering educational and academic cooperation, youth and sport, industrial property, rail and road transport via the Fishhabur–Ovaköy border crossing, and the development of transport infrastructure in Iraq in exchange for natural resources. Whilst the first three agreements broaden the social and institutional foundation of the relationship, the latter two are of direct strategic importance for Iraq’s economic future. This is because these agreements strengthen the necessary links to move the Development Corridor Project – which aims to connect the Grand Faw Port in Basra to the Turkish border via Iraq and from there to Europe – into the implementation phase.

The visit also demonstrates that the strong relations established between Iraq and Türkiye in recent years are being maintained by the new Iraqi government. During President Erdoğan’s visit to Baghdad in April 2024, 27 legal texts were signed, whilst 11 documents were signed at the High-Level Strategic Cooperation Council meeting held in May 2025. The fact that Zaidi has included Ankara in the itinerary of his first foreign visit since taking office suggests that Türkiye has secured a permanent place in Iraq’s development plans.

Oil production but lack of control

Iraq has been producing oil for many years but has been unable to establish sufficient control over the routes by which this oil is transported. The fact that a very large proportion of oil revenues depends on exports via the southern ports and the Strait of Hormuz means that any military tension in the Gulf directly becomes a problem for the Iraqi budget. The closure of ports and disruption to tanker traffic affects not only oil companies but the entire state apparatus, from public sector wages to social spending. Road, rail and pipeline links via Türkiye therefore represent both a means of facilitating trade and a tool for economic security from Baghdad’s perspective.

This is where the true significance of the Development Corridor comes to the fore. If successful, the project—which is planned to link the Port of Faw to Türkiye via a network of approximately 1,200 kilometres of railways and motorways—will do more than simply transport containers from Basra to Türkiye. It will also create new industrial zones, logistics centres, energy networks and urban development areas along the route. Given Iraq’s young population and high unemployment rate, this transformation could provide an alternative to the limited employment opportunities currently available in the oil sector alone.

Türkiye plays a role in this equation that no other neighbour can easily fulfil. Iran is linked to Iraq through energy, trade and political networks, whilst the Gulf states can provide capital to Iraq. However, Türkiye is the only direct neighbour capable of connecting Iraq to the European market by road and rail, and to the Mediterranean via Ceyhan. Moreover, the economic foundation between the two countries will not be built from scratch. Trade volume between Türkiye and Iraq reached approximately 17 billion dollars in 2025, and Turkish companies have undertaken over 1,000 projects in Iraq with a total value of around 40 billion dollars. The setting of a medium-term trade target of 30 billion dollars during the Ankara talks demonstrates the will to roughly double the current level of trade.

Developments in the energy sector also demonstrated that the visit was not limited solely to the transport agenda. Although no long-term, comprehensive energy agreement was signed at the ceremony in Ankara, TPAO’s acquisition of a 15 per cent stake in the company managing BP’s operations in Kirkuk is a step that could transform Türkiye from merely being a buyer and transit country for Iraqi oil into a production partner.

A few days after the visit, Türkiye and Iraq signed a provisional agreement extending the use of the existing oil pipeline for another year, with a capacity of 750,000 barrels per day. This also showed that the talks in Ankara had begun to produce concrete results. Whilst time is being gained to prepare a broader energy agreement, Baghdad has secured the use of the only operational oil export pipeline. Given that the pipeline carries approximately 170,000 barrels per day, increasing the current capacity could be a significant step in Iraq’s efforts to reduce its dependence on the Strait of Hormuz.

The secret behind the fifth agreement!

The signing ceremony in Ankara also brought to light the main obstacle facing the Iraqi government. Whilst the signing of five agreements was expected, President Erdoğan’s realization that one agreement had not been signed, followed by Zaidi’s turn to Iraq’s Minister of Transport, Veheb al-Hasani, and the subsequent inclusion of the remaining documents in the signing process, were widely discussed in the media of both countries. Hasani later explained the incident as a technical and protocol-related disagreement. A spokesperson for the Iraqi Ministry of Transport, however, stated that there had been a prior dispute on the Iraqi side—involving the Ministry of Foreign Affairs, the Prime Minister’s Office and the Ministry of Oil—regarding the inclusion of the document in the visit’s program.

In contrast, some Iraqi and Turkish commentators alleged that the minister, who has a background in the Badr Organization, was attempting to slow down the Development Corridor agreement under Iranian influence. This claim could not be definitively confirmed, and the available information is insufficient to characterize the events as a definitive act of sabotage by Iran. However, the incident itself remains significant. Whether the problem stems from a lack of protocol, inter-institutional disagreement or political influence, it demonstrates that during the implementation of strategic decisions in Iraq, different ministries, parties and actors with external connections are not acting in unison. Viewed from this perspective, the success of the Zaidi government’s economic program will in fact depend not so much on how many agreements it signs abroad, but rather on the extent to which it can implement state decisions at home.

Economy in Ankara, missiles on the ground

The joint Saudi Arabian–US air strikes that took place immediately after the visit to Ankara once again demonstrated just how fragile the security environment is in which Zaidi’s development diplomacy is being conducted. US Central Command stated that the strikes targeted logistics and weapons sites belonging to groups it alleged were directed by the Iranian Revolutionary Guards. Reports citing Iraqi and Iranian sources stated that at least 20 members of the Hashd al-Shaabi were killed. Baghdad condemned the strikes as a violation of its sovereignty, and Zaidi cancelled his visit to Riyadh, which had been scheduled for July 30. Thus, within a matter of days, Iraq – which had been discussing transport corridors and economic integration in Ankara – has once again been drawn into the military arena of US-Iranian tensions.

This development does not diminish the importance of the Ankara visit; on the contrary, it enhances it. This is because the path for Iraq to extricate itself from regional military rivalry does not lie solely in maintaining balanced relations with Washington and Tehran. Iraq must raise the cost of the conflict by developing its economic ties, thereby forcing countries to step back from clashing on its territory. It would be difficult to claim that the intensive trade, energy and transport networks to be established with Türkiye will provide Baghdad with an absolute security guarantee. However, these links will make Iraq’s stability more valuable to Türkiye, Europe, the Gulf states and international companies. Economic interdependence alone will not prevent war, but it will help Iraq move away from being perceived solely as a country defined by militias, military bases and spheres of influence.

Looking at Zaidi’s initial foreign policy moves, he is seeking investment from Washington, political balance from Tehran and economic links from Ankara. Among these three capitals, Türkiye stands out for offering the most viable route to turn Iraq’s geography into an economic advantage. Multi-billion-dollar deals in Washington could provide capital and technology. Relations with Tehran cannot be entirely disregarded in terms of internal stability. However, Iraq’s ability to generate non-oil revenue, open up to Europe, create new employment opportunities and reduce its dependence on the Strait of Hormuz depends to a large extent on the operationalisation of the routes extending northwards.

Ultimately, the visit to Ankara has done more than simply demonstrate Iraq’s growing rapprochement with Türkiye; it has also revealed the direction of the new government’s approach to development. The real issue is not the signing of the five documents. The real issue is whether the pipeline stretching from Ovaköy to Faw, the oil flowing from Kirkuk to Ceyhan, and the $30 billion trade target will make the Iraqi state stronger and more independent. If the Zaidi government can support these projects with institutional reform, transparency and state authority, relations with Türkiye could transform Iraq’s quest for balance in foreign policy into an economic strategy. Otherwise, the documents signed in Ankara will simply be added to the long list of agreements that Baghdad has accumulated over the years but has been unable to implement. .

(Originally published in Turkish by Middle East Africa)

T

he United States and Iran traded threats over a new economic confrontation on Monday, with Washington preparing what it described as an unprecedented sanctions campaign and Tehran warning it could halt all oil exports from the Persian Gulf if the pressure continues.

U.S. Treasury Secretary Scott Bessent was due to unveil new sanctions targeting countries and companies that continue trading with Iran, describing the campaign as “the single greatest financial offensive ever marshaled against an adversary.”

The measures come after months of war between the United States, Israel and Iran that have damaged Iran’s military and economic infrastructure while disrupting energy markets and shipping through the Strait of Hormuz.

“The economic D-Day” will begin with the new measures, Bessent wrote in an opinion article published in the Financial Times, warning countries that continue doing business with Iran that they could face consequences.

Iran threans to halt oil exports

Iran responded with a threat to dramatically escalate the economic confrontation.

Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Tehran could stop all oil exports from the Persian Gulf if the U.S. economic campaign continued.

“If the economic war continues, not a single drop of oil will be exported,” Rezaei said in a social media post, adding that Iran would regard countries supporting Washington’s economic campaign as participating in an act of war.

The warning raises the possibility of a further disruption to global energy markets. The Strait of Hormuz, through which a major share of the world’s oil supplies normally passes, has already been brought close to a standstill by the conflict.

Iran retains missile and drone capabilities that it has used against U.S. allies in the Gulf and has threatened commercial shipping in the strategic waterway.

The new U.S. sanctions campaign comes as Washington and Tehran remain far from a negotiated settlement. Although direct military strikes between the two countries have stopped for several weeks, the two sides have yet to resume substantive negotiations.

The conflict began on February 28 with U.S. and Israeli strikes on Iran. Months of fighting have killed thousands of people, most of them in Iran and Lebanon, and inflicted extensive damage on Iranian infrastructure.

Iran also suffered the killing of its Supreme Leader Ayatollah Ali Khamenei during the conflict, while the United States has reported 18 military personnel killed and more than 750 wounded.

Struggling economy but still standing

Despite the economic pressure, Tehran has maintained a defiant public stance. Iranian officials, however, have acknowledged that the country’s economy was already under severe strain before the war because of years of sanctions, high inflation, currency weakness and energy shortages.

The war has added to those problems by damaging infrastructure, disrupting trade and reducing production, leaving Tehran facing major reconstruction costs.

Iranian officials have warned that further economic pressure could deepen hardship, fuel public discontent and undermine the government’s legitimacy.

Washington is also seeking support from major trading partners, particularly China, which has remained one of Iran’s most important economic partners.

Bessent has urged Beijing to cooperate with the U.S. campaign, noting that China has historically obtained a large share of its oil imports from the Gulf.

China has rejected the use of economic pressure as a solution to the conflict.

“Sanctions and pressure do not help resolve the problem,” a spokesperson for China’s embassy in Washington said, while calling for diplomacy.

Calls for diplomacy continue

With direct U.S.-Iran talks stalled, several countries have attempted to mediate between the two sides. Qatar, Pakistan and Turkey have all been involved in diplomatic efforts aimed at preventing a further escalation.

Pakistan’s army chief, Field Marshal Asim Munir, was expected to visit Tehran on Monday as part of Islamabad’s efforts to promote regional peace and security. Pakistani officials said the visit would include discussions on the latest developments and Washington’s threatened sanctions.

The economic confrontation comes at a particularly sensitive moment for global energy markets. Any further disruption to Gulf oil exports could send prices sharply higher and increase pressure on countries already struggling with elevated energy costs.

For Washington, the sanctions campaign is intended to force Iran back to the negotiating table by increasing the economic cost of refusing U.S. demands.

For Tehran, the threat to halt oil exports represents an attempt to demonstrate that Iran can impose significant costs on the United States and its allies if economic pressure continues.

The confrontation therefore risks developing into a wider contest over energy, trade and financial access, even as military operations remain suspended.

With neither side showing signs of abandoning its core demands, the latest exchange of threats suggests that the six-month conflict has entered a new phase — one in which economic pressure and control of global energy supplies could prove as important as military power.

(Source: Reuters)

U

.S. government debt has surpassed $40 trillion for the first time, highlighting growing concerns about the country’s fiscal outlook as spending on social programs and interest payments continues to rise faster than government revenues.

The Treasury Department reported that total U.S. public debt reached $40.047 trillion on Tuesday. Of that amount, $32.266 trillion was debt held by the public, while $7.782 trillion represented intragovernmental holdings.

The debt has more than doubled since Donald Trump first took office in January 2017, when it stood at about $19.95 trillion. Around one-third of the increase occurred during the COVID-19 pandemic, when the Trump and Biden administrations borrowed heavily to finance emergency economic support.

Debt and interest costs continue to rise

Budget watchdogs have warned that the growing debt burden could eventually trigger a serious fiscal crisis unless lawmakers take steps to reduce spending, increase revenues, or pursue a combination of both.

“The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

The debt reached $40 trillion less than five months after passing $39 trillion, underscoring the rapid pace of government borrowing.

The United States is also facing rising borrowing costs as investors demand higher yields on Treasury securities. Thirty-year Treasury yields recently reached their highest level in nearly two decades, while demand from foreign investors has weakened.

