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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)

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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)

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.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)

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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)

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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)

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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)

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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)

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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)

I

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)

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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)

F

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)

T

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)

G

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)

A

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)

C

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)

T

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.

A

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.

Nuclear issue deferred

While the agreement addresses military hostilities and maritime security, negotiators have postponed decisions regarding Iran’s nuclear program, one of the central issues behind the conflict.

Sources familiar with the talks said nuclear negotiations will take place during the 60-day ceasefire period.

Trump has repeatedly stated that any final settlement must ensure Iran cannot develop nuclear weapons.

Iran maintains that its nuclear program is peaceful and has consistently denied seeking a nuclear arsenal.

Before the conflict, Iran had accumulated more than 400 kilograms of uranium enriched to levels approaching weapons-grade purity, according to international estimates. The future of that stockpile is expected to become one of the most difficult issues in upcoming negotiations.

Officials involved in the talks have offered differing accounts of the draft agreement.

A senior American official indicated that the eventual settlement could require the dismantling of Iran’s nuclear program and the removal or destruction of highly enriched uranium stockpiles.

Iranian officials, meanwhile, suggested that Tehran would retain the ability to dilute and manage enriched uranium domestically rather than surrendering it.

C

hinese President Xi Jinping arrived in North Korea on Monday for his first visit to the country since 2019, in a move widely seen as an effort by Beijing to reinforce its influence over Pyongyang amid growing concerns about North Korea’s increasingly close military and economic relationship with Russia.

Xi’s visit comes at a critical moment for regional security in Northeast Asia, with North Korea accelerating its weapons programs, deepening cooperation with Moscow, and further distancing itself from South Korea. Analysts say the Chinese leader’s decision to travel personally to Pyongyang underscores the strategic importance Beijing places on maintaining its longstanding alliance with North Korea.

The visit marks a departure from Xi’s recent diplomatic pattern. Since the COVID-19 pandemic, the Chinese president has significantly reduced his overseas travel, preferring to host foreign leaders in Beijing. Against that backdrop, his trip to Pyongyang is viewed as a strong signal of China’s commitment to preserving its role as North Korea’s most important partner.

Xi is expected to hold extensive talks with North Korean leader Kim Jong Un on regional security, economic cooperation, and the changing geopolitical environment in East Asia.

Growing Russian influence

A key factor behind the visit is believed to be North Korea’s rapidly expanding relationship with Russia.

Since Russia launched its full-scale invasion of Ukraine in 2022, Pyongyang has emerged as one of Moscow’s most important partners. North Korea has reportedly supplied Russia with artillery shells, missiles, military equipment, and manpower to support its war effort. In return, Moscow is believed to have provided economic assistance and potentially advanced military technologies.

The partnership has generated concern in Beijing, which has historically been North Korea’s principal economic supporter and diplomatic protector. For decades, China accounted for the overwhelming majority of North Korea’s foreign trade and served as the country’s primary source of fuel, food, and investment.

While China and Russia maintain close strategic ties, Beijing is wary of losing influence over its isolated neighbor. Analysts say Xi’s visit is intended in part to ensure that Pyongyang does not drift too far into Moscow’s orbit.

“China wants to remind North Korea that it remains an indispensable partner,” regional analysts have noted. “The relationship with Russia may be useful for Pyongyang, but Beijing still offers economic and political support that no other country can fully replace.”

The growing Russia-North Korea partnership has also raised concerns about military cooperation. Experts believe Russia may be sharing technologies that could accelerate North Korea’s missile and nuclear programs, developments that could alter the security balance on the Korean Peninsula.

Concerns over military advancements

China’s leadership is believed to be closely monitoring North Korea’s recent military activities.

North Korea has conducted multiple missile tests this year and continues to modernize its arsenal. In May, state media reported the successful development of an artificial intelligence-guided tactical cruise missile, while recent images released by Pyongyang showed Kim Jong Un inspecting facilities linked to the production of nuclear materials.

The North Korean leader has repeatedly emphasized the need to expand the country’s nuclear deterrent and strengthen its military capabilities in response to what he describes as growing threats from the United States and its allies.

Although China supports North Korea as a strategic buffer separating Chinese territory from US forces stationed in South Korea, Beijing has traditionally favored stability on the peninsula over military escalation. Chinese officials fear that an emboldened North Korea could provoke regional tensions and trigger stronger military cooperation among the United States, South Korea, and Japan.

Analysts believe Xi will seek greater clarity on Pyongyang’s military ambitions and may encourage restraint to avoid destabilizing the region.

Regional security challenges

The visit also takes place amid growing concerns over shifting security dynamics in East Asia.

Relations between North and South Korea have deteriorated sharply in recent years. In 2024, Kim Jong Un formally abandoned the long-standing goal of peaceful reunification with South Korea, declaring the South a hostile state. Since then, communication channels between the two sides have largely remained frozen.

At the same time, security cooperation between South Korea and Japan has expanded. The two US allies have increased intelligence sharing and military coordination in response to North Korea’s weapons development and broader regional security concerns.

Recent discussions regarding a possible military logistics support agreement between Seoul and Tokyo have further alarmed Beijing, which views closer cooperation among US allies as part of a broader effort to contain China’s influence in the region.

Against this backdrop, Xi’s trip serves not only to strengthen bilateral ties with North Korea but also to demonstrate China’s continued role as a central actor in regional security affairs.

O

n May 13, in Astana’s Palace of Independence, Recep Tayyip Erdoğan and Kassym-Jomart Tokayev stood before cameras and announced what they called an “eternal friendship declaration”, a phrase that sounds ceremonial until you read the fine print. Bilateral trade exceeding $5 billion, around 3,800 Turkish companies operating on Kazakh soil, a $15 billion trade target set as the new horizon, and, cutting across all of it, the Middle Corridor. Not as background noise, but as the explicit spine of the entire visit.

Two days later, in the ancient city of Turkistan, the Organization of Turkic States held its informal leaders’ summit under the theme of artificial intelligence and digital development. Erdoğan, addressing the gathering, went beyond the official agenda. He connected the Iranian crisis in the Strait of Hormuz directly to the urgency of the Middle Corridor, a land-and-sea route stretching from China across Kazakhstan, the Caspian, Azerbaijan, Georgia, and into Turkey before reaching European markets. The logic was blunt: when maritime arteries choke, overland corridors breathe.

That argument is no longer speculative. It is, increasingly, a fact confirmed by freight data, political decisions, and the quiet repositioning of powers that prefer not to make headlines.

The numbers tell their own story

The Trans-Caspian corridor carried 4.5 million tons of cargo in 2025, up fivefold from the 800,000 tons recorded just seven years ago. Container traffic along the route grew 36% in 2025 alone. Kazakhstan, which handles 85% of the freight flowing through this corridor, now aims to push that figure to 10 million tons. Rail cargo between Ankara and Astana rose 35% this year. Delivery times on the route have already been cut from 28-32 days to 13-17 days, and there is still room to compress them further.

These are not projections dressed up as achievements. They reflect a structural shift that began quietly after 2022, when the war in Ukraine made the northern Russia-bound routes functionally untenable for many European and Asian shippers. The Middle Corridor absorbed that displacement. Turkey sat at the western end of that displacement, and it knew it.

Where Turkey actually stands

Turkey is not simply a transit country on the Middle Corridor. It is the corridor’s European gateway. Every container that moves from Kazakhstan across the Caspian, through Azerbaijan and Georgia, must pass through Turkish territory before reaching European markets, whether by rail through Edirne or by sea from Istanbul and Mersin. Turkish ports handled a record 553 million tons of cargo in 2025. That record did not emerge from thin air. It reflects years of investment in port capacity, rail connectivity, and customs infrastructure.