Higher Treasury yields can increase borrowing costs across the economy, affecting mortgages, auto loans and business financing.

Treasury Secretary Scott Bessent responded Wednesday by announcing that the government would double the size of some Treasury buyback operations to at least $4 billion per transaction, in an effort to support the longer-term bond market.

Trump has repeatedly called for lower interest rates. Asked whether Americans should be concerned about volatility in the bond market, he said he was not worried and argued that a strong U.S. economy should lead to lower rates

Trump and Biden both oversaw large increases

The growth in U.S. debt has accelerated under both Trump and former President Joe Biden.

Debt increased by about $7.8 trillion during Trump’s first term, with more than half of that increase accumulating during the final nine months as the government responded to the pandemic.

Since Trump returned to office in January 2025, the debt has risen by another $3.8 trillion, bringing the increase across his two terms to about $11.6 trillion so far.

During Biden’s four-year presidency, federal debt increased by approximately $8.4 trillion, driven partly by pandemic recovery spending as well as investments in infrastructure, clean energy and other government programs.

Trump’s second-term legislative agenda is also expected to add significantly to future borrowing. The Congressional Budget Office estimates that his major tax-and-spending package, known as the One Big Beautiful Bill Act, could add about $4.7 trillion to the national debt.

Meanwhile, the federal government continues to face large annual deficits. The Treasury reported a $432 billion deficit in July, the fourth-largest monthly deficit in U.S. history.

Interest becomes a major budget burden

Rising debt is making interest payments an increasingly important part of federal spending.

The government spends roughly $7 trillion annually, with about 60% going toward mandatory programs such as Social Security, Medicare, Medicaid and veterans’ benefits.

Interest payments on the national debt now account for roughly $1.1 trillion annually. In fiscal 2025, debt-service costs exceeded Pentagon spending for the first time.

During the first 10 months of fiscal 2026, interest costs surpassed Medicare spending, becoming the second-largest federal budget item after Social Security.

The pressure is expected to grow as the aging population increases demand for retirement and health care programs while tax revenues remain insufficient to cover federal spending.

The crossing of the $40 trillion threshold has therefore renewed concerns about whether Washington can stabilize its finances while maintaining major social programs, funding national priorities and managing the rising cost of borrowing.

(Source: Reuters)

G

overnment bond markets across the United States, Japan and Europe are sending a warning to policymakers as long-term borrowing costs reach levels not seen in years, driven by rising government debt, inflation concerns and geopolitical uncertainty.

The sharp increase in bond yields is raising borrowing costs for governments, companies and households while making it more difficult for central banks to balance inflation against economic growth.

In the United States, 30-year Treasury yields rose above 5% to their highest level since 2007. Japan’s 10-year government bond yield climbed to just below 3%, its highest level in three decades. German, French and British long-term borrowing costs also reached multiyear or multi-decade highs.

The moves reflect growing concerns about the sustainability of government finances and the inflation outlook as geopolitical tensions, tariffs and the continuing war involving Iran reshape the global economy.

Rising debt and inflation pressure bond markets

The U.S. government debt burden is approaching $40 trillion, while other developed economies are also facing large fiscal deficits and growing borrowing requirements.

The prolonged conflict involving Iran has pushed oil prices higher, with crude recently rising above $90 a barrel. Higher energy prices are adding to inflation concerns and reducing expectations that central banks will be able to cut interest rates quickly.

At the same time, technology companies are borrowing heavily to finance the expansion of artificial intelligence infrastructure and data centers. That demand for capital is increasing competition with governments seeking to sell large amounts of debt.

“Bond yields’ recent surge suggests investors are losing patience with fiscal profligacy,” said Jonas Goltermann, chief markets economist at Capital Economics.

U.S. 30-year Treasury yields later eased slightly, with the yield last down 2.4 basis points at 5.286%. The 10-year Treasury yield stood around 4.71%, a level that markets are watching closely, with 5% increasingly viewed as an important threshold.

The New York Federal Reserve estimates the term premium — the additional return investors demand for holding longer-term government debt — at around 80 basis points, close to its highest level in 12 years.

Recent U.S. Treasury auctions have also highlighted rising borrowing costs. A 10-year Treasury sale cleared at a yield of 4.683%, the highest in 19 years, while a 30-year auction reached 5.216%, a 25-year high.

The increase in government bond yields has also weighed on stocks, with major indexes including the Nasdaq and Europe’s STOXX 600 falling on Tuesday.

Japan and Europe face growing pressure

Japan is experiencing a particularly significant shift in its bond market. Its 10-year borrowing costs have climbed to nearly 3%, while 30-year yields have moved above 4%.

Investors are increasingly expecting the Bank of Japan to raise interest rates as early as September as inflation concerns grow.

Higher Japanese bond yields could also affect U.S. markets because Japanese investors have traditionally been major buyers of U.S. government debt. More attractive returns at home could encourage them to reduce purchases of Treasuries.

Foreign holdings of U.S. Treasuries declined in June, according to U.S. Treasury Department data, with Japan, Britain and China among the countries reducing their holdings.

European governments are facing similar pressures. Germany’s 10-year bond yield reached its highest level since 2011, while French yields rose to their highest since 2008. Britain’s 30-year borrowing costs approached levels last seen in May, which were the highest since 1998.

High government spending and debt in countries such as France and Britain have contributed to investor concerns. Climate-related events are also expected to increase pressure on government budgets.

The bond market selloff is significant because government bond yields serve as a benchmark for borrowing across the economy. Higher sovereign yields can translate into more expensive corporate loans, consumer credit and household mortgages.

Some investors, however, believe the recent rise in yields could make government bonds increasingly attractive and eventually encourage buyers to return to the market.

The broader concern for policymakers is whether higher yields represent a temporary adjustment or the beginning of a longer period in which investors demand substantially greater compensation for lending to governments.

With inflation still vulnerable to higher energy prices, government debt continuing to rise and geopolitical risks increasing, bond markets are placing greater pressure on policymakers to demonstrate control over both fiscal policy and inflation.

(Source: Reuters)

A

merican President Donald Trump’s approval rating has fallen to 33%, the lowest level of his current presidency, as growing concerns over the war with Iran and rising gasoline prices weigh on his standing with American voters, according to a Reuters/Ipsos poll released Monday.

The four-day survey found that 64% of Americans disapproved of Trump’s performance, compared with 33% who approved. His approval rating fell from 35% in an earlier poll this month and matched the lowest level recorded during his previous presidency, in December 2017.

Trump returned to the White House in 2025 with approval from just under half of Americans, but his standing has weakened as the conflict with Iran has continued. The war has disrupted a significant share of global oil trade and pushed gasoline prices higher, adding pressure on U.S. households.

Most Americans expect Iran war to continue

The poll showed widespread concern that U.S. involvement in the conflict will last much longer than Trump initially suggested.

About 80% of Americans said they believed U.S. involvement in Iran would continue for an extended period, including 87% of Democrats and 71% of Republicans. Only 16% expected the conflict to end within a few weeks.

Trump initially suggested that the war could be resolved within weeks, but Iran has continued resisting U.S. and Israeli military pressure. The conflict has also disrupted oil shipments through the Strait of Hormuz, contributing to higher energy prices.

Trump has defended the rising cost of gasoline as necessary to prevent Iran from acquiring nuclear weapons. At a rally in New York on Friday, he told supporters that paying somewhat more for gasoline was worthwhile to prevent what he described as an evil country from obtaining nuclear weapons.

However, only about one in five Americans said the war was worth the cost. Among Republicans, only about half considered the conflict worthwhile.

The economic impact of the war could become a major issue ahead of the Nov. 3 congressional elections, with Republicans seeking to defend narrow majorities in the House while Democrats increasingly see an opportunity to gain control of the Senate.

Democrats gain ground on economy

The poll also showed Democrats gaining an advantage over Republicans on economic issues. About 38% of registered voters said Democrats would handle the economy better, compared with 35% who preferred Republicans.

That represents a significant shift from previous years and comes as voters express increasing concern about the cost of living and gasoline prices.

Democrats were also viewed as better equipped to manage the cost of living, while Republicans continued to hold a narrow advantage on immigration.

About 40% of voters said Republicans had the better approach to immigration, compared with 38% who favored Democrats. The two-point Republican advantage was the smallest recorded during Trump’s current presidency. Republicans had held a 26-point advantage on immigration in January 2025.

Although Trump’s administration has overseen a sharp decline in border crossings and expanded immigration enforcement, Republicans have faced political pressure over deadly confrontations and the growing number of people held in immigration detention, including children.

The Reuters/Ipsos poll was conducted online among 1,166 U.S. adults nationwide and had a margin of error of three percentage points in either direction.

The findings point to growing political challenges for Trump as voters confront the economic consequences of the Iran conflict and prepare to vote in the November midterm elections.

(Source: Reuters)

B

razil has begun consultations on possible retaliatory measures against the United States after Washington imposed new tariffs on Brazilian exports, escalating trade tensions between the two countries.

The Brazilian government said the new U.S. tariffs were “unjustified and arbitrary” and vowed to defend the country’s interests through all appropriate channels.

The consultations mark the first step in a process that could eventually lead Brazil to impose countermeasures on U.S. goods and services. No final decision has been made, and Brazilian officials are expected to hold further discussions with U.S. trade authorities before determining how to respond.

Brazil considers range of measures

The United States imposed a 25% surcharge in July on Brazilian goods, citing what Washington described as unfair trade practices. Brazil is also subject to a separate 12.5% tariff linked to allegations concerning enforcement of bans on forced labor.

Under Brazil’s “Reciprocity Law,” the government could respond with measures beyond traditional tariffs. Options under consideration include restrictions on U.S. audiovisual companies and the possible suspension of pharmaceutical and agricultural patents, according to sources cited by Reuters.

Brazilian officials are weighing the potential economic consequences, including possible disruptions to supply chains and higher domestic inflation, before deciding whether to proceed with retaliation.

Trade dispute escalates

The dispute is part of a broader expansion of U.S. tariffs under President Donald Trump, who has repeatedly argued that tariffs are necessary to address trade imbalances and protect American industries.

Brazilian President Luiz Inacio Lula da Silva had previously pledged to invoke the Reciprocity Law if Washington imposed the new duties. The government has now begun the formal process by requesting further diplomatic consultations with U.S. trade authorities.

The move comes as relations between Brasilia and Washington have become increasingly strained. Brazil has described the U.S. tariffs as unjustified while seeking to defend its interests through diplomatic and legal channels.

For now, Brasilia has stopped short of imposing countermeasures. The coming consultations will determine whether the dispute can be resolved through negotiations or whether Brazil moves ahead with retaliatory actions that could further deepen trade tensions between the two countries.

(Source: Aljazeera English)

A

ustralian Prime Minister Anthony Albanese said Friday that the AUKUS defense partnership with the United States and Britain remained “full steam ahead” following a lengthy call with U.S. President Donald Trump, while urging Washington to exempt Australia from U.S. tariffs.

Albanese said the two leaders reviewed progress under AUKUS and agreed that the trilateral security pact would continue to benefit all three countries.

“We reviewed the significant progress that has been made under AUKUS, which remains full steam ahead,” Albanese told reporters in Canberra.

AUKUS, established in 2021, is Australia’s largest defense project and is designed in part to strengthen the three countries’ military capabilities in the Indo-Pacific amid growing Chinese influence in the region.

Submarine program moves forward

Under the pact, U.S. Virginia-class nuclear-powered submarines are expected to be based in Australia from next year. Australia is also due to acquire several Virginia-class submarines from around 2030, while Britain and Australia are developing a new class of nuclear-powered submarine under the agreement.

Australia has committed about A$368 billion ($260 billion) over three decades to the project, including major investments in U.S. and British submarine production facilities.

The United States has said it is satisfied with progress since a review of AUKUS conducted last year. Pentagon policy chief Elbridge Colby said Washington saw increasing alignment between the three countries and expected Australia to continue meeting its commitments.

AUKUS has faced concerns over the availability of U.S. submarines and production capacity. Colby previously warned that American industry faced challenges meeting both U.S. and allied demand for nuclear-powered submarines.

China has strongly criticized the agreement, warning that it could contribute to an arms race in the Indo-Pacific.

Australia seeks tariff exemption

Albanese described his conversation with Trump as productive and said he had asked the president to exempt Australia completely from U.S. flat tariffs of 12.5%.

Trump agreed to consider the request, Albanese said.

Australia has argued that it should qualify for an exemption because it runs a trade deficit with the United States and imports large amounts of American machinery, technology and aircraft.