The Baku-Tbilisi-Kars railway, the iron thread connecting Central Asia to Turkey’s rail network, remains still underutilized relative to its potential. Capacity expansion has lagged behind demand. There are bottlenecks. Anyone who follows this sector knows that the Kars junction is one of them. Erdoğan’s Astana statements signaled awareness of this, yet the speed of institutional follow-through remains the actual variable in the equation.

What Turkey brings to the corridor, beyond geography, is institutional leverage. Ankara sits inside NATO, maintains active trade relations with the European Union, and holds the presidency of the Organization of Turkic States for the coming period. That combination, Western institutional membership paired with Turkic world leadership, gives Turkey a bridging function that no other country on the corridor can replicate. Kazakhstan cannot speak to Brussels the way Ankara can. Brussels cannot speak to Astana the way Ankara can. That is not a minor advantage; it is the corridor’s political operating system.

The OTS summit: More than a photo opportunity

The informal summit in Turkistan produced, on its surface, communiqués about artificial intelligence, digital infrastructure, and joint language models. Uzbekistan proposed what its delegation called a “Digital Turkic Corridor”, a fibre optic and data centre network mirroring the physical trade route. These are not trivial ambitions. A digital corridor that piggybacks on a physical one creates compounding returns: shared data sovereignty, reduced dependency on non-Turkic tech infrastructure, and a political narrative of self-sufficiency that resonates across the region.

For Turkey, the digital corridor proposal is both an opening and a quiet pressure. Istanbul already functions as one of the most significant internet exchange points between Europe, the Middle East and Central Asia. If a unified Turkic digital infrastructure takes shape, and Turkey helps define its architecture, the strategic weight of Turkish territory compounds further. Should Ankara move decisively, that architecture will be shaped on Turkish terms, not by outside players already embedded in the region. The Turkestan summit named the ambition. Whether Turkish institutions can match it with speed will be one of the defining questions heading into the formal OTS summit this autumn.

Yet the political subtext of the Turkistan summit deserves as much attention as its official agenda. Tokayev’s statement, publicly opposing any military dimension for the OTS, was a counterweight to Turkey’s offer to share its defense industry experience with Turkic states

That exchange, which received far less media attention than the signing ceremonies, exposes the OTS’s central unresolved question: Is this organization a civilizational platform, a trade bloc, or the embryo of something with harder edges? Astana, balancing its northern and eastern dependencies with Russia and China, prefers the answer to remain vague. Ankara would not mind a slightly sharper answer.

This is not a crisis. It is a negotiation, one that will run through the 13th formal OTS summit in Turkey this autumn, and well beyond it.

U

.S. President Donald Trump has endorsed Colombian presidential candidate Abelardo de la Espriellaahead of this month’s runoff election, injecting an international dimension into a closely contested race that could shape future relations between Colombia and the United States.

In a social media post on Tuesday, Trump said the outcome of the election would be critical for Colombia’s future and its ties with Washington.

“The results of this election are very important to the future of Colombia and its relationship to the United States,” Trump wrote.

De la Espriella, a right-wing lawyer who has never held elected office, will face leftist senator Ivan Cepeda in a runoff after neither candidate secured an outright majority in the first round of voting.

According to official results, de la Espriella won nearly 44% of the vote, while Cepeda received just under 41%, setting up a highly competitive second-round contest later this month.

Security and crime dominate campaign

De la Espriella has built his campaign around promises to crack down on criminal organizations and armed groups that continue to operate across parts of Colombia.

His proposals include the construction of 10 large prisons and a tougher security strategy aimed at combating drug trafficking and organized crime.

The candidate’s rhetoric and law-and-order agenda have drawn comparisons to Nayib Bukele, whose aggressive anti-gang policies have earned both praise and criticism across Latin America.

In a video shared on social media following Trump’s endorsement, de la Espriella emphasized the importance of cooperation with Washington in addressing Colombia’s long-standing security challenges.

“The United States plays a crucial role in combating crime and narco-terrorism and in finally freeing Colombia from so much pain and violence,” he said.

The candidate also highlighted what he described as shared values with Trump, including support for democracy, freedom, and the rule of law.

Petro criticizes US intervention

Trump’s endorsement quickly drew criticism from Colombian President Gustavo Petro, whose relationship with the U.S. leader has often been strained.

Petro, Colombia’s first left-wing president, responded on social media Tuesday night, criticizing Trump’s public support for de la Espriella. While details of Petro’s comments were not immediately available, the intervention is likely to intensify debate over foreign influence in the election campaign.

The runoff will be closely watched across the region as voters choose between two sharply contrasting political visions.

De la Espriella has campaigned on a platform centered on security, stronger ties with the United States, and conservative policies. Cepeda, a veteran human rights advocate and longtime senator, has emphasized social reforms and continuity with parts of Petro’s political agenda.

The election outcome could have significant implications for Colombia’s domestic policies, its approach to security and drug trafficking, and its relationship with Washington, one of Bogotá’s most important international partners.

With polls indicating a tight race, both candidates are expected to intensify campaigning in the coming weeks as they seek to win over undecided voters before the decisive runoff vote.

(Source: Reuters)

A

rms sales by the United States to Taiwan have once again become a focal point of tensions between Washington and Beijing following reports that President Donald Trump has delayed signing a $14 billion weapons package approved by Congress.

The issue gained renewed attention after Trump’s summit with Chinese President Xi Jinping earlier this month, during which Xi reportedly warned that Taiwan remains the most sensitive issue in relations between the two powers and could become “a very dangerous situation” if mishandled.

While Trump described the proposed arms package as a valuable negotiating tool in discussions with Beijing, Taiwan’s Defense Ministry said it had not received any official notification of a delay in military sales.

The debate highlights a long-running dispute that has shaped U.S.-China relations for decades and remains central to regional security in East Asia.

Taiwan relations act underpins US support

The foundation of U.S. military support for Taiwan dates back to 1979, when President Jimmy Carter switched diplomatic recognition from Taiwan to the People’s Republic of China.

The move ended Washington’s formal defense treaty with Taiwan, officially known as the Republic of China. In response, Congress passed the Taiwan Relations Act, requiring the United States to provide Taiwan with defensive weapons and maintain the island’s capacity for self-defense.

Beijing views Taiwan as part of China and has never ruled out using force to bring the island under its control. Chinese leaders strongly oppose U.S. arms sales, arguing that they interfere in China’s internal affairs and encourage Taiwanese resistance to reunification.

The United States, while recognizing Beijing diplomatically, maintains unofficial relations with Taiwan and continues to supply military equipment under the Taiwan Relations Act.

American officials have repeatedly stated that U.S. policy remains unchanged despite tensions over recent weapons sales.

Delays and backlogs shape Taiwan’s defense planning

Since 1979, Taiwan has purchased tens of billions of dollars in American military equipment, including fighter jets, warships, tanks, missile systems, and advanced defense technology.

However, many purchases have taken years to arrive.

Analysts estimate Taiwan currently faces a weapons backlog approaching $30 billion. Some major systems approved years ago remain under production or awaiting delivery.

For example, 108 M1 Abrams tanks ordered in 2019 required nearly seven years to arrive. Meanwhile, advanced F-16V Fighting Falcon jets approved the same year are still undergoing production and testing.

Taiwan’s Defense Ministry says that among 23 major U.S. weapons packages approved over the past decade, only five have been fully delivered, while most remain in production.

The latest $14 billion package reportedly includes air-defense systems such as Patriot Missile System batteries and counter-drone capabilities. Analysts note that even if approved immediately, production timelines mean some systems would not reach Taiwan until 2028 or later.