The leaders also discussed the conflict involving Iran and Australia’s recent defense agreements with Papua New Guinea and Fiji.

Albanese said he told Trump that Australia wanted to see an end to the conflict in the Middle East while maintaining that Iran should not be permitted to develop nuclear weapons.

The call came as Australia seeks to deepen its security cooperation with the United States while managing economic concerns linked to Washington’s trade policies. For Canberra, the future of AUKUS remains central to its long-term defense strategy and efforts to strengthen its position in the increasingly contested Indo-Pacific.

(Source: Reuters)

T

he geopolitical upheavals experienced in the international security environment in recent years are fundamentally altering the position of defense spending within economic policy. Increasing strategic competition on a global scale – particularly deepening security risks in the Middle East, such as the Russia-Ukraine War and the US/Israel-Iran War– alongside energy supply security, supply chain continuity and the global race for critical technologies, is leading to a reshaping of defense spending. In particular, NATO’s decision to raise member states’ defense spending to 5 percent of gross domestic product (GDP) in the long term signals the start of a new era, not only in security policies but also in global industrial production and technology investment. This has sparked a debate as to whether defense spending could become the new engine of economic growth.

For many years, defense spending has been assessed within the framework of the opportunity cost approach. This approach argues that public resources allocated to defense have a restrictive effect—albeit to a relative degree—on economic growth, as they are diverted from productive sectors such as education, healthcare or infrastructure investment. However, the technological transformation and changes in the security architecture over the past twenty years have necessitated a reassessment of this approach. Today, defense expenditure is viewed not merely as current expenditure-focused public spending aimed at building military capability, but as multifaceted investments that support high-tech production, research and development (R&D) activities, and export capacity.

How do defense expenditures affect economic equilibrium?

The economic effects of defense expenditures are now analyzed not only from the perspective of fiscal policy but also from the perspectives of industrial policy and technological transformation. The economic impact of defense expenditures is realized through a multi-stage transmission mechanism. In the first stage, public expenditure stimulates demand, thereby increasing aggregate demand, expanding production volumes, raising capacity utilization rates and supporting industrial production. Due to their high capital intensity, defense projects generate increased production across numerous sub-sectors, notably machinery manufacturing, electronics, metallurgy, composite materials, software and communications technologies. Thus, defense expenditure creates a powerful multiplier mechanism that mobilizes a broad supply chain.

In the second stage, R&D investments come into play. Defense projects involve significant R&D expenditure due to their high-technology nature. Technologies developed within the defense industry are transferred to other sectors over time, thereby creating long-term positive effects on productivity.

The third stage is the external balance channel. Owing to its high technology intensity, the defense industry is one of the sectors with the highest export value per kilogram. The export of defense products contributes to the current account balance and, at the same time, enables countries to move up the global technology value chain. For this reason, the defense industry is today recognized as one of the strategic determinants of high-value-added exports.

However, the effectiveness of this transfer mechanism depends largely on domestic production capacity. In countries that procure defense systems largely through imports, increasing defense budgets lead to significant outflows of foreign exchange, whereas in economies with domestic production capacity, the same expenditure is channeled back into the economy in the form of increased production, employment, technology development and exports. Consequently, the economic return on defense expenditure is linked not so much to the size of the budget as to the extent to which expenditure can be channeled into the domestic industry.

In this new global context, Türkiye’s production capacity constitutes a notable advantage. As a result of the localization policies implemented over the past twenty years, dependence on foreign sources in the defense industry has been significantly reduced. Within the defense industry, capabilities in design, system integration and high-technology production have been markedly enhanced. Consequently, defense expenditure has evolved from a structure heavily reliant on imports to a production model that generates domestic added value.

What is the contribution of Turkish defense industry companies to the economy?

One of the most significant indicators of this transformation is Türkiye’s rise in global defense exports. Over the past twenty years, Türkiye’s share of global defense exports has grown steadily and, as a result, Türkiye has become one of the key suppliers in the global defense market. This rise in export performance demonstrates that the defense industry has transformed into a strategic production ecosystem that competes in international markets, exports technology and generates foreign exchange.

Institutional transformation is equally noteworthy. Whilst in 2009 ASELSAN was the sole company representing Türkiye amongst the world’s top 100 defense industry firms, in recent years TUSAŞ, ROKETSAN, ASFAT and MKE have joined ASELSAN on the same list. The fact that companies such as STM, HAVELSAN, FNSS and BMC have entered the global top 100 defense industry companies in different years demonstrates that Türkiye’s defense industry has evolved from a single-company-centered structure into a multi-stakeholder, deepened and technologically diversified industrial ecosystem.

This rise in international company rankings is directly reflected in Türkiye’s industrial performance. An analysis of the Istanbul Chamber of Industry’s ISO 500 survey reveals that defense industry companies are steadily strengthening their positions among Türkiye’s largest industrial organizations in terms of sales from production. It is particularly noteworthy that, as of 2025, TUSAŞ has become Türkiye’s seventh-largest industrial organization, while ASELSAN has become the ninth-largest. Export performance at the company level also confirms this transformation. While ASELSAN’s export revenues have reached an all-time high in recent years, TUSAŞ has risen to the status of a key manufacturer within global aerospace and defense supply chains, with export volumes hovering at the billion-dollar level. This picture demonstrates that the Turkish defense industry has gained international competitiveness not only in platform production but also in areas such as electronic systems, avionics solutions, software, engineering services and systems integration.

How will defense expenditure take shape in the coming period?

In this regard, NATO’s plan to accelerate defense investments over the next decade is of considerable importance for Türkiye. This does not merely signify a larger export market for Türkiye. It also holds the potential to strengthen Türkiye’s strategic position within the supply chains of NATO countries, thanks to its production infrastructure with high local content, advanced engineering capabilities and defense companies capable of competing on a global scale. The growing demand from Alliance countries for defense industry products is creating long-term investment and export opportunities for the Turkish defense industry.

In conclusion, the global defense economy has entered a new phase of structural transformation. Defense expenditure is regarded not merely as public spending to meet security needs, but as strategic investments that support technology development, high-value-added production and export capacity. In the coming period, competition between countries will be shaped not so much by the size of defense budgets, but by the capacity of industrial ecosystems to convert these budgets into production, technology and exports.

The defense industry infrastructure that Türkiye has established over the past 20 years, and in particular its clusters, will provide a significant competitive advantage during this new period of expansion in global defense spending. For this reason, the defense industry will continue to be one of the key pillars of both national security and Türkiye’s development strategy, which is based on sustainable growth, high-tech production and exports.

(Originally published in Turkish by Kriter)

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ran is expected to receive the first shipment of hundreds of Chinese-made shoulder-fired air defense missile systems within weeks under a deal valued at between $60 million and $70 million, according to three sources familiar with the agreement cited by Reuters.

If completed, the purchase would represent one of Tehran’s largest known efforts to rebuild its short-range air defenses since months of fighting with the United States and Israel exposed weaknesses in its ability to protect military facilities and strategic infrastructure.

The contract reportedly covers between 300 and 400 man-portable air defense systems (MANPADS), including the Chinese-made QW-12 and FN-16 missile systems.

According to Reuters, the agreement was signed through Zhongqing Baoshang International Investment, which the sources said acted as an intermediary between Iran and the Chinese supplier.

The total value of the contract is estimated at $60–70 million, although the sources cautioned that delivery schedules, quantities and implementation details could still change.

Iran’s foreign ministry did not immediately comment on the report.

China’s foreign ministry denied the claims, stating:

“The relevant reports are completely groundless. China has consistently played a role in promoting peace and ending the conflict.”

The parent company, Zhong Qing Bao Shang Group, also did not immediately respond to Reuters’ request for comment.

Air defense overhaul after months of war

Reuters said Iran is seeking to strengthen its defenses after U.S. and Israeli strikes targeted facilities connected to its missile, drone and air defense programs during the recent conflict.

Military analysts note that portable air defense systems are particularly valuable because they can be quickly deployed by small teams and relocated frequently, making them less vulnerable than fixed air defense batteries.

The reported purchase would significantly expand Iran’s inventory of short-range air defense weapons designed to engage Low-flying aircraft, helicopters, and drones.

The QW-12 and FN-16 are infrared-guided missile systems intended to protect military bases, energy infrastructure and other sensitive locations against aerial threats.

Defense experts cited by Reuters consider the QW-12 less advanced than newer Chinese systems such as the QW-18 and QW-19 but say it remains capable of providing an effective layer of short-range protection.

According to the sources, initial shipments were expected to leave Urumqi in western China before transiting through Pakistan into Iran.

The sources did not specify whether the transfers would occur by air or overland.

Pakistan firmly denied any involvement.

The military’s media wing, the Inter-Services Public Relations, called reports linking Pakistan to the transfer of Chinese air defense systems “absolutely concocted and false.”

Reuters also reported that Iran has explored overland transportation routes for Chinese military equipment and dual-use components to reduce the risk of disruption.

Growing military ties with China

The reported procurement comes amid expanding defense cooperation between China and Iran despite years of international sanctions on Tehran.

European and Middle Eastern security sources told Reuters they were aware of discussions involving possible Iranian purchases of several QW-series MANPADS, including the QW-12, QW-18 and QW-19 variants.

Reuters previously reported that Iran was also negotiating with China to acquire anti-ship cruise missiles, although it could not determine whether that agreement was finalized.

If the current deal proceeds, it would underscore Iran’s continued reliance on a combination of domestic weapons production and foreign suppliers as it rebuilds military capabilities following months of conflict.

(Source: Reuters)

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ommercial shipping through the Bab el-Mandeb Strait dropped to its lowest level in months after Yemen’s Houthi movement launched attacks on Saudi oil installations along the Red Sea coast, raising fresh concerns over maritime security and global energy supplies.

Shipping data from Kpler showed that only 11 commodity vessels transited the Bab el-Mandeb Strait on Sunday, reflecting a sharp decline in traffic as ship operators reassessed risks following the latest escalation. The disruption comes as the Tehran-aligned Houthis seek to impose a blockade on Saudi exports, broadening the regional fallout from the ongoing U.S.-Iran conflict.

The reduced vessel traffic has already pushed physical crude prices in the Middle East, Europe, and Africa to two-month highs, highlighting growing concerns over the stability of key global shipping routes.

Among the vessels that passed through the strait were seven oil tankers, including two very large crude carriers (VLCCs) bound for Saudi Arabia’s Yanbu port to load crude oil. Another tanker linked to Russia also entered the Red Sea.

Hong Kong-flagged New Explorer

Meanwhile, four tankers exited the Red Sea carrying crude destined for Asian markets. These included the Hong Kong-flagged New Explorer, transporting approximately 2 million barrels of Saudi and Emirati crude to Ningbo, China, another tanker carrying 1 million barrels of Russian crude for China, and a vessel delivering roughly 750,000 barrels of Saudi crude to Pakistan.

A second Hong Kong-flagged VLCC, New Pearl, carrying 2 million barrels of Saudi crude to Zhoushan, China, was also reported leaving the Red Sea, becoming the fourth Chinese supertanker to transit the route since the Houthis declared a naval blockade.

The Houthi military said it targeted facilities operated by Saudi state-owned oil giant Aramco in the Red Sea cities of Yanbu and Jizan on Saturday, further escalating tensions in the region.

Traffic through the Strait of Hormuz also remained subdued over the weekend despite a pause in direct U.S. and Iranian strikes. Fewer than 10 commodity vessels crossed the strategic waterway each day, according to Kpler data.

On Sunday, seven vessels transited Hormuz, including three Iranian-linked product tankers leaving the Gulf. The previous day, only three vessels passed through the strait with their tracking systems switched off, including a VLCC heading to Qatar, a liquefied petroleum gas tanker bound for the United Arab Emirates, and a tanker carrying Qatari naphtha to Japan.

The continued disruption across both the Bab el-Mandeb Strait and the Strait of Hormuz underscores mounting risks to global shipping and energy markets as regional tensions remain high.

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hen one thinks of the Middle East and Iraq, the first thing that springs to mind is often oil. However, developments in Iraq over recent weeks have once again demonstrated that oil is no longer merely an economic resource, but a strategic factor that determines state capacity, foreign policy and the regional balance of power.

Following the tensions between Iran and the West, the reopening of the Strait of Hormuz provided short-term relief in global energy markets. However, for Iraq, this process did not merely signify a return to normal oil sales. The Baghdad administration has also brought back onto the agenda its long-delayed objectives of increasing production and securing a higher quota within OPEC.

Whilst this may appear at first glance to be merely a matter of energy policy, there is a larger story behind the issue. As is well known, oil is both the most vulnerable and the seemingly strongest aspect of the Iraqi economy. Oil revenues bear the main burden of the state budget. Many sectors, ranging from public sector wages to infrastructure investment, and from security expenditure to social payments, are dependent on this revenue. Consequently, every fluctuation in international markets comes to the attention not only of the economic bureaucracy but also of political decision-makers in Baghdad. Even a slight decline in oil revenue can place significant pressure on the state.

The messages conveyed by the Iraqi government in recent weeks are therefore noteworthy. On the one hand, new international investments are being discussed; on the other, it is stated that production capacity can be rapidly increased. The recent interest shown by major energy companies in oil fields suggests that Baghdad wishes to draw up a long-term growth plan. The recent increase in production in the southern oil fields also emerges as a development serving the effort to boost capacity.

Turkey-Iraq talks

However, the main issue in Iraq is not merely about producing oil. The real challenge facing Iraq is determining via which routes, with what political guarantees and within what economic framework it will deliver the oil it produces to the world market. From this perspective, the renewed intensive energy talks between Turkey and Iraq carry particular significance. The topics on the agenda between Ankara and Baghdad point to a broader framework than merely the technical operation and capacity expansion of the Kirkuk–Ceyhan pipeline: oil, natural gas, electricity, energy supply security and the energy dimension of the Development Corridor.

The Kirkuk–Ceyhan pipeline, which has passed through Turkey for years, has become one of the most critical elements of this equation. The recent talks between Ankara and Baghdad, which have focused on energy cooperation, do not merely signify the renewal of a technical agreement. It appears that the two countries are seeking ways to establish a new energy architecture that will adapt to the changing regional geopolitical landscape. The duration of the agreement, the pipeline’s capacity, the transport of oil to the Mediterranean, and Iraq’s need to diversify its export routes are all being discussed at the same table.

The situation is equally significant not only from Iraq’s perspective but also from Turkey’s. Turkey has long aimed to be a country that manages energy corridors. One of the fundamental and most important pillars of this strategy is the secure delivery of Iraqi oil to the Mediterranean. For this reason, stable energy relations with Baghdad will also serve as a key tool in building political trust. An energy corridor stretching from southern Iraq to the north, and from there to Turkey and the Mediterranean, will form part of a broader picture encompassing regional trade, transport and security.

Iraq, meanwhile, has learnt the hard way in recent years the risks of relying on a single export route or a single regional balance of power. Crises in the Strait of Hormuz, the prospect of regional war and the occasional disruption of export routes in the north are prompting Baghdad to develop alternative routes. Iraq must now define its energy security not only in terms of production capacity but also through the diversity of its export routes. Consequently, the future of the Kirkuk–Ceyhan pipeline has become a key indicator of Iraq’s capacity for economic sovereignty.

Anti-corruption operations

Amidst all this, another notable development has been the anti-corruption operations being carried out domestically. The operations in Baghdad, which have targeted high-ranking figures, send a significant message regarding the corruption networks that have long been the subject of discussion within state institutions. Of course, it cannot be expected that a few operations will eliminate decades-old institutional problems. However, the rule of law and transparency in public administration will be just as decisive as oil in shaping international investors’ view of Iraq.

Similarly, the US’s resumption of dollar transfers to Iraq should not be interpreted merely as a technical financial decision. This step demonstrates that economic ties between Washington and Baghdad have not been completely severed, but that issues of security, militias and financial oversight remain on the table. It has once again become clear that economic and security issues cannot be addressed in isolation from one another.

Viewed in the light of these developments, Iraq today stands at what is perhaps one of the most critical economic thresholds of the post-2003 era. Whilst the country is striving to attract major energy investments on the one hand, on the other it is seeking to strengthen public administration, strike a balance in its foreign relations and keep as far away as possible from regional crises. If successful, it could not only become a country that increases its oil production but also emerge as a new regional actor at the centre of energy, trade and transport corridors.

However, it is clear that oil revenues alone will not be sufficient for this to happen. Institutional reforms, legal predictability, investment security and sustainable relations with neighbours are just as important as new oil fields. The fundamental challenge facing Iraq is not actually extracting oil, but utilising oil revenues for the benefit of the state. To the extent that Baghdad succeeds in this, it may cease to be a conflict zone where regional crises persist.

From Turkey’s perspective, too, it would be insufficient to view developments solely through the prism of the oil trade. Iraq’s transformation into a stable, economically strengthening country open to regional integration will serve Ankara’s interests across many areas, from security to trade, and from logistics to energy. Consequently, in the coming months, we will be monitoring not only whether Iraq can produce more oil, but also whether it can channel this oil into political stability and economic development.

(Originally published by Middle East Africa website in Turkish)

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urkish Foreign Minister Hakan Fidan warned on Thursday against the expansion of the Russia-Ukraine war into the Black Sea, saying attacks on civilian maritime infrastructure threaten regional stability and should not be tolerated.

Speaking alongside Ukrainian Foreign Minister Andrii Sybiha after talks in Kyiv, Fidan said Türkiye remains committed to preventing the conflict from spreading into the strategically important waterway.

“We do not want the war to spread to the Black Sea,” Fidan said, stressing that peace and security in the region must be preserved.

He condemned attacks targeting civilian maritime assets, saying ports, oil tankers and fishing vessels should not become military targets.

“Targeting ports, tankers and fishing boats and putting civilians’ lives at risk is not something that can be justified,” Fidan said, urging all parties to act with restraint and responsibility.

Fidan said Türkiye continues to explore new strategic approaches with the warring parties and international mediators to break the deadlock in the conflict.

Call for negotiations

He reaffirmed Ankara’s support for continuing negotiations under the Istanbul format, arguing that direct talks between Russian and Ukrainian officials had produced valuable transparency and dialogue.

“I believe it would be very beneficial for the Türkiye negotiations, particularly the Istanbul talks, to continue,” Fidan said, adding that ongoing hostilities should not prevent diplomatic engagement.

The Turkish foreign minister noted that while U.S. negotiators later became involved in efforts to achieve a broader settlement, the conflict continues with an increasing risk of escalation.

Addressing potential post-war security arrangements, Fidan said security guarantees for Ukraine would likely include land, air and naval components.

He revealed that Türkiye has agreed to lead the maritime component of those guarantees in coordination with allied countries.

“Türkiye has accepted to lead the maritime component, and we have a common understanding with our allies on this issue,” he said, adding that planning work is already being carried out by the naval forces of participating allied nations.

Ukraine is ready for a ceasefire

For his part, Ukrainian Foreign Minister Andrii Sybiha reiterated Kyiv’s readiness for a ceasefire and voiced support for Türkiye as the venue for future high-level peace negotiations.

“We believe that negotiations, especially a possible meeting between President Volodymyr Zelenskyy and President Vladimir Putin, could take place in Türkiye,” Sybiha said.

He added that only a summit between the two leaders could inject new momentum into the peace process.

“As Ukraine, we are ready for a ceasefire,” Sybiha said.

(Source: Anadolu Agency)

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he United States has reimposed a naval blockade on Iranian ports and launched another wave of military strikes targeting Iran’s southern coast, intensifying hostilities and further eroding an interim peace agreement reached last month.

The U.S. military said the renewed blockade of vessels traveling to and from Iranian ports and coastal areas took effect at 20:00 GMT on Tuesday, as Washington sought to restrict maritime activity linked to Tehran amid escalating tensions in the Strait of Hormuz.

The U.S. Central Command (CENTCOM) also confirmed a fresh round of strikes targeting Iranian military infrastructure, saying the attacks were intended to degrade capabilities used to threaten commercial shipping in the strategic waterway.

Iranian media reported explosions in or near the southern cities of Sirik and Bandar Abbas following the announcement, while earlier reports said U.S. strikes had also targeted Abadan, home to the Middle East’s oldest oil refinery, as well as Mahshahr, Qeshm Island and Kish Island.

The latest operations follow a series of U.S. strikes launched a day earlier against targets including Bushehr and Bandar Abbas, marking another escalation in a conflict that resumed despite a memorandum of understanding signed in June aimed at halting hostilities.

Iran retaliates across the Gulf

Iran responded by launching attacks against U.S.-linked targets across the Gulf region, including strikes on Kuwait, Bahrain and Jordan, while also targeting two commercial vessels in Omani waters within the Strait of Hormuz, according to regional officials.

The United Arab Emirates said one crew member was killed in the attacks on the ships.

Iran’s Islamic Revolutionary Guard Corps (IRGC) acknowledged striking the two supertankers, saying they had ignored repeated warnings while navigating what it described as an unauthorized route through the strait.

The IRGC accused the United States of encouraging vessels to violate Iranian directives and warned that continued cooperation with what it called the “aggressor enemy” would prolong disruption to shipping and increase the risk of a global energy crisis.

Bahrain said its air defenses intercepted an Iranian aerial attack, while Kuwait’s armed forces reported engaging hostile aerial targets. Jordan also said Iranian projectiles targeted military facilities on its territory.

International concern grows

Regional mediators Qatar and Oman urged restraint as the fighting intensified.

Qatar condemned attacks on commercial shipping, while Oman called on all parties to respect international law governing navigation through the Strait of Hormuz.

The International Maritime Agency expressed concern over the latest incidents, saying two seafarers had been killed and warning that the continuing cycle of military escalation threatened global maritime security.

Speaking at the White House, President Donald Trump blamed Iran for reigniting the conflict.

“They shot first, and that was a big mistake because we have been knocking the hell out of them,” Trump said, defending the renewed military campaign.

Trump also announced he was abandoning a previously proposed 20% fee on vessels transiting the Strait of Hormuz, saying it would instead be replaced by expanded trade and investment agreements with Gulf allies.

“I have decided to replace the 20% United States Reimbursement Fee with trade and investment deals that the various Gulf states will be making into the United States,” he said.

Tehran says agreement no longer binding

Iranian Deputy Foreign Minister Kazem Gharibabadi accused Washington of violating the interim agreement and destroying the framework established to reduce tensions.

According to Iranian state media, Gharibabadi said Tehran no longer considers itself bound by the memorandum of understanding, including provisions related to navigation through the Strait of Hormuz.

He rejected suggestions that renewed military pressure would force Iran back to negotiations, arguing that Washington had forfeited the diplomatic framework through its actions.

Analysts warned that the latest exchanges indicate the conflict is evolving into a prolonged confrontation rather than returning to full-scale war, raising concerns over regional stability and the security of one of the world’s most important energy transit routes.

(Source: Aljazeera English)

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hina has successfully recovered the first-stage booster of an orbital launch vehicle for the first time, marking a significant advance in its efforts to develop reusable rocket technology and narrow the gap with the United States in commercial and strategic space capabilities.

The breakthrough came during the launch of the Long March-10B rocket from the Wenchang Spacecraft Launch Site on Hainan Island on Friday. According to Chinese state broadcaster CCTV, the rocket’s first-stage booster separated approximately six minutes after liftoff before returning to a floating platform, where it executed a controlled vertical landing.

Video released by state media showed the booster descending under powered flight and touching down on the offshore platform, with smoke visible near its upper section during the landing.

The mission also successfully placed a satellite into orbit, state media reported.

Historic breakthrough

China Aerospace Science and Technology Corporation (CASC), the state-owned company that developed the rocket, described the achievement as a “historic breakthrough” for the country’s reusable launch technology.

“This mission signifies a historic breakthrough in China’s reusable rocket technology and lays a solid foundation for accelerating improvements in China’s space access capabilities,” the company said in a statement.

The successful recovery represents a key step in Beijing’s broader ambition to become a leading space power while reducing the cost and turnaround time of future launches.

Reusable rockets have transformed the commercial launch industry by allowing expensive boosters to be recovered and flown multiple times, significantly lowering launch costs. The technology has become a cornerstone of U.S.-based SpaceX’s dominance of the global launch market after the company pioneered routine booster landings nearly a decade ago.

Blue Origin, another American space company, also achieved its first successful recovery of the New Glenn rocket’s first-stage booster last November.

Reusable rocket tests

China has intensified efforts to develop comparable capabilities through both its state-backed aerospace program and an expanding commercial space sector. Several Chinese companies have conducted reusable rocket tests in recent months, although earlier attempts experienced setbacks.

The Long March-10 series is expected to play a central role in China’s long-term space ambitions, including planned crewed missions to the Moon. Chinese authorities have identified reusable launch systems as a strategic priority for strengthening the country’s access to space and supporting future satellite, exploration and defense-related missions.