The delays have intensified debate within Taiwan over whether it should continue purchasing expensive conventional platforms or focus more heavily on a so-called “porcupine strategy” emphasizing domestically produced drones, anti-ship missiles, and other asymmetric weapons designed to deter a larger Chinese military.

Why China opposes the sales

For Beijing, U.S. arms sales to Taiwan represent more than a military issue. Chinese leaders see them as political support for a government they consider part of Chinese territory.

China argues that American weapons transfers violate past understandings between the two countries and undermine efforts toward eventual reunification.

Washington rejects that interpretation, maintaining that it has never agreed to end arms sales to Taiwan and that decisions regarding military support are made independently under U.S. law.

As strategic competition between the United States and China intensifies, Taiwan remains at the center of one of the world’s most sensitive geopolitical disputes. While military sales are intended to strengthen the island’s defenses, they continue to provoke strong objections from Beijing and remain a recurring source of friction between the two superpowers.

(Source: CNN)

T

he late Nelson Mandela said, “work to support courage where there is fear, foster agreement where there is conflict, and inspire hope where there is despair”. This may well apply to Pakistan’s position during a critical period of the escalating conflict between the United States and Iran. Many parties were unable to, or perhaps remained either reluctant or hesitant to get involved amidst waves of retaliatory strikes, a political and media discourse that had reached a new peak since the Iranian Revolution of 1979, and a division in stances regarding the ongoing conflict.

However, one thing there was absolute agreement on the necessity of reaching a détente that would lead to the opening of the Strait of Hormuz to international navigation, thus restoring global economic activity, and ensuring the continued export of energy supply to consumers, including Pakistan, which considers the stability of the Strait and the region crucial to its economy and maritime security. The Pakistani initiative came at a pivotal moment, acting as a decisive factor in achieving a ceasefire, in an attempt to reach a consensus between both parties to end the conflict and quash its repercussions.

The initiative raised numerous questions about Islamabad’s role, which some might interpret as exploiting a political vacuum that other parties were unable to fill, adding to Pakistan’s regional influence, especially in view of the escalating tensions. There are also ongoing concerns about the continuation of the crisis, and its repercussions at the regional and international levels, as well as its economic and security implications for Pakistan itself. There is a conviction that an early effort at mediation allows more room for negotiation, and that the longer the initiative is delayed, the less willing the conflicting parties will be to accept a compromise. Therefore, Pakistan’s involvement at this juncture is commendable, even if it is limited, as it occurred during a period of transition, not after the situation had already stabilized.

Pakistan’s initiative to find a solution to the crisis between the United States and Iran may be viewed through the lens of political, economic, and geographical factors. The country has good relations with both sides, and is utilizing other channels of communication, such as with Oman, Qatar, Saudi Arabia, and Türkiye, to advance its mediation efforts. It is worth noting that regional stability, and internal stability in Iran itself is important to Pakistan, which shares a long border of 900 km with its western neighbor. Islamabad fears the spillover of any political turmoil in Iran that may have sectarian and security repercussions for Pakistan, not to mention other repercussions on the energy markets, and on regional and global trade. Thus, Islamabad saw an opportunity to draw attention to itself as an important regional player and a diplomatic power capable of playing a prominent role during crises, which enhances its political standing and its international relations. Despite all this, the Pakistani initiative has raised many questions and perhaps drawn skepticism about Pakistan’s intentions and its role at this particular time.

Pakistan and the parties to the conflict

The relationship between Pakistan and the Western powers, particularly the United States, has always been complex and volatile. It can be described as a pragmatic partnership rather than an alliance based on mutual trust. This relationship has witnessed periods of intense rapprochement but also periods of sharp tension, depending on the changing circumstances and strategic interests of each party. During the Cold War, the relationship was very close, allowing Pakistan to join US-backed alliances such as the Baghdad Pact and the Southeast Asia Treaty Organization (SEATO), in exchange for military and financial aid. This cooperation reached its peak during the 1979 Soviet invasion of Afghanistan, when Pakistan played a prominent role in supporting the ‘Mujahideen’, while receiving direct assistance from the United States. However, this harmony did not last long.

After the end of the Cold War in 1991, the relationship cooled off, especially with the emergence of Pakistan’s nuclear program, which led the United States to impose sanctions. The attacks of September 11, however, revived Pakistan’s ties with the United States, through the logistical and intelligence support provided by Islamabad to Washington, despite lingering suspicions about Pakistan’s duplicity in its dealings with the West. Its unstable surroundings worried western analysts, and in recent years the United States’ suspicions of Pakistan’s intentions have increased, especially following Islamabad’s growing rapprochement with Beijing through a series of economic projects and defense partnerships, particularly in military manufacturing and technology transfer. Consequently, the relationship between the two sides is determined by regional and international power balances, without any guarantee of a lasting political and strategic convergence.

Conversely, since its separation from India in 1947, Islamabad has maintained a relatively good relationship with Tehran, recognizing its direct proximity to its western neighbor, and understanding that any regional conflict in which Iran is directly involved will immediately affect Pakistan. This would have several repercussions, including disruptions to the transport of natural resources such as oil and gas, the potential for refugee flows, and the possibility of an escalation in sectarian tensions within Pakistan, given that approximately 20% of the population is Shia, who could potentially ignite an internal crisis. Therefore, in any escalation between Iran and the United States, such as the one that occurred following the assassination of Qassem Soleimani, commander of the Quds Force in 2020, Islamabad has been quick to intervene diplomatically, emphasizing the need to respect the sovereignty of states and renounce the use of force.

Pakistan has also stressed that it will not allow its territory to be used in any conflict against any neighboring country, especially since Islamabad intends to maintain good relations with Tehran, Washington, Riyadh, and other regional actors. Meanwhile, tensions occasionally surface between Iran and its Gulf neighbors, albeit with some noticeable variations. Consequently, Islamabad knows it will have to maintain the delicate balance that grants it a regional role, and presents itself to the world as an influential state capable of resolving conflicts, thus giving it greater diplomatic weight.

Current regional events have cast a shadow over the political and economic landscape, given the difficulty of reaching a formula for consensus between the United States and Iran. This has prompted Islamabad to intervene and adopt a mediation initiative, hosting direct negotiations at the highest level. This step has been described by many as the result of precise political and security calculations that take into consideration the repercussions of escalation in the region and its impact on Iran’s neighbors, and on the region as a whole.

The Pakistani initiative did not come about as a reaction at a particularly sensitive moment, but rather as a direct protection of its internal security and its economy, which cannot withstand the devastating effects of being drawn into regional conflicts, which in itself seems a justifiable reason for such action. However, the timing of Islamabad’s entry as a mediator has raised many questions, at a time when countries such as Oman, Qatar, Saudi Arabia, Türkiye, and Egypt were themselves seeking to bridge the divide and reduce tension. Therefore, what was it that prompted Islamabad this time to adopt the mediation role that Oman has played between the United States and Iran for many decades?

A regional role or an opportunistic approach?

There may be several interpretations of Pakistan’s decision to take a mediation role at this critical juncture, involving two parties whose relationship has been marked by open hostility since the 1979 Iranian Revolution. Some believe that Islamabad’s move stems from a desire to ensure regional stability, which is essential for the smooth flow of maritime traffic, the uninterrupted flow of energy resources to consumers, and the avoidance of internal tensions in Iran. This is to say nothing of the potential influx of refugees and border tensions, as well as the economic shocks associated with disruption to energy prices, trade, shipping, and insurance. Therefore, according to this argument, Islamabad has adopted a mediating stance to prevent escalation and seek diplomatic solutions to the crisis, given that a protracted conflict threatens both regional and internal Pakistani security. Thus, the mediation role reflects a desire to prevent the expansion of the regional war, an attempt to de-escalate tensions between competing powers, and a commitment to maintaining a strategic balance between all parties to the conflict, without siding with any of them. The initiative embodies Pakistani political traditions of keeping channels of communication open with all competing powers.