(Source: CNN)

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he United States and Iran exchanged another round of military strikes on Thursday, sharply escalating tensions in the Gulf and raising fresh concerns over the stability of the Strait of Hormuz, a critical global energy corridor.

The latest escalation came after U.S. forces launched a second wave of attacks against Iranian military infrastructure overnight, with Washington saying the operation was intended to safeguard freedom of navigation through the Strait of Hormuz following Iranian attacks on commercial shipping.

Iran responded hours later by launching missile and drone strikes against U.S. military facilities in Bahrain and Kuwait, marking another direct exchange between the two countries despite previous diplomatic efforts to halt the conflict.

The U.S. Central Command (CENTCOM) said its latest operation struck approximately 90 military targets across Iran, including air defense systems, coastal surveillance installations, missile and drone storage sites, naval assets and military logistics infrastructure along Iran’s southern coastline.

The strikes followed an earlier round of attacks this week in which U.S. forces targeted more than 80 Iranian military sites.

Speaking to reporters while returning from the NATO summit in Türkiye, U.S. President Donald Trump defended the operation, describing it as retaliation for Iran’s attacks on commercial vessels transiting the Strait of Hormuz.

“We just hit them very hard,” Trump said. “Every time they hit us, we’re going to hit them 20.”

Earlier, Trump declared that the interim agreement intended to halt fighting between Washington and Tehran was effectively “over.”

Iran retaliates against US bases

Iran’s Islamic Revolutionary Guard Corps (IRGC) announced that it had carried out strikes against U.S. military positions in Bahrain and Kuwait in response to the American attacks.

The Guards warned that further retaliation would follow if the United States launched additional strikes against Iranian territory.

Iranian Parliament Speaker Mohammad Baqer Qalibaf said the Strait of Hormuz would operate only under what he described as “Iranian arrangements,” adding that U.S. “bullying and breaking its commitments no longer come without a cost.”

Iranian state media reported that three people were killed and several others injured in U.S. strikes near Ahvaz in southwestern Iran.

Multiple locations along Iran’s southern coast were reportedly hit, including Bandar Abbas, home to Iran’s largest commercial port and major naval facilities belonging to both the Iranian Navy and the Revolutionary Guards.

Additional strikes were reported in Konarak, Chabahar and Iranshahr, where a firefighter was killed during an attack on the city’s airport. Iranian media also reported damage to a railway bridge near Aqqala in northern Iran.

Oil prices climb

Global oil prices rose as markets reacted to renewed fighting and concerns that continued hostilities could threaten shipping through the Strait of Hormuz, through which roughly one-fifth of global oil supplies normally pass.

Brent crude futures rose more than 1% to nearly $79 per barrel, while U.S. West Texas Intermediate crude also gained more than 1%.

The latest exchange follows a familiar pattern seen during previous rounds of fighting, with Iranian attacks on commercial shipping followed by U.S. military retaliation and subsequent Iranian strikes on American military facilities in the Gulf.

Despite the escalating military exchanges, analysts say both sides may still be seeking to strengthen their negotiating positions while avoiding a broader regional war, although the collapse of the interim agreement has significantly reduced prospects for an immediate diplomatic breakthrough.

(Source: Reuters)

P

resident Recep Tayyip Erdoğan said NATO must evolve into an alliance that strengthens its members rather than creating dependency, as Türkiye concluded its hosting of the 36th NATO Summit with calls for greater burden-sharing, stronger defense industrial cooperation and renewed diplomatic efforts to address global conflicts.

Speaking at a press conference following the two-day summit at the Presidential Complex in Ankara on Wednesday, Erdoğan said the meeting marked a significant step toward building a stronger alliance at a time when Euro-Atlantic security faces unprecedented challenges.

“NATO should be an alliance of allies that strengthen one another, not one of countries dependent on each other,” Erdoğan said, arguing that genuine deterrence depends not only on defense spending but also on technological superiority, industrial capacity and sustainable military production.

The summit, the first NATO leaders’ meeting ever held in Ankara and Türkiye’s second time hosting the alliance after more than two decades, brought together heads of state and government from all member countries.

Erdoğan said allied leaders agreed on the need for European members to assume greater responsibility for collective defense while maintaining fair burden-sharing within the alliance.

“We have laid the foundations for a stronger NATO in which European allies undertake greater responsibility and military capabilities are reinforced through equitable burden-sharing,” he said.

Türkiye highlights military contributions

The Turkish president stressed that Türkiye has become one of NATO’s leading military contributors after decades of confronting regional conflicts and terrorism largely on its own.

He noted that Türkiye commands NATO’s second-largest land army and has safeguarded the alliance’s southeastern flank for decades while making substantial contributions to NATO missions, operations and common funding.

Erdoğan announced that Turkish F-16 fighter jets will deploy to Estonia beginning in August as part of NATO’s Air Policing mission.

He also said Türkiye will continue commanding the NATO-led Kosovo Force (KFOR) until September 2026 and will assume command of the NATO Response Force during 2028-2029.

“Türkiye has always fulfilled its responsibilities within the alliance, taking risks and paying the price when necessary,” Erdoğan said.

Defense industry emphasized

A central theme of Erdoğan’s remarks was Türkiye’s growing defense industry, one of the country’s key strategic advantages.

He said Türkiye now manufactures its own fighter aircraft, tanks, warships and air defense systems while ranking among the world’s leading producers of unmanned aerial and naval vehicles.

“True deterrence comes from three dimensions: advanced technology, sufficient scale and sustainable production,” Erdoğan said.

He welcomed the adoption of the “Ankara Strategy” during the NATO Defense Industry Forum, saying it would strengthen cooperation between NATO and defense manufacturers.

Erdoğan also renewed calls for the removal of remaining restrictions on defense trade among allies and argued that European Union defense initiatives should complement NATO rather than duplicate its efforts.

He warned that excluding non-EU allies such as Türkiye from European defense projects would limit their effectiveness.

Ukraine, Middle East discussed

The summit also addressed ongoing security crises, including Russia’s war in Ukraine and instability across the Middle East.

Erdoğan reiterated Türkiye’s offer to facilitate renewed peace negotiations between Russia and Ukraine.

“The war has become a machine of destruction that claims tens of thousands of casualties every month,” he said. “There are no losers in a just peace.”

Turning to the Middle East, Erdoğan welcomed the Islamabad Agreement, which Türkiye has supported, while expressing concern over continued violence in Lebanon and Gaza.

He said attacks in Lebanon have displaced civilians and destroyed cities, while the humanitarian crisis in Gaza continues.

“There is no room in our region for new tensions or new conflicts,” Erdoğan said. “Humanity needs peace, stability and security.”

T

he United States and Iran exchanged their heaviest military strikes since last month’s ceasefire on Wednesday, raising fears that the fragile truce between the two longtime adversaries has effectively collapsed as President Donald Trump declared the interim agreement with Tehran was “over.”

The renewed escalation unfolded as NATO leaders gathered in Ankara, where Trump confirmed that Washington had resumed military operations against Iran following what U.S. officials described as Iranian attacks on commercial shipping in the Strait of Hormuz.

According to the United States, the latest strikes were launched in response to Iranian attacks on three commercial vessels transiting the strategic waterway, one of the world’s most important oil shipping routes.

Iran responded by announcing missile and drone strikes against U.S. military facilities in Bahrain and Kuwait, marking one of the most significant direct confrontations between the two countries since fighting resumed.

The exchange represents the most serious breach of the preliminary ceasefire reached last month following weeks of conflict and negotiations mediated by regional partners.

“I think it’s over”

Speaking alongside NATO Secretary General Mark Rutte on the sidelines of the alliance summit, Trump signaled that Washington no longer viewed the interim memorandum of understanding with Tehran as viable.

“I think it’s over,” Trump told reporters when asked about the agreement that had temporarily halted fighting.

The U.S. president also dismissed prospects for renewed engagement with Iran, saying he no longer wished to negotiate with Iranian leaders, whom he described as “sick people.”

His remarks suggested the diplomatic process that had accompanied the ceasefire has effectively broken down, even as military exchanges continue to intensify.

Iran’s Foreign Ministry accused Washington of undermining the agreement through both military action and economic pressure.

In a statement released Wednesday, Tehran said recent U.S. airstrikes, together with Washington’s decision to revoke Iran’s oil sales license, had rendered key parts of the ceasefire arrangement “ineffective.”

Iran also accused the United States of interfering with maritime arrangements governing passage through the Strait of Hormuz, arguing that such actions had made implementation of the truce increasingly impossible.

The ministry warned neighboring countries hosting U.S. military forces not to allow their territories to be used for further American attacks against Iran, an apparent reference to Gulf states including Bahrain, Kuwait, Qatar and the United Arab Emirates.

The warning followed Iran’s announcement that it had launched missiles and drones against U.S. military targets in Bahrain and Kuwait earlier in the day.

Iran’s Revolutionary Guards also reported that one member of its naval forces had been killed while confronting U.S. drones near the southern port of Mashahr.

The latest military exchanges have raised concerns that the conflict could once again spread across the wider Gulf region, threatening global energy supplies and commercial shipping through the Strait of Hormuz, which carries roughly one-fifth of the world’s oil exports.

Regional tensions grow as aviation warning expanded

The renewed fighting has already prompted international aviation authorities to strengthen safety warnings across the Middle East.

The European Union Aviation Safety Agency (EASA) announced that commercial airlines should avoid operating within both Iranian and Iraqi airspace because of the heightened risk of military activity.

The updated advisory remains in effect until August 31 and replaces an earlier warning that had also covered Lebanese airspace.

EASA continues to advise airlines to exercise caution when operating near Bahrain, Kuwait, Israel, Jordan, Qatar, Oman, Saudi Arabia and the United Arab Emirates because of the potential for further military escalation.

The deteriorating security situation overshadowed discussions at the NATO summit in Ankara, where alliance leaders were expected to focus on defense spending, regional security and support for Ukraine.

Instead, much of the attention shifted to Trump’s remarks on Iran and his broader comments on NATO allies.

Criticism against Spain

The U.S. president also launched a sharp attack on Spain, accusing Madrid of failing to meet its defense commitments within NATO.

Trump said he had instructed Treasury Secretary Scott Bessent to halt all trade with Spain, calling the country “a terrible partner” in the alliance.

“I don’t want anything to do with Spain,” Trump told reporters.

He also criticized NATO over Greenland, renewing longstanding complaints about the Arctic territory and alliance burden-sharing.

The renewed conflict between Washington and Tehran comes after weeks of fragile diplomacy aimed at preventing another prolonged regional war.

Although the interim agreement had reduced direct military confrontation, tensions remained high over Iran’s nuclear program, sanctions, maritime security and regional influence.

With both sides exchanging military attacks and publicly questioning the viability of previous agreements, regional governments are increasingly concerned that the Gulf could once again become the center of a wider confrontation involving U.S. forces and Iranian-backed groups.

The latest developments also place additional pressure on NATO leaders meeting in Ankara, many of whom have emphasized the importance of preventing further instability in the Middle East while maintaining freedom of navigation through the Strait of Hormuz.

As military operations continue and diplomatic rhetoric hardens, the future of any negotiated settlement between Washington and Tehran appears increasingly uncertain.

(Source: Reuters)

I

n the current climate, where the global energy architecture is undergoing structural upheavals and supply chains are being reconfigured, Turkey is rising far beyond the role of a mere ‘transit country’ or ‘bridge’ to become a ‘hub’ that shapes the rules of Eurasian energy geopolitics. The energy partnerships established with Azerbaijan form the most solid foundation and strategic complement to this vision, which Ankara has built with a long-term strategic vision. The infrastructure initiatives, whose foundations were laid with the Baku–Tbilisi–Ceyhan (BTC) pipeline and which have reached an intercontinental dimension through the Southern Gas Corridor, confirm that Turkey is the sole strategic gateway opening up the Caspian Basin’s resources to global markets. This equation, in which Turkey plays a central role, not only constitutes one of the greatest supporters of regional stability but also acts as an asymmetric power element that counterbalances external interventions.

Turkey’s geopolitical leverage in Europe’s energy security

The radical disruptions in Europe’s energy supply chains, triggered by the Russia-Ukraine War, have elevated Turkey’s indispensable role in global energy security to an existential level. In this crisis environment, the security of Europe’s energy supply has become directly dependent on Turkey’s diplomatic and infrastructural capabilities. The Trans-Anatolian Natural Gas Pipeline (TANAP), which forms the backbone of the Southern Gas Corridor, and its European extension, the Trans-Adriatic Pipeline (TAP), position Turkey as the system’s primary controller and distributor in the delivery of Caspian gas to the West. The planned phased increase in TANAP’s capacity to over 30 billion cubic metres and the integration of new fields in the Caspian Sea into the system mean that Europe’s energy strategy will run directly through Ankara. Through these projects, Turkey is not only contributing to the energy security of the European continent but is also gaining a very powerful geopolitical lever.