On the contrary, some believe Pakistan’s move is driven by opportunistic motives. Perhaps, Islamabad saw an opportunity to regain its diminishing standing and bolster its international presence, at a time when it is grappling with economic difficulties and political instability. Others view this as less credible, arguing that it is seeking to improve its image abroad, particularly in the United States, and strengthen its ties with the Gulf Cooperation Council (GCC) states. Such a move would grant it diplomatic prestige and the ability to present itself as an indispensable regional power.

This comes within the framework of repositioning itself after years of relative isolation and attempting to balance its relationships with regional actors like Iran and Saudi Arabia, especially given the Joint Defense Agreement (JDA) with Riyadh, which places Islamabad in a precarious position, particularly in the event of a potential clash between Iran and Saudi Arabia. Furthermore, it seeks to maintain balanced relations with other regional and international players such as Türkiye and the United States, a position which could lead to economic gain, broader security cooperation, defense-industry partnerships, and debt relief. With the disruption to energy supplies, Islamabad has been forced to implement austerity measures, shortening school days and working hours to conserve energy.

Ensuring a de-escalation of the regional situation would in fact bring significant benefits to Pakistan. These include guaranteeing access to Iranian oil at affordable prices once sanctions are lifted, and the completion of the long-awaited Iran-Pakistan gas pipeline. By avoiding further escalation, Islamabad would also secure a safe trade corridor to Central Asia via Iran, as evidenced by the shipment of the first batch of Pakistani frozen meat to Uzbekistan in April 2026. This is particularly important given that trade routes through Torkham and Chaman, key strategic border crossings and vital trade arteries from Afghanistan to Central Asia, remain closed due to ongoing strained relations between Islamabad and Kabul. Furthermore, internal stability in Iran would prevent Indian attempts to infiltrate Pakistan’s Baluchistan via the Chabahar project, thus thwarting any encirclement efforts by New Delhi. These benefits would also prevent India from attempting to extend its influence through Iran into Pakistani Baluchistan.

According to an extreme view, still others believe that Islamabad may be complicit in a conspiracy against Tehran, given the actions of the United States, Pakistan’s historical ally, and Iran, its ideological antithesis and the primary rival of Saudi Arabia, a key Pakistani ally in the region. Maintaining complete neutrality in these circumstances would therefore be extremely difficult. This view is supported by the mobilization of forces and the stringent sentiment that the United States continued to express while negotiations were underway.

US and Pakistani forces in Saudi Arabia

This included the entry of two American destroyers into Saudi waters in the Arabian Gulf and the arrival of Pakistani forces at King Abdulaziz Air Base in the Eastern Province, accompanied by fighter jets and various weapons. Some interpreted this as an activation of the JDA between the two countries, an agreement considered a strategic buffer for Saudi Arabia and an additional layer of deterrence. It is worth noting that there were also reports that Pakistan simultaneously hosted some Iranian aircraft at Nur Khan Air Base, to protect them from any American military strikes. These included RC-130 intelligence and reconnaissance aircraft and C-130 transport aircraft. Conflicting views call for a deep reassessment of Pakistan’s actual role in the negotiations, which means that Islamabad’s initiative appeared to be not so much altruistic as a geostrategic maneuver to achieve substantial gains under the guise of ensuring the region’s security.

There remains the factor of China, which strongly supports the negotiating track adopted by Pakistan, preferring a diplomatic solution to escalation. China supports Iran, not only because the latter is a key partner in trade and energy, but also because it is a reliable strategic ally in any future confrontation with the United States. Beijing does not want any disruption to shipping lanes, and at the same time seeks a balanced relationship with Washington, as was evident during US President Donald Trump’s visit to China on May 13, 2026. Therefore, it prefers to play a supporting role in negotiations rather than leading them. Reports indicate that Beijing pressured Tehran to accept de-escalation and enter negotiations, exploiting Iran’s need to export its oil to the Chinese market.

In short, Islamabad’s hosting of negotiations between two parties that are extremely important to its national security involves several possible motives, including that this is at the request of the United States, which is trying to end the crisis with the least number of losses and concurrently to save face. It may also be driven by other parties such as Saudi Arabia, which is keen on the security of the region at a time when it is accelerating towards achieving its economic ambitions that require a degree of regional stability.

Despite the regional competition with Iran, Riyadh sees the stability and prosperity of its northern neighbor as a greater opportunity for rapprochement, at a time when its relationship with the United Arab Emirates (UAE) is shrouded in much ambiguity. Thus, the outcomes of Pakistan’s role and what the conflict will lead to is likely to indicate much of what the region will face, which also means that the true implications behind the role that Pakistan is playing may become clear later, for Pakistan itself, for the two parties to the conflict, and for the entire region.

I

n recent years, Türkiye’s presence in Somalia has deepened significantly. Whilst energy and space initiatives feature prominently, the foundation of this process lies in security, infrastructure and institutional capacity-building. In particular, the multi-layered cooperation model established after 2011 has laid the groundwork for the steps being taken in the energy sector today.

Türkiye’s commencement of oil exploration activities in Somalia may, at first glance, appear to be a purely technical energy initiative. However, this development is part of a much broader strategic framework. The operations currently being carried out by the deep-sea drilling vessel Çağrı Bey off the coast of Somalia are situated at the intersection of security, the economy, state capacity and geopolitical competition. Therefore, assessing the matter solely under the heading of energy exploration amounts to failing to grasp the bigger picture.

The strategic significance of Çağrı Bey

When evaluated within this broader framework, Türkiye’s oil exploration activities in Somalia represent a new phase. The work to be carried out by the domestically built and operated drilling vessel Çağrı Bey in the Curad-1 field goes far beyond a mere technical operation. The drilling, capable of reaching a depth of approximately 7,500 metres, is a process requiring advanced technology and high engineering capacity. Expected to last 288 days, this activity is considered a long-term strategic investment.

One of the most significant aspects of this initiative is the development of Somalia’s capacity to discover and manage its own resources. The potential discovery of an energy reserve could be a turning point for the Somali economy. This would not only mean an increase in revenue but also the strengthening of the state’s financial capacity and the acceleration of development processes.

From Türkiye’s perspective, this step represents the extension of its energy supply security strategy to an overseas dimension. Expanding into new fields in line with Türkiye’s objective of reducing its dependence on energy imports will contribute to it assuming a more active role in the global energy equation. Türkiye’s commencement of oil exploration in Somalia is not merely a one-dimensional energy investment. This development constitutes a multi-layered strategic move where security, economy, sovereignty and geopolitics are intertwined. The steps being taken in Somalia today will not only yield short-term results but will also shape the country’s economic and political transformation in the long term. Similarly, from Türkiye’s perspective, this process is a significant indicator of its transformation from a country that consumes energy to an active player in the energy sector.

If this process is successfully concluded, Somalia will cease to be a country associated with crises and will emerge as a new ‘safe haven’ and economic actor at both regional and global levels. Türkiye, as one of the key partners in this transformation, has the potential to further strengthen its strategic position in Africa.

From security to the economy: How did the groundwork come about?

For many years, the most fundamental issue in Somalia has been security. The weakness of state capacity and the influence of terrorist organisations have severely limited the development of economic activity. Türkiye’s approach in this regard has evolved from humanitarian aid to development assistance, and subsequently continued with military training tailored to local needs. However, this approach has not been limited to a purely military perspective but has aimed to build a more comprehensive security architecture.

At the current stage, Türkiye’s contributions are playing a decisive role in enhancing Somalia’s counter-terrorism capabilities. Reconnaissance and surveillance support provided by unmanned aerial vehicles, the operational contribution of air assets, and military training programmes have shifted the balance on the ground in favour of the Somali state. This has had both a military and a psychological impact. The narrowing of terrorist organisations’ operational space and the reduction in their attack capacity have contributed to the re-establishment of state authority.

The relative improvement in security has also paved the way for economic activities and investment. The rapid urbanization observed in Mogadishu in recent years, along with increased construction activities and private sector investment, are concrete indicators of this transformation. The active role of Turkish companies in infrastructure and superstructure projects serves as a significant lever in the revitalisation of the Somali economy.

One of Somalia’s greatest untapped potentials lies in its marine resources, which have remained underutilised for many years. From a blue economy perspective, fisheries, maritime transport and energy resources present critical opportunities for Somalia. Within the framework of the partnerships developed with Türkiye, fishing activities to be carried out in Somali territorial waters represent a significant step towards harnessing this potential. This process will not only generate economic revenue but will also strengthen Somalia’s control over its maritime zones.

In parallel, the process of building up Somalia’s naval forces is also noteworthy. These efforts, carried out with Türkiye’s support, are of critical importance in combating piracy and ensuring maritime security. Maritime security, whilst a military matter, is also decisive for the sustainability of trade and economic activities.

Furthermore, the operation of port and airport facilities in Somalia by Turkish companies constitutes a significant aspect of Türkiye’s economic presence in the country. However, as the Somali economy grows, the existing infrastructure is beginning to prove inadequate. This situation brings new port and airport projects to the fore. Another notable development, in terms of accelerating trade and reducing costs, is the increasing use of the Somali flag on commercial vessels. This step has the potential to significantly shorten trade transit times. This will not only accelerate Somalia’s integration into global trade networks but also enhance its competitive strength.

Geopolitical dimension: A new balance in a critical geography

Somalia’s geopolitical position makes these developments all the more significant. The Gulf of Aden, the Bab el-Mandeb Strait and the Red Sea route constitute one of the most critical chokepoints for global trade and energy transportation. Any instability in this region has repercussions on a global scale.

Recent Houthi attacks in Yemen and regional tensions have made the security of the Gulf of Aden, the Bab el-Mandeb Strait and the Red Sea route more fragile. Furthermore, the possibility of Israel unilaterally recognizing the Somaliland administration, or engaging in political contacts in this direction, is making the issue of Somalia’s sovereignty and territorial integrity even more sensitive. For such a step would imply that Israel is jeopardizing Somalia’s national integrity in pursuit of its own security and geopolitical interests in the Gulf of Aden and the Red Sea.

This situation could have serious consequences not only for Somalia’s domestic politics but also in terms of the emergence of a new crisis of legitimacy and sovereignty in the Horn of Africa. Furthermore, there is growing discussion that such a scenario could increase the likelihood of the Houthis in Yemen targeting the Somaliland administration or locations in the region believed to be linked to Israel. In this context, ensuring Somalia’s stability and maritime security holds national, regional and global significance. The ability of vessels flying the Somali flag to navigate this high-risk region more effectively is one of the factors enhancing the country’s geopolitical value.

Alongside these developments, the fact that vessels flying the Somali flag will now be able to sail across the globe represents a significant step forward. This situation holds, above all, symbolic and strategic importance for Somalia’s international representation. Furthermore, the Federal Government of Somalia aims to establish the Somali flag as one of the region’s trusted flags. Particularly at a time when threats in maritime chokepoints are on the rise, Somalia’s friendly relations in the region and its balanced foreign policy could transform the Somali flag into a key advantage in potential future crises.

Furthermore, the enactment of the cabotage law in Somalia has further strengthened this process. Under this law, vessels not flying the Somali flag will be restricted from conducting commercial activities in Somali territorial waters; such vessels will only be permitted to utilize the right of transit passage. This represents an extremely important step in strengthening Somalia’s sovereignty over its maritime zones.

(Originally published in Turkish by Kriter)

A

fter the end of the Cold War, the United States began to dominate the world as the sole superpower. Over the past 35 years, the Americans, maintaining this singularity, have tried to punish their enemies and the countries they declared as enemies by invading them. For this purpose, they occupied Afghanistan and Iraq, the latter having no connection to the 9/11 attacks while the former’s sheltering of Bin Laden did not require invasion of the whole country. Allies also did not withhold their support from the U.S. in these occupations.

Americans, together with Israel, who consider it their duty to attack countries they have labeled as enemies and try to legitimize it with excuses such as democracy and human rights, most recently attacked Iran on February 28. More than two months have passed but the Israel‑U.S. duo, which killed all Iranian leaders on the first day with Iran’s initial naivete, still have not achieved their goals. No regime has collapsed, no country has been occupied, Iran’s nuclear program has not been destroyed, and the Iranian army has not been neutralized. Moreover, Iran’s closure of the Strait of Hormuz has plunged the whole world into an economic crisis.

In short, Iran is a big bite for the U.S. and Israel, and they could not swallow it. Although Trump repeatedly proclaimed victories, there is no real victory. If the allies had supported America, the outcome might have been different, but the allies declared they would not do anything for the U.S. by refusing to enter a war that the U.S. itself does not even have. Moreover, the U.S. was planning to occupy Greenland, NATO territory, just a few months ago.

Super‑power status open to debate?

The United States’ failure naturally opens its super‑power status to debate. Five years ago, while writing an academic paper on whether the U.S. is still a superpower, I observed that despite being the world’s most powerful country in many areas, the U.S. does not possess the power to control the entire world. For example, 24 % of global GDP belongs to the United States. With that share, it is impossible to dominate the remaining 76 % of the world. Militarily, the U.S. is the strongest country, but even in this field the days of policing the world are far behind.

However, while writing the paper I concluded that the U.S. remains a superpower thanks to its allies. Especially because many European states, Japan, South Korea, Canada, and numerous European allies accept U.S. leadership, America’s super‑power status continued.

The tide has turned, and now the United States is led by Donald Trump, a leader whose actions are uncertain even in his own country, whose statecraft is debated, and who does not hesitate to target his own allies. In the Iran war, Trump entered the conflict without any ally’s approval, simply because Israel wanted it. Even though he eyed Greenland and threatened to withdraw from NATO, he still expected support from allies. Yet his allies, not being as reckless, did not join a war that the U.S. itself had not started, leaving the U.S. (and Israel) alone.

Israel is an ally of the US more than Europe

Today, Israel is the United States’ closest ally. You will not see Israel suffering the insults Trump directed at Europeans. Conversely, Israel’s closest ally is not the United States. In other words, Israel will not go to war for the U.S.; they see the U.S. as a country whose resources will be exploited. Unfortunately, this is the painful truth many know but dare not say about U.S.–Israel relations.

As a result, the United States is more alone than ever, which provides a good opportunity to test its power. The Iran war became an example serving exactly this purpose. It is evident that the U.S. cannot maintain hegemony alone. Perhaps it could win a one‑on‑one war against Iran or another country, but the price would be heavy. Therefore, if it does not engage in an existential war, every war it joins will take pieces from its existence and further weaken it.

It is also necessary to emphasize the clumsiness of the American army. Americans are truly ahead in internet technology, which helps keep their economy strong. However, they struggle to keep up with changes in the weapons industry. While Iran managed to push away massive aircraft carriers with a few thousand‑dollar kamikaze drones and, according to claims, shot down an F‑35 with a lower‑technology air‑defense system, battlefields are filling with smaller, more effective weapons, yet the U.S. still relies on large‑scale armaments. Consequently, some of its assets have been destroyed or forced to withdraw from the region. If this trend continues, the United States’ biggest asset will be its nuclear weapons, whose production becomes easier over time. Thus, American hegemony in weaponry is rapidly declining.