The Hormuz crisis and Ankara-centered stability for neighboring countries

Turkey’s pipeline diplomacy, which has demonstrated the country’s capabilities and maturity in energy geopolitics, is also the only rational way out for regions such as the Middle East and the Eastern Mediterranean, where border disputes and political deadlocks are rife. In particular, the crises that have erupted recently around the Strait of Hormuz and the Red Sea clearly demonstrate the structural fragility caused by excessive reliance on maritime chokepoints in global energy trade. These routes, through which approximately one-fifth of global oil supplies and a significant portion of liquefied natural gas (LNG) trade pass, are extremely vulnerable to asymmetric attacks by non-state actors and the risks of regional conflict.

This situation, which constantly generates a geopolitical risk premium in global markets, makes secure land-based alternatives for the transport of Middle Eastern hydrocarbons to the West an existential necessity. It is precisely at this point that the seamless pipeline infrastructure established by Turkey with Azerbaijan offers a tried-and-tested, ready-made integration model for Gulf resources as well. In response to the high-cost and high-risk nature of maritime routes, Turkey is building a reliable land-based bridgehead connecting the Gulf directly to Europe through projects such as the Development Corridor, which runs via Iraq. Ankara’s vision could enable Middle Eastern resources to be channelled to global markets via Turkey’s secure transmission network, bypassing fragile chokepoints such as the Strait of Hormuz.

A similar situation applies to the Eastern Mediterranean. It has become clear that all alternative routes—such as EastMed, which have sought to bypass and exclude Turkey from the commercialization and delivery of the region’s hydrocarbon resources to Western markets—have failed from technical, political and financial perspectives. The flexibility of Turkey’s onshore infrastructure is positioning Ankara as one of the key decision-makers and a distribution hub for the integration of resources from the Middle East and the Eastern Mediterranean into global markets, following on from Caspian resources.

Turkey as a ‘green energy hub’ beyond fossil fuels

In the wake of wars and supply crises, Turkey has emerged as the most reliable hub to which global players are turning in their search for dependable suppliers. However, the future of this geopolitical capacity built by Ankara is not limited to conventional hydrocarbon resources or existing natural gas pipelines. In this new order, where the energy transition is gathering momentum, Turkey is also systematically implementing its strategy to transform itself into a regional clean energy hub in line with carbon-neutral targets.

The renewable energy potential of the Caspian region – comprising not only the Caspian Sea’s 157 gigawatt technical wind energy potential but also the ‘green energy’ capacity of the Karabakh and Eastern Zangezur regions – can only be integrated into global markets via Turkey’s national grid and transmission infrastructure. Plans to transport the renewable energy to be generated – in the form of electricity and green hydrogen – to Europe via the Nakhchivan corridor and Turkey could completely change the rules of the game. Adapting existing natural gas infrastructure—particularly TANAP—to facilitate hydrogen transport in the future will transform Turkey from a traditional natural gas trading hub into one of the key players shaping the clean energy markets of the future.

The shift from physical transportation to setting commercial rules

All these physical infrastructure and green transition projects lay the groundwork for Turkey’s strategy to evolve beyond its ultimate vision in energy geopolitics—that of being a ‘bridge country’—and become a price-setting hub. Ankara is crowning the physical network it has established through pipelines and electricity grids with the aim of creating an international trading centre where energy prices are set. In this regard, the natural gas trading centre being established in Thrace and initiatives to deepen national energy markets are transforming Turkey from merely a transit route for energy flows into a financial magnet where regional market conditions are shaped. The fact that critical suppliers such as Azerbaijan are adding volume and depth to this trading hub not only strengthens Ankara’s hand in global markets but also compels neighbouring countries to integrate into the market architecture established by Turkey in energy trade.

Within the context of Turkey’s national energy strategy, the relations it has developed with Azerbaijan go beyond a conventional trade agreement to constitute the construction of a geo-economic integration centred on Ankara. Turkey, which has served as a shield against Europe’s crises and assumed a rule-setting role in the balance of power in the Eastern Mediterranean under the traditional concept of energy security, is also striving to utilise its vast infrastructure advantage in integrating with the renewable energy revolution. As the energy architecture of the future is redesigned in line with the goals of a ‘carbon-neutral economy’, Turkey, with its autonomy, strategic vision and strong alliances, will continue to be one of the indispensable centres of gravity in the global energy order for decades to come.

(Originally published in Turkish by SETA Foundation)

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ollowing approximately 100 days of tension, Iran and the US announced on Sunday 14 June that they had reached an agreement on a memorandum of understanding. On 17 June, the text of the 14-point memorandum of understanding was signed by US President Donald Trump and Iranian President Mesud Pezeşkiyan. Thus, an agreement has been reached that will launch a 60-day negotiation process between the two countries. The final outcome will be determined by the agreement reached at the conclusion of these 60 days of negotiations. From this perspective, it is fair to say that the current memorandum of understanding serves as a sort of ‘goodwill document’ to initiate the negotiation process between the two countries. This document also serves as a guide regarding the issues to be addressed during the negotiation process. In this context, it is worth examining in detail the matters covered by the Memorandum of Understanding.

Matters covered by the memorandum of understanding

The provisions set out in the 14-article Memorandum of Understanding are broadly divided into two categories. Some of these are provisions that come into force upon the signing of the Memorandum of Understanding, whilst others are provisions expected to come into force subject to the outcome of the 60-day negotiations.

Accordingly, Articles 1, 4, 5, 10 and 11 of the Memorandum of Understanding cover the matters that come into force upon its signing. Article 1 stipulates that the US, Iran and their allies must immediately and permanently cease hostilities on all fronts where tensions persist, particularly in Lebanon. This article also emphasises that the parties shall henceforth refrain from initiating war or military operations against one another, shall not issue threats, and that Lebanon’s sovereignty and territorial integrity shall be guaranteed. Consequently, the implementation of this article extends not only to the US and Iran but also to Israel and Hezbollah. Indeed, Iranian Foreign Minister Abbas Arakchi stated in a statement that one party to the agreement consists of the US and Israel, whilst the other comprises Iran and Hezbollah. From this perspective, any potential conflict between Hezbollah and Israel is of critical importance. Given Israel’s statements that it will not withdraw from the territories it occupies in Lebanon, it is clear that this provision is also one of the factors rendering the agreement fragile.

Another important issue—the keeping of the Strait of Hormuz open and the regulation of transit—is addressed in Articles 4 and 5 of the Memorandum of Understanding. Accordingly, the US will lift its naval blockade against Iran within 30 days, commencing immediately after the signing of the agreement. In return, Iran will ensure that traffic through the Strait of Hormuz returns to pre-war levels within 30 days. It has been stated that Iran will not charge fees to ships transiting through the Strait of Hormuz for a period of 60 days. Once the 60-day period has ended, it is envisaged that Iran will reach an agreement with Gulf states, primarily Oman, regarding transit arrangements. It has also been stated that the US will withdraw its troops from the vicinity of Iran. According to statements by US officials, this does not imply that the US will withdraw from its bases in the region; rather, it refers to the restoration of the US military presence to its pre-war status.

Iran’s frozen assets

Another issue expected to be implemented following the signing of the memorandum of understanding concerns Iran’s frozen assets and restrictions on its oil sales. Under Articles 10 and 11 of the Memorandum of Understanding, the US Department of the Treasury will issue the necessary authorizations regarding Iran’s oil sales and related insurance, transport and banking transactions, which will remain in force until sanctions are lifted. In addition, Iran’s frozen assets will be released. The details regarding the implementation of these articles will be determined during the negotiation process.

In addition to the provisions of the Memorandum of Understanding that come into force upon signature, there are also provisions that will come into force with the final agreement, which is expected to be signed following 60 days of negotiations. These provisions cover more fundamental issues than those that come into force upon the signing of the Memorandum of Understanding and require detailed technical information.

The sanctions imposed on Iran in connection with its nuclear program also constitute one of the provisions contained in the Memorandum of Understanding. The sanctions are addressed in Articles 6 and 7 of the Memorandum of Understanding. Accordingly, all sanctions imposed on Iran – primarily those enacted through United Nations Security Council (UNSC) resolutions and those unilaterally imposed by the US – will be lifted. In addition, the US will plan an investment program worth at least 300 billion dollars, with the assistance of its regional allies, to support Iran’s economic development. The program will operate entirely under US supervision. It is stated that this program has been established by the US as an alternative to Iran’s claim for war reparations. [OO1] The implementation of the program is contingent upon a final agreement following the negotiations. The issue of sanctions, meanwhile, constitutes one of the first matters to be addressed upon the commencement of negotiations.

An examination of the articles of the Memorandum of Understanding reveals that, alongside operational provisions, there are also articles containing general provisions. For example, Article 2 of the Memorandum emphasizes that Iran and the US shall respect each other’s sovereignty and territorial integrity and shall not interfere in each other’s internal affairs.

Finally, Articles 12, 13 and 14 regulate the operation of the Memorandum of Understanding. According to these articles, a mechanism will be established to monitor the implementation of the Memorandum of Understanding. Once the provisions set out in Articles 1, 4, 5, 10 and 11 of the Memorandum of Understanding have entered into force, the two parties will commence 60 days of negotiations. The final agreement reached following the 60-day negotiations will also be confirmed by a UN Security Council resolution.

Risks and opportunities

One of the most significant aspects envisaged by the Memorandum of Understanding concerns Lebanon. Accordingly, it provides for an immediate cessation of hostilities in Lebanon and guarantees of Lebanese sovereignty and territorial integrity. However, Israel has stated that it will not withdraw from the territories it occupies in Lebanon; not content with this, it has also launched attacks on Lebanese territory following the announcement that an agreement had been reached between Iran and the US. Similarly, the memorandum of understanding signed between Iran and the US has drawn predominantly negative reactions from within Israeli domestic politics.

Channel 14, based in Israel and a staunch supporter of Netanyahu, has levelled harsh criticism at Trump over the signed memorandum of understanding. This situation has prompted a reaction from US Vice-President JD Vance. Consequently, it is evident that the memorandum of understanding is highly fragile, given that Israel – one of its indirect parties – has adopted such an adversarial stance. However, as can be inferred from the reactions of Trump and his deputy Vance, the US administration appears determined to secure a final agreement. Yet, only time will tell whether this US determination will be sufficient to rein in Israel.

Another risk factor is the potential for new regulations governing transit through the Strait of Hormuz. According to the provision in the memorandum of understanding, Iran will temporarily allow transit through the Strait of Hormuz without charging any fees. However, once the 60-day period has expired, a new arrangement will be put in place in consultation with other Gulf states, primarily Oman. Indeed, Iran has previously held discussions with Oman on this matter. Iran maintains that transit through the Strait of Hormuz should be under the control of both Oman and Iran. In this regard, it proposes that a specific fee be charged in return for the service provided. Furthermore, Iran has raised the issue of distinguishing between military and civilian transit. Iran’s refusal to back down from these demands, coupled with the other side’s refusal to accept them, poses a risk to the negotiation process.

Although the signed memorandum of understanding contains elements of risk, it represents the highest-level interaction between the two countries since the 1979 Iranian Revolution. For the first time since then, the presidents of the two countries have signed a document aimed at securing peace. This not only signals the beginning of a new era but also demonstrates that 47 years of hostility have borne no fruit. The most concrete example of this is the tensions and conflicts that have arisen between the two sides over the past year. For this reason, the memorandum of understanding signed is more likely to evolve into a lasting agreement than previous ones.

Unlike other negotiations, the current talks are taking place against a backdrop where other options – primarily war – have already been tried alongside diplomacy. Given that war, as the most radical option, has proved fruitless, it is clear that the two sides have no alternative to diplomacy. Consequently, it is highly likely that the new process that has been initiated will result in peace. However, given that the negotiations leading to the KOEP lasted 18 months, it is clear that a 60-day period is not sufficient for a comprehensive agreement. It is therefore reasonable to assume that this period will be extended and that a longer-term process is on the cards.

(Originally published in Turkish by SETA Foundation)

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he United States has declined to extend the U.S.-Mexico-Canada Agreement (USMCA) in its current form, triggering a 10-year countdown toward the trade pact’s expiration while opening negotiations aimed at reshaping North America’s trading relationship.