Moreover, as long as the Trump administration governs, it is unlikely that Washington will abandon its current policies for a more rational foreign policy. Since American voters elected Trump, Americans themselves need to do a reckoning for their country and elect leaders who truly believe in the “America First” motto and think more sensibly. Otherwise, even if they do not realize it, their country is sliding downhill rapidly.

If this trend continues, the American era will end much earlier. Assuming the U.S. emerged as a superpower in 1945, its hegemony would not even last a hundred years. No hegemon lends its power to another country for free, alienates its friends, conducts arbitrary invasions, or hands state power to leaders who are blackmailed, have a dark past, and are incompetent.

I

ran’s Supreme Leader Mojtaba Khamenei has ordered that the country’s stockpile of near-weapons-grade uranium must remain inside Iran, according to two senior Iranian sources, hardening Tehran’s position during sensitive peace talks with the United States.

The directive directly challenges one of Washington’s key demands in negotiations aimed at ending the U.S.-Israeli war on Iran. American officials, backed by Israel, have insisted that Iran’s highly enriched uranium be removed from the country as part of any long-term agreement.

The dispute over the uranium stockpile has emerged as one of the central obstacles in efforts to secure a broader peace arrangement following months of regional conflict and a fragile ceasefire now holding between the sides.

President Donald Trump said this week that the United States would not allow Iran to retain the material.

“We will get it. We don’t need it, we don’t want it. We’ll probably destroy it after we get it, but we’re not going to let them have it,” Trump told reporters at the White House.

Israeli officials have also told Reuters that Trump assured Israel the uranium stockpile would ultimately be transferred out of Iran and that any peace agreement must include such a provision.

Western governments have long accused Iran of pursuing nuclear weapons capability, particularly after Tehran enriched uranium to 60% purity — far above civilian requirements and closer to the 90% level generally associated with weapons-grade material. Iran has consistently denied seeking nuclear weapons.

Fragile ceasefire

According to the Iranian sources, the Supreme Leader’s order reflects deep concerns within Iran’s leadership that surrendering the uranium stockpile would weaken the country’s deterrence and leave it vulnerable to future attacks by the United States or Israel.

“The Supreme Leader’s directive, and the consensus within the establishment, is that the stockpile of enriched uranium should not leave the country,” one source said.

Iranian officials reportedly fear that the current pause in hostilities could merely be a tactical maneuver before renewed military action. A shaky ceasefire has been in place since fighting erupted after U.S.-Israeli strikes on Iranian targets on February 28, followed by Iranian attacks on Gulf states hosting American military bases and clashes involving Hezbollah in Lebanon.

Negotiations have also been complicated by a U.S. blockade of Iranian ports and Tehran’s control over the Strait of Hormuz, a crucial route for global oil shipments. Pakistan has been mediating talks between the parties, though no major breakthrough has yet been announced.

Iran’s senior peace negotiator, Mohammad Baqer Qalibaf, said Wednesday that “obvious and hidden moves by the enemy” suggested Washington was preparing additional attacks.

Trump, meanwhile, warned that the United States remained prepared to strike Tehran again if Iran refused to accept a peace deal, although he indicated Washington might wait “a few days” before making further decisions.

Compromise over uranium stockpile?

Despite the hardened rhetoric, Iranian officials suggested that possible compromises remain under discussion.

One Iranian source said Tehran may consider reducing the sensitivity of its uranium stockpile by diluting part of it under the supervision of the International Atomic Energy Agency rather than sending it abroad.

“There are solutions like diluting the stockpile under the supervision of the International Atomic Energy Agency,” the source said.

Before the war, Iran had reportedly signaled willingness to export roughly half of its uranium enriched to 60%, but that position shifted after repeated threats from Trump of possible military action.

Israeli Prime Minister Benjamin Netanyahu has maintained that the conflict cannot fully end unless Iran’s enriched uranium is removed, Tehran halts support for regional proxy groups, and its ballistic missile program is dismantled.

The IAEA estimated before the conflict that Iran possessed approximately 440 kilograms of uranium enriched to 60%. It remains unclear how much survived subsequent strikes on Iranian nuclear facilities. IAEA Director General Rafael Grossisaid earlier this year that much of the remaining stockpile was believed to be stored in underground facilities near Isfahan and Natanz.

Iran argues that part of its highly enriched uranium is intended for civilian purposes, including medical research and a Tehran-based reactor that operates using uranium enriched to around 20%.

As negotiations continue, the future of Iran’s uranium stockpile appears set to remain one of the most contentious issues standing between a lasting ceasefire and renewed conflict in the Middle East.

(Source: Reuters)

S

ince almost the very beginning of the attacks carried out by the US and Israel against Iran, the Strait of Hormuz has been one of the most significant factors influencing the course of the war. The Strait of Hormuz also fundamentally affects whether the current peace talks stall or progress. The most significant reason for this is that economic and commercial considerations have come to the fore amongst the global repercussions of armed conflicts today.

Since passage through international straits, particularly the Strait of Hormuz, is critical, the regime governing passage has become a significant concern. In this context, questions have arisen about whether any state has the right to close an international strait and whether restricting, closing, or imposing a blockade on international straits during wartime is legally permissible.

Given the illegality of many actions in the US/Israel-Iran conflict, it would be beneficial to clarify the legal principles governing transit through the Strait of Hormuz, a vital international maritime transport route, during wartime.

The importance of international straits and channels

Apart from the Strait of Hormuz, there are other straits and channels around the world that are of central importance to international maritime transport. The Strait of Gibraltar, the Turkish Straits, and the Straits of Singapore and Malacca are among the most important of these. The Strait of Gibraltar is the only maritime passageway connecting the Mediterranean Sea to the open ocean. The Straits of Singapore and Malacca are maritime passages between the Indian Ocean and the South China Sea in Southeast Asia. Stretching between Singapore and the Riau Islands of Indonesia, these straits are among the busiest waterways in global maritime trade. Approximately 40 percent of the world’s merchant vessels pass through them. They form the route for most oil and raw material shipments destined for Asia’s industrial giants, such as China, Japan, and South Korea.

The Turkish Straits system, comprising the Straits of Istanbul and Çanakkale and the Sea of Marmara, is the only waterway connecting the Black Sea to the Mediterranean Sea. The Turkish Straits are of vital importance to the economies and military security of countries bordering the Black Sea. Currently, over 50,000 ships, including more than 10,000 tankers, pass through the Turkish Straits each year, making them crucial for the transit of food, oil, natural gas, and commercial goods.

Meanwhile, the Strait of Hormuz is one of the world’s most important oil transit points. This strait is the sole route connecting Iraq, Kuwait, Qatar, and Bahrain to the rest of the world, and it is also the only functional maritime transport route for oil exports from Iran, Saudi Arabia, and the United Arab Emirates (UAE). In 2024 and 2025, more than a quarter of total global seaborne oil trade and approximately one-fifth of global oil and petroleum product consumption passed through the Strait of Hormuz. Furthermore, approximately one-fifth of the global liquefied natural gas (LNG) trade passed through the strait in 2024, primarily from Qatar. Consequently, even temporarily halting the passage of oil or LNG tankers through the strait is likely to increase global energy prices, shipping costs, and lead to significant supply delays.

Man-made waterways that connect seas are known as sea canals. The Panama and Suez Canals are the most prominent examples. The Panama Canal was constructed under the 1903 Washington Treaty between Panama and the United States and completed in 1914. Governed by the “Treaty on Permanent Neutrality and the Operation of the Panama Canal,” signed by the United States and Panama in 1977, the Panama Canal provides a direct passage between the Atlantic and Pacific Oceans. Meanwhile, the Suez Canal is an artificial waterway that is approximately 190 kilometers long and connects the Mediterranean Sea with the Red Sea. Transit through the canal is regulated by the Istanbul Convention, a multilateral treaty signed in 1888, which permits all ships, regardless of nationality or purpose, to pass through. The canal handles approximately 10–15 percent of global maritime trade. It serves as a critical transit point for the transport of oil, natural gas, and container freight in particular.

Transit through international straits during armed conflicts

According to international law, the right to transit through international straits during peacetime is considered a “right of innocent passage.” However, this right is not absolute, meaning the coastal state may suspend transit if it becomes harmful. This suspension does not essentially amount to a total ban on passage; rather, it is an exceptional power that the coastal state may exercise when the passage of a specific vessel or vessels becomes “detrimental” to the coastal state’s peace, security, or order. In situations where transit has become entirely harmful, exceptional circumstances may arise in which transit may be suspended entirely, provided that the suspension is not indefinite and is for reasons such as health inspections.

Unlike the right of innocent passage, the “right of transit passage” through international straits is an inalienable right recognized by the 1982 United Nations Convention on the Law of the Sea, to which 172 states are currently parties. According to Article 38 of the Convention, all ships and aircraft have the right of transit passage, which shall not be impeded.

However, it can be said that the rules governing the right of passage through international straits change significantly during wartime. In the event of war, two situations may arise. The first situation occurs when one or more states bordering the strait is involved in the war. These straits may be characterized as “international straits involved in the war.” The second scenario is when none of the states bordering the strait are involved in the war. These straits are referred to as “neutral,” or non-belligerent, straits.

International straits involved in a war that do not consist entirely of a single state’s territorial waters, where a route passes through the high seas or exclusive economic zone, cannot be exercised by the coastal states beyond their own territorial waters.

If an international strait involved in a war consists entirely of territorial waters, then those waters also form part of the general theater of hostilities. This means that the entire strait becomes a theater of war. Subject to the relevant provisions of the laws of war, enemy ships and aircraft in these straits may be attacked, and enemy and neutral merchant ships may be stopped and seized. The coastal state has the right to deny passage to all enemy ships and aircraft.

Neutral ships

However, these straits cannot be closed to ships belonging to states that are not parties to the conflict, i.e., neutral ships. There is a prevailing view that peaceful shipping traffic should be allowed to pass through the straits with minimal disruption. While states bordering an international strait may be inclined to close it, even to peaceful shipping, if they are parties to an international armed conflict, completely closing international straits, particularly by using sea mines, would not be lawful. This was stated in the International Court of Justice’s judgment on April 9, 1949, in the Corfu Channel case. Neutral warships and merchant vessels must not be deprived of their right of passage, or their inalienable right of innocent passage, through international straits belonging to parties to an international armed conflict.

As for neutral international straits not involved in the war, transit generally takes place under peacetime conditions. According to Article 38(2) of the United Nations Convention on the Law of the Sea, a “right of transit passage” exists through neutral straits, which must not be impeded. Transit must be continuous and expeditious for the purpose of passing through the strait. As in peacetime, warships of belligerent states in transit must proceed without delay in accordance with designated sea lanes and traffic separation schemes. Belligerent warships and military aircraft transiting a neutral international strait may take all necessary measures to defend themselves.

In neutral international straits, the right of transit passage does not apply if the straits do not coincide entirely with the coastal state’s territorial waters. In these cases, vessels and aircraft of all nations enjoy freedom of navigation and overflight in the remaining corridor, even if an exclusive economic zone has been declared. In parts of the strait that are part of a coastal state’s territorial waters, ships and aircraft only have a suspensible right of innocent passage.

C

hinese President Xi Jinping is set to welcome Russian President Vladimir Putin to Beijing just days after hosting U.S. President Donald Trump, highlighting China’s effort to position itself at the center of global diplomacy amid escalating international conflicts.

Putin’s arrival for a state visit underscores the increasingly close relationship between China and Russia, as both countries seek to challenge U.S. global influence while navigating growing instability caused by the wars in Iran and Ukraine.

The Kremlin said Putin and Xi are expected to discuss energy cooperation, the Middle East conflict, the war in Ukraine and their shared vision of a “multipolar world” less dominated by Washington and Western alliances.

The visit will be Putin’s 25th trip to China during his presidency and reflects the deepening partnership between the two powers, built around expanding trade ties, military coordination and shared opposition to U.S. policies.

China projects itself as alternative global power

The back-to-back visits by Trump and Putin are being portrayed by Chinese state media as evidence that Beijing has become a central player in world affairs.

Chinese outlets described the China-Russia relationship as “unshakeable” despite growing geopolitical tensions, while emphasizing Beijing’s role as what officials call a more stable and responsible global actor.

Analysts say Xi is carefully balancing relations with both Washington and Moscow at a time when the United States is deeply involved in the Iran conflict and Russia remains isolated by Western sanctions over the Ukraine war.

Trump’s visit last week focused heavily on the war with Iran and efforts to reopen the Strait of Hormuz. The White House said Trump and Xi agreed that Iran should not obtain nuclear weapons and supported restoring maritime traffic through the strait.

But Beijing has also maintained strong ties with Tehran and Moscow, complicating its position.

China remains Iran’s largest oil customer and has resisted U.S. pressure to cut economic ties with Tehran. Meanwhile, Russia has reportedly provided intelligence support to Iran during the conflict, according to CNN.

Energy cooperation central to Beijing-Moscow ties

Energy is expected to be one of the key issues discussed during the Xi-Putin meeting.

China has become Russia’s largest energy customer since Western sanctions were imposed after Moscow’s invasion of Ukraine. Chinese companies have increased purchases of discounted Russian oil, helping support Russia’s economy and war effort.

The leaders are also expected to discuss the proposed Power of Siberia 2 gas pipeline, a long-delayed project that would significantly expand Russian natural gas exports to China.

Analysts say instability in the Middle East and uncertainty around Iranian oil supplies may increase Beijing’s interest in securing more long-term Russian energy imports.

The growing economic relationship, however, has also made Russia increasingly dependent on China, particularly in technology, trade and access to international markets.

Iran conflict creates new diplomatic calculations

The ongoing war involving Iran is likely to feature heavily in the talks.

Both China and Russia maintain close relations with Tehran and have helped shield Iran from Western sanctions over recent years. China purchases large amounts of sanctioned Iranian crude oil, while Moscow and Beijing have both criticized U.S. military actions against Iran.

At the same time, analysts say Beijing and Moscow are cautious about becoming too deeply involved in efforts to negotiate peace between Washington and Tehran.

Iran has reportedly expressed interest in China and Russia acting as security guarantors in a future agreement, but both countries appear focused primarily on protecting their own strategic interests.

For Xi, the simultaneous engagement with Trump and Putin reflects an effort to strengthen China’s image as a global power capable of speaking to all sides while advancing its own geopolitical ambitions.

For Putin, the visit comes at a difficult moment as Russia faces continued military pressure in Ukraine and growing dependence on Chinese economic support.

The summit is expected to reinforce the message that despite U.S. efforts to isolate Moscow and pressure Beijing, the strategic partnership between China and Russia remains strong.

(Source: CNN)

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akistan’s desire to mediate stems from a need for peace and a perception of a vital threat. The war in Iran could lead to a direct security crisis for Pakistan. While the Iranian Ministry of Defense’s latest statement suggests that the U.S. is seeking to “save face,” Pakistan has feared from the beginning that the conflict would spread.

Defense Minister Hoca Muhammad Asif’s warning encapsulates Pakistan’s strategic concerns: This war could result in an Israel-aligned “encirclement” encompassing Afghanistan, Iran, and India. In such a scenario, Pakistan would be caught between a threat triangle comprising India to the east, Iran to the west, and Afghanistan/Taliban-aligned forces to the northwest. Although Islamabad dismisses the risk of a direct attack, citing the country’s integration into the international system and its robust defense capabilities, the instability that a proxy war would generate would be unacceptable for Pakistan.