The decision, announced Wednesday following the agreement’s first six-year review, keeps the USMCA in force until 2036 but subjects it to annual reviews unless the three member countries agree to renew and amend the pact.

The move reflects the Trump administration’s push to bring more manufacturing back to the United States, reduce trade deficits with Canada and Mexico, and tighten rules designed to limit China’s access to North American supply chains.

“The United States did not agree to renew the USMCA in its current form,” U.S. Trade Representative Jamieson Greersaid in a statement.

“As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries.”

The agreement, negotiated during President Donald Trump’s first administration and implemented in 2020, replaced the 1994 North American Free Trade Agreement (NAFTA). It governs approximately $1.6 trillion in annual trade among the three countries and underpins one of the world’s most integrated manufacturing and supply chains.

Although the decision does not immediately alter tariff-free trade across North America, it formally launches negotiations over revisions that Washington says are necessary to strengthen domestic manufacturing and improve economic security.

A senior U.S. administration official said bilateral negotiations with Mexico are scheduled to resume during the week of July 20 in Mexico City. The talks will focus on strengthening regional rules of origin for automobiles and other industrial products while preventing countries such as China from benefiting indirectly from preferential North American trade access.

The United States argues that stricter local-content requirements would encourage manufacturers to relocate more production and supply chains to the United States.

Mexico and Canada seek compromise amid industry concerns

Mexican Economy Minister Marcelo Ebrard acknowledged that negotiations remain divided over Washington’s demands for stricter automotive content rules but expressed confidence that a compromise remains achievable.

“There is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it,” Ebrard said after holding virtual discussions with Greer and Canadian trade minister Dominic LeBlanc.

Mexico has resisted U.S. proposals requiring North American-built vehicles to contain 50% U.S.-made components, a measure that would increase the overall regional content requirement to 82%.

“We wouldn’t allow our industry to be at a disadvantage,” Ebrard said, describing protection of Mexico’s automotive sector as the central issue in ongoing negotiations.

LeBlanc said Canada would continue discussions with Washington while seeking the removal of U.S. tariffs on Canadian steel, aluminum, automobiles and lumber.

The Trump administration has argued that additional time is needed to address persistent U.S. trade imbalances, noting that America’s goods trade deficit reached $197 billion with Mexico and $48.3 billion with Canada in 2025.

Officials acknowledge that much of the Canadian deficit reflects U.S. energy imports, while the growing deficit with Mexico has been driven partly by manufacturers relocating supply chains from China to Mexico in response to U.S. tariffs on Chinese goods.

Although Washington hopes to negotiate revised trade protocols with both neighbors, officials indicated President Trump remains skeptical about the long-term benefits of the agreement despite having negotiated it during his first term.

Trump has repeatedly argued that the United States would perform better economically without the USMCA, even while calling it “the best agreement we’ve ever made” when it entered into force.

Undermining North America’s competitiveness

Business groups across North America have urged governments to preserve the agreement’s tariff-free framework, warning that greater restrictions could undermine the region’s competitiveness against manufacturers in Asia and Europe.

Ivan Espinosa, chief executive of Nissan, warned that requiring substantially higher U.S. content in vehicles could worsen affordability for American consumers.

“You cannot build all the parts in the U.S. The supply chain is not set up to do that,” Espinosa told Reuters. “We need something that is actually executable.”

Agricultural organizations have also urged negotiators to preserve the agreement, noting that Canada and Mexico together purchase more than one-third of U.S. agricultural exports.

Bryan Goodman, spokesperson for the Agricultural Coalition for USMCA, said the agreement remains vital for farmers, ranchers and rural communities that depend on integrated North American markets.

The coming negotiations are expected to determine whether the three countries can modernize the agreement while preserving the free trade framework that has shaped North American commerce for more than three decades.

(Source: Reuters)

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erman federal prosecutors have charged a 50-year-old Ukrainian national with helping coordinate the 2022 sabotage of the Nord Stream gas pipelines, marking the most significant legal step yet in one of Europe’s most consequential infrastructure attacks.

The suspect, identified only as Serhii K under German privacy laws, is accused of playing a leading role in the operation that destroyed the Nord Stream 1 and Nord Stream 2 pipelines beneath the Baltic Sea, severing a major route for Russian natural gas exports to Europe months after Moscow’s full-scale invasion of Ukraine.

Federal prosecutors filed the indictment on Wednesday but declined to comment on its specific contents.

According to German public broadcaster ARD, Serhii K faces charges of attacking civilian energy infrastructure, causing explosions and destroying critical infrastructure.

The charges stem from an investigation into the September 2022 underwater blasts near Denmark’s Bornholm Island, which severely damaged both pipelines and disrupted Russian gas supplies to Europe during an already escalating energy crisis.

Court documents from December 2025 allege that Serhii K coordinated a team that used the sailing yacht Andromeda to transport explosives to the pipelines. Prosecutors claim he acted as the team’s on-board coordinator and operational leader rather than serving as a diver or explosives specialist.

The Berlin-based law firm Menaker, which represents the accused, has not commented publicly on the indictment.

German prosecutors confirmed that Serhii K is the same individual arrested in Italy in August 2025 following a German arrest warrant. Italy’s highest court later approved his extradition to Germany, where he was transferred in November 2025 to face investigation.

At the time of his arrest, German authorities alleged that the suspect had used forged identity documents to charter the Andromeda in the northern German port of Rostock before the vessel departed on the mission that investigators believe culminated in the sabotage operation.

Serhii K has denied any involvement in the explosions. His defense has maintained that he was serving with the Ukrainian armed forces and was inside Ukraine when the attacks occurred. His lawyers have argued that, even if military service were established, he would be entitled to what they describe as “functional immunity” under international law.

Ukraine denies involvement as investigation continues

The Nord Stream explosions remain among the most politically sensitive investigations in Europe, given their impact on regional energy security and the absence of any formal attribution of responsibility nearly four years after the attack.

Ukraine has consistently denied any state involvement in the sabotage or knowledge of any plot targeting the pipelines.

Speaking at a news conference in Dublin on Wednesday, Volodymyr Zelenskyy said it was too early to comment on the German indictment because Kyiv had not officially received details of the case.

“We have not officially received any details; at least I have not seen them,” Zelenskyy said, adding that it was premature to draw conclusions.

The twin Nord Stream pipelines, running beneath the Baltic Sea from Russia to Germany, had been central to Russian gas exports to Europe before relations between Moscow and the West deteriorated sharply following Russia’s invasion of Ukraine in February 2022.

Although Nord Stream 2 had never entered commercial operation, both pipelines were rendered inoperable by the explosions, eliminating a key component of Europe’s energy infrastructure.

The investigation has involved authorities from Germany, Denmark and Sweden, with investigators examining evidence including vessel movements, explosive residue and maritime records.

The indictment represents the first formal criminal case brought by German prosecutors against an individual alleged to have participated directly in the sabotage. However, investigators have not publicly alleged that the Ukrainian government authorized or directed the operation.

The case is expected to proceed through Germany’s federal court system, where prosecutors will seek to prove that Serhii K coordinated the team responsible for carrying out one of the most significant attacks on critical energy infrastructure in recent European history.

(Source: Aljazeera English)

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rtificial intelligence is rapidly reshaping the U.S. technology industry, with major companies accelerating workforce reductions as they restructure operations, automate tasks and redirect investment toward AI-driven growth.

Technology firms are increasingly citing artificial intelligence as a primary reason for layoffs, reflecting a broader shift in corporate strategy aimed at boosting productivity, lowering costs and streamlining operations.

Data from outplacement firm Challenger, Gray & Christmas show AI has become the leading justification for announced job cuts in the United States.

Nearly 40% of layoffs announced in May were attributed to artificial intelligence, a sharp increase from 7% in January, 10% in February, 25% in March and 26% in April.

The technology sector has been at the center of the trend.

Layoffs announced by technology companies during the first five months of 2026 rose 66% from the same period a year earlier, reaching 123,653 positions, making it the industry with the highest number of job cuts this year.

Economists caution that artificial intelligence is not the only factor behind the reductions. They say many companies are also responding to overhiring during the COVID-19 pandemic, persistent cost pressures and broader restructuring efforts aimed at improving profitability.

Major technology firms restructure around AI

Software giant Oracle reported one of the largest workforce reductions, revealing that its global full-time employee count declined by 21,000 over the past year.

A filing with the U.S. Securities and Exchange Commission (SEC) showed Oracle employed 141,000 full-time workers as of May 31, down from 162,000 a year earlier.

The company said the adoption and deployment of artificial intelligence technologies across its operations had resulted in workforce reductions and could continue to do so.

Software development platform GitLab also announced significant restructuring as it shifts its business model toward AI-powered services.

The company said it will reduce its workforce by about 14%, eliminating roughly 350 jobs while simplifying management structures and withdrawing operations from 22 countries as it expands infrastructure for AI-related workloads.

Meta is pursuing a different strategy, combining layoffs with workforce redeployment.

According to U.S. media reports, the social media company plans to cut around 8,000 jobs while transferring approximately 7,000 employees into new AI-focused positions.

Chief Executive Mark Zuckerberg reportedly told employees that the restructuring was necessary as competition in artificial intelligence intensifies, warning that success in the sector is not guaranteed.

Meta has already implemented multiple rounds of layoffs this year, including a 10% reduction in staff at its Reality Labs division in January, followed by additional cuts affecting hundreds of employees in March.

Broader industry transformation

Several other major technology companies have also announced workforce reductions linked to AI investments and organizational restructuring.

Financial software company Intuit said it will eliminate 17% of its full-time workforce to improve operational efficiency and focus more resources on strategic priorities, including artificial intelligence.

Networking equipment maker Cisco plans to cut approximately 4,000 jobs as it redirects investment toward AI and other growth businesses.

Cloudflare announced the elimination of more than 1,100 positions as it redesigns its organizational structure and internal processes for the AI era.

Cryptocurrency exchange Coinbase said it would reduce its workforce by around 14%, citing market conditions and its ongoing AI transformation.

Financial technology company PayPal has announced plans to reduce its workforce by 20% over the next three years while integrating artificial intelligence throughout its operations.

Social media platform Snap also joined the growing list of companies restructuring around AI, announcing plans to lay off about 1,000 employees—roughly 16% of its workforce—and eliminate more than 300 vacant positions.

Chief Executive Evan Spiegel said rapid advances in artificial intelligence were reducing repetitive tasks and accelerating business processes, making organizational changes necessary.

Other companies undertaking AI-related restructuring this year include Angi, Atlassian, Block, Crypto.com and Wix.

The wave of layoffs highlights how artificial intelligence is reshaping employment across the technology industry, with companies increasingly seeking to automate routine work while investing heavily in AI infrastructure and specialized talent.

While businesses argue the changes are necessary to remain competitive in a rapidly evolving market, the trend has also intensified concerns about the long-term impact of artificial intelligence on employment, particularly in administrative, software development and support functions.

(Source: Anadolu Agency)

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entral banks around the world are planning to reduce their holdings of U.S. dollars over the coming decade for the first time, reflecting growing concerns over geopolitical risks and policy uncertainty surrounding the world’s dominant reserve currency, according to a new survey released on Tuesday.

The findings, published by the Official Monetary and Financial Institutions Forum (OMFIF), mark the first time its annual survey has found that more central banks intend to decrease their dollar allocations than increase them over the next 10 years.

The survey, which gathered responses from 90 central banks, sovereign wealth funds and public pension funds managing a combined $10 trillion in assets, points to a gradual transformation in global reserve management as policymakers prepare for a more fragmented international financial system.

Although the U.S. dollar remains the world’s primary reserve currency and has gained around 3% this year, respondents increasingly cited political uncertainty in the United States and rising geopolitical tensions as reasons to diversify their portfolios.

The shift comes amid broader debate over the future of the global monetary system following heightened international tensions, including the recent U.S.-Iran conflict, and changing global economic dynamics.

OMFIF Senior Economist Yara Aziz said public investors increasingly regard market volatility as a permanent feature rather than a temporary disruption.

“The old assumption that public investors can wait for the environment to normalize looks increasingly unrealistic,” Aziz wrote in the report.

Gold strengthens its role in reserve management

Despite expectations of reduced dollar holdings, the survey found no clear replacement for the U.S. currency.

Instead, reserve managers are gradually expanding holdings across a wider range of currencies while significantly increasing allocations to gold.

Nearly four out of five central banks surveyed, along with 60% of public investment funds, believe the international monetary system is evolving toward a more multipolar structure in which reserve assets become more diversified.

Currencies outside the traditional major reserve group are attracting greater attention.

Respondents reported increasing allocations to the Norwegian krone and the New Zealand dollar, while interest in the British pound also continued to grow.

Central banks also maintained plans to increase holdings of the euro and China’s renminbi, although respondents said structural limitations continue to constrain both currencies from becoming dominant alternatives to the dollar.

Even so, almost all respondents viewed the Chinese yuan as an effective tool for portfolio diversification.

Gold emerged as one of the strongest beneficiaries of changing reserve strategies.

Held by 82% of surveyed central banks, the precious metal has moved to the center of reserve management policies after reaching successive record highs over recent years.

In the next one to two years, gold is expected to see the largest increase in allocations among reserve assets, with a net 30% of respondents planning to expand their holdings.

Analysts say central banks increasingly value gold as a hedge against inflation, geopolitical instability and financial market volatility.

Artificial intelligence reshapes investment strategies

Beyond reserve diversification, the survey highlighted a rapid acceleration in the adoption of artificial intelligence across public financial institutions.

More than two-thirds of central banks said they plan to expand the use of AI in the near future, while none of the advanced economy central banks surveyed indicated they were satisfied with current levels of AI deployment.

Overall, only 9% of central banks said existing AI integration met their needs.

Most institutions currently use artificial intelligence for data analysis, research and administrative functions, although adoption varies significantly between developed and emerging economies.

Nearly 90% of central banks in advanced economies already use AI, compared with just 44% of those in emerging markets.

The report also found growing investor interest in physical assets.

Almost 60% of public investment funds intend to increase allocations to infrastructure and real estate over the next two years, making them the most popular asset classes outside traditional financial markets.

Emerging markets are also attracting renewed attention

Thirty-eight percent of public funds plan to increase investment in emerging economies, up sharply from 27% in last year’s survey.

At the same time, interest in expanding exposure to developed economies declined significantly, with only one-quarter of respondents planning to increase allocations compared with nearly half a year earlier.

Despite diversification efforts, the United States and China remained the most attractive investment destinations, largely because of their leading positions in artificial intelligence development and technological innovation.

The survey suggests that while the U.S. dollar is likely to remain the world’s dominant reserve currency for the foreseeable future, central banks are increasingly seeking broader diversification through gold, alternative currencies, emerging markets and new technologies to navigate a more uncertain global economic environment.

(Source: Reuters)

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he United States and Iran have released the text of a 14-point memorandum of understanding that lays the foundation for ending months of conflict, reopening the Strait of Hormuz, easing economic restrictions on Tehran, and launching negotiations toward a comprehensive peace agreement.

The document, formally titled the “Islamabad Memorandum of Understanding between the United States of America and the Islamic Republic of Iran,” was read to reporters by a senior U.S. official on Wednesday and is expected to serve as the basis for intensive negotiations over the next 60 days.

While the memorandum establishes an immediate ceasefire and outlines broad commitments by both sides, many of the most difficult issues—including Iran’s nuclear program, sanctions relief, and regional security arrangements—remain subject to future negotiations.

Immediate end to war

The first provision commits both countries and their allies to the immediate and permanent termination of military operations on all fronts, including Lebanon. Both sides pledged not to initiate future military action against one another and agreed to respect Lebanon’s sovereignty and territorial integrity.

Under the second point, Washington and Tehran agreed to respect each other’s sovereignty and refrain from interference in internal affairs.

The third provision establishes a negotiation period of up to 60 days, which may be extended by mutual agreement, to finalize a broader peace settlement.

The fourth and fifth points focus on restoring maritime commerce through the Strait of Hormuz, one of the world’s most important energy shipping routes.

The United States agreed to begin lifting its naval blockade immediately and to remove all restrictions within 30 days. Washington also committed to withdrawing military forces from Iran’s vicinity within 30 days after a final agreement is reached.

Iran, for its part, pledged to facilitate safe passage for commercial vessels through the Persian Gulf and Strait of Hormuz. Tehran also agreed to remove mines and military obstacles and restore normal shipping operations over the next month.

The agreement further calls for consultations between Iran, Oman, and other Gulf states regarding future administration and maritime services in the strategic waterway.

Massive reconstruction package

One of the most significant elements of the agreement is contained in point six.

The United States committed to working with regional partners to develop a reconstruction and economic development package worth at least $300 billion for Iran.

The mechanism for implementing the fund will be finalized during negotiations, while Washington pledged to provide the necessary licenses, waivers, and permissions required for financial transactions.

Point seven outlines a U.S. commitment to terminate all sanctions imposed on Iran, including United Nations-related restrictions, nuclear-related measures, and both primary and secondary U.S. sanctions.

The timing and sequencing of sanctions removal remain subject to negotiation during the upcoming talks.

Both sides described sanctions relief as one of the most important issues to be addressed during the next phase of diplomacy.

Nuclear program left for future talks

The eighth provision addresses Iran’s nuclear activities but postpones major decisions until a final agreement.

Iran reaffirmed that it would not seek or develop nuclear weapons.

The two countries agreed that the future of Iran’s stockpile of enriched uranium would be determined through a mutually agreed mechanism. At a minimum, any solution would involve down-blending enriched material under supervision of the International Atomic Energy Agency.

Future discussions will also address uranium enrichment levels and Iran’s civilian nuclear requirements.

Under point nine, both countries agreed to maintain the status quo while negotiations continue.

Iran will not expand its current nuclear activities, while the United States pledged not to impose additional sanctions or deploy new military forces to the region.

Point ten requires the U.S. Treasury Department to issue waivers immediately permitting Iranian oil exports, petroleum product sales, banking transactions, shipping, insurance, and related services.

Point eleven concerns Iranian assets frozen abroad.

The United States agreed to make those assets available for use and to work with Iran on procedures governing their release. Washington also committed to issuing the necessary licenses and authorizations to facilitate access to those funds.

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proposed $300 billion private investment fund aimed at revitalizing Iran’s economy has emerged as a central component of the framework agreement reached between the United States and Iran to end months of conflict, according to a source with direct knowledge of the negotiations.

The fund, which would be known as the Reconstruction and Development Fund, is designed to encourage both sides to finalize a comprehensive peace agreement by offering a powerful economic incentive for post-war recovery and long-term investment.

According to the source, more than half of the proposed funding—over $150 billion—has already been pledged by companies and financial institutions across multiple regions, including North America, Asia, the Gulf, Africa, and South America.

The initiative remains contingent on the successful completion of a final agreement between Washington and Tehran. Negotiators are expected to spend the next 60 days working on unresolved issues, including Iran’s nuclear program, sanctions relief, and regional security arrangements.

Economic dimension of peace deal

The investment proposal represents one of the most ambitious economic initiatives linked to a Middle Eastern peace agreement in recent decades.

Unlike traditional reconstruction packages financed by governments or international organizations, the proposed fund would be entirely privately financed.

The source familiar with the negotiations said no government money, grants, or direct public financing would be involved.

Instead, private companies and financial institutions have committed investment capital intended for projects in key sectors of Iran’s economy, including energy, transportation, logistics, manufacturing, and industrial development.

The fund is separate from ongoing discussions regarding the release of Iranian assets frozen abroad and the lifting of U.S. sanctions.

Negotiators have reportedly established distinct tracks for those issues, with separate timelines and objectives.

“This is not compensation, reparations, or a government aid package,” the source said. “It is an investment vehicle intended to unlock economic opportunities once a final settlement is achieved.”

From compensation demand to investment plan

The idea reportedly emerged after Iran initially sought substantial compensation for damage caused during the conflict.

A senior Iranian source told Reuters that Tehran had requested approximately $400 billion in compensation from the United States for wartime losses.

Washington rejected that proposal, leading negotiators to explore alternative mechanisms capable of supporting economic recovery while remaining politically acceptable to all parties.

The resulting concept focuses on investment rather than compensation.

Under the proposed structure, regional countries and international investors would contribute through various mechanisms, including financing projects directly, establishing credit facilities, guaranteeing loans, and supporting reconstruction efforts at damaged industrial and infrastructure sites.

Projects under consideration reportedly include repairs and modernization of refineries, airports, transportation networks, industrial facilities, and major manufacturing centers damaged during the conflict.

Among the sites expected to benefit is the Mobarakeh Steel complex, one of Iran’s largest industrial enterprises.

Untapped economic potential

Supporters of the initiative argue that Iran presents significant long-term opportunities for investors if geopolitical risks and sanctions barriers can be reduced.

Despite decades of economic isolation, Iran remains one of the largest economies in the Middle East.

The country possesses the world’s second-largest proven natural gas reserves and the fourth-largest oil reserves, making it a major potential energy producer.

In addition, Iran has a population exceeding 92 million people, a relatively educated workforce, extensive industrial infrastructure, and significant potential in sectors ranging from petrochemicals and mining to tourism and agriculture.

However, successive rounds of international sanctions and political tensions have largely excluded Iran from global capital markets for more than four decades.

As a result, foreign direct investment has remained limited despite the country’s economic potential.

Analysts say that if sanctions are eased and political stability improves, Iran could attract substantial foreign investment in the coming years.

While the investment initiative has generated considerable attention, its implementation depends entirely on the success of broader negotiations.

The framework agreement announced earlier this week established a 60-day period during which U.S. and Iranian negotiators will seek to reach a comprehensive settlement.

One of the most difficult issues remains Iran’s nuclear program.

According to U.S. Vice President JD Vance, access to the reconstruction fund would depend on Iran meeting strict conditions, including dismantling key elements of its nuclear program, eliminating stockpiles of highly enriched uranium, and accepting extensive international inspections.

Iran has consistently maintained that its nuclear activities are intended for peaceful purposes and has rejected accusations that it seeks nuclear weapons.

The issue remains one of the most contentious points in negotiations.

T

he United States and Iran have reached a preliminary agreement to end months of conflict and reopen the strategically vital Strait of Hormuz, marking the most significant diplomatic breakthrough since the outbreak of war earlier this year and triggering a sharp decline in global oil prices.

The framework agreement, announced by U.S. President Donald Trump and confirmed by Iranian officials on Monday, is intended to halt military operations across multiple fronts and establish a pathway toward broader negotiations on Iran’s nuclear program and sanctions relief.

The memorandum of understanding is scheduled to be formally signed in Switzerland on Friday following mediation efforts led by Pakistan.

“The Deal with the Islamic Republic of Iran is now complete,” Trump wrote on his Truth Social platform on Sunday evening. The announcement came shortly after Pakistani Prime Minister Shehbaz Sharif revealed that negotiators had reached an agreement.

If implemented, the deal would represent the most important diplomatic achievement since the conflict began in February with joint U.S.-Israeli strikes on Iran, a war that has killed thousands, destabilized the Middle East, and disrupted global energy markets.

Ceasefire across multiple fronts

According to Pakistani officials, the agreement calls for the immediate and permanent cessation of military operations throughout the region, including in Lebanon, where fighting between Israel and the Iran-backed Hezbollah movement has complicated diplomatic efforts.

Iran’s Supreme National Security Council confirmed that military operations on all fronts would cease beginning Monday night.

Iranian Deputy Foreign Minister Kazem Gharibabadi said the agreement would establish a 60-day ceasefire period during which negotiators would work toward a more comprehensive settlement.

The future agreement is expected to address some of the most contentious issues dividing Washington and Tehran, including economic sanctions, regional security arrangements, and Iran’s nuclear activities.

Despite the breakthrough, uncertainty remains over how the agreement will affect Israel, which has not participated in the U.S.-Iran negotiations and has repeatedly insisted on maintaining freedom of military action against perceived threats in the region.

There was no immediate official response from the Israeli government following the announcement.

Strait of Hormuz to reopen

One of the most significant elements of the agreement concerns the reopening of the Strait of Hormuz, a narrow waterway through which a substantial portion of the world’s oil and natural gas exports pass.

Since the escalation of hostilities, Iran has effectively restricted shipping through the strait, while the United States imposed countermeasures targeting Iranian ports and maritime operations.

Trump announced that the waterway would reopen on Friday and said he had ordered an end to the U.S. blockade of Iranian ports.

“Ships of the World, start your engines. Let the oil flow!” Trump wrote.

Financial markets responded immediately to the news.

Brent crude prices fell more than 4 percent in early trading as investors welcomed the prospect of restored energy supplies and reduced geopolitical risk. Stock markets across Asia also posted gains as concerns over disruptions to global trade eased.

Market analysts cautioned, however, that many details of the agreement remain unclear.

“The lack of details, especially on freedom of shipping, is a concern, but not one that should constrain markets today as the surge in risk appetite plays out,” said currency analyst Sean Callow.