In addition to external security concerns, Pakistan’s status as home to the world’s second-largest Shia population after Iran increases Islamabad’s internal security risks in the event of a potential escalation. In the early days of the war, for example, dissatisfied Shias in Karachi stormed the US Consulate. Meanwhile, the effective closure of the Strait of Hormuz for eight weeks constitutes a direct threat to the Pakistani economy. Pakistan is experiencing direct inflationary impacts caused by rising oil prices and global supply chain disruptions. Consequently, Munir’s mediation is viewed as a vital national security and economic imperative, not merely a foreign policy move.

The Rise of the Marshal as a diplomatic actor

As Islamabad-led diplomacy seeks to end the conflict, one name stands out in this critical role: Marshal Asim Munir. Munir’s exceptional performance can be attributed to his unique profile and the extraordinary consolidation of power that has taken place over the past year.

Munir is a new-generation military leader who embodies Pakistan’s institutional memory and pragmatism. Munir is one of the few figures to have previously led both Military Intelligence and the Inter-Services Intelligence (ISI). This experience makes him privy to all of the regime’s secrets. However, what sets him apart from his predecessors is his ability to maneuver on the international stage. While US President Donald Trump called him “my favorite marshal,” Iranian officials have also repeatedly expressed their trust in him. This mutual trust has placed Münir in a unique position.

Last year’s brief war with India marked a turning point in his rise. His measured response during that period earned him respect in Washington and enabled him to establish a direct line of communication with the Trump administration. Moreover, his position in Pakistan, where the military has the final say in domestic and foreign policy, has been further consolidated through constitutional amendments. Promoted to Marshal and granted lifelong judicial immunity, he is now the Chief of Defense Forces (CDF). This title encompasses air, naval, and strategic nuclear command, making him the country’s absolute authority. While Prime Minister Shahbaz Sharif is on diplomatic tours, Munir is seen as the true decision-maker and the “strongman.”

The benefits Pakistan hopes to gain from mediation

Pakistan’s mediation initiative is primarily aimed at securing vital economic gains. Sanctions against Iran due to the war and risks in the Strait of Hormuz have sent Pakistan’s energy prices soaring and plunged the country into a serious economic crisis. Pakistan has been forced to implement austerity measures, such as a four-day workweek for public sector employees and school closures. Through this mediation, Pakistan aims to revive the long-delayed Iran-Pakistan natural gas pipeline project. A successful agreement would provide Pakistan with a steady supply of low-cost natural gas, reducing industrial production costs and establishing long-term energy security.

Furthermore, this process has opened the door for Pakistan to form partnerships with the U.S. in cutting-edge strategic sectors, such as rare earth elements and cryptocurrency. The critical mining agreements signed under Marshal Munir’s personal supervision and the agreements reached with a cryptocurrency company linked to the Trump family demonstrate that the war-induced chaos has transformed into an economic opportunity for Pakistan.

In terms of foreign policy, Pakistan aims to achieve a “revision of its reputation” and strategic autonomy on a global scale through this initiative. Often labeled a “destabilizing force” due to its history in Afghanistan and disputes with neighbors, Pakistan seeks to elevate itself to the role of peacemaker. This process is believed to demonstrate Pakistan’s unique ability to conduct simultaneous diplomacy with Washington, Ankara, Tehran, Riyadh, and Beijing.

With the support of a broad international coalition ranging from the UN Secretary-General to China and Turkey to Saudi Arabia, Pakistan aims to position itself not just as a regional crisis manager but as an “indispensable interlocutor” in the eyes of global powers. This situation provides Pakistan

Backed by a broad international coalition ranging from the UN Secretary-General to China and Turkey to Saudi Arabia, Pakistan is positioning itself not just as a regional crisis manager, but as an “indispensable interlocutor” in the eyes of global powers. This provides Pakistan with the maneuvering space to advance the CPEC project with China and establish a strategic partnership with the U.S., alleviating the traditional pressure on the country to “pick sides” in the U.S.-China rivalry to some extent.

In domestic politics, the greatest gain relates to consolidating the army’s institutional legitimacy and political dominance under Marshal Asim Munir’s leadership. Mounting criticism of internal security, fueled by the economic crisis, protests by Imran Khan’s supporters, and the actions of terrorist organizations such as the Pakistani Taliban and the Baluchistan Liberation Army, had fueled debates about the erosion of trust in the army under Munir’s leadership. Despite these criticisms, the 2025 constitutional amendment elevated Munir to become the head of the army and the country’s most powerful leader since Pervez Musharraf. Consequently, this mediation process served as a demonstration of how Munir could project the profile of a “crisis manager” on the international stage using his new powers and secured his legitimacy.

Can Pakistan end the war?

So far, Pakistan has undertaken a functional mission, acting as a party capable of overcoming communication issues and conveying critical information that could end the war. However, as Pakistan lacks the capacity of a third-party Great Power to force concessions or exert pressure on the parties, which would be necessary to end the war completely, its options are limited.

Prior to the second round of talks, Iranian Foreign Minister Abbas Arakchi met with Marshal Munir and Prime Minister Sharif in Islamabad. He praised Pakistan’s efforts, particularly Marshal Munir’s, toward a ceasefire and the end of the war and conveyed Iran’s demands to Pakistani officials. Just as everything was ready for the American delegation to arrive in Islamabad and begin the second round of talks, Trump announced that he had canceled his team’s trip to Pakistan.

This sudden cancellation cast uncertainty over the future of the negotiations but did not bring the mediation process to a complete end. In a telephone conversation with the Iranian president, Prime Minister Sharif reiterated that Pakistan would continue to play the role of an “honest and sincere facilitator.” Trump’s refusal to negotiate appears to be a bargaining tactic that draws attention to the “chaos and internal conflicts” under Iranian leadership. Meanwhile, the U.S. has stated that it obtained this information from Pakistani officials.

Consequently, with the Strait of Hormuz still closed and the parties observing a ceasefire, it cannot be said that Pakistan’s mediation efforts have come to an end. In this context, the world will continue to watch and see if Islamabad can turn this chaos into a diplomatic victory.

(Originally published in Turkish by Kriter)

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.S. President Donald Trump said his patience with Iran is “running out” after talks with Chinese President Xi Jinping in Beijing, as tensions in the Gulf escalated with new attacks on commercial shipping near the Strait of Hormuz.

Speaking in an interview on Fox News’ “Hannity” program, Trump urged Tehran to agree to a deal with Washington after negotiations stalled over Iran’s nuclear program and its stockpile of enriched uranium.

“I am not going to be much more patient,” Trump said. “They should make a deal.”

The White House said Trump and Xi agreed during their meetings that the Strait of Hormuz must remain open to international shipping and that Iran should never obtain nuclear weapons.

According to the White House readout, Xi also opposed militarization of the strait and rejected any effort to impose tolls on ships passing through the waterway, which carries a significant share of global oil and liquefied natural gas supplies.

Trump further claimed Xi promised China would not provide military equipment to Iran.

“He said he’s not going to give military equipment, that’s a big statement,” Trump said during the interview.

Shipping incidents raise tensions in Gulf waters

The comments came as maritime security concerns intensified in the Gulf region.

An Indian cargo vessel transporting livestock from Africa to the United Arab Emirates sank off the coast of Oman on Wednesday after what security officials believe was a missile or drone strike. India said all 14 crew members were rescued by the Omani coast guard.

Separately, British maritime security authorities reported that unidentified personnel boarded a ship anchored near the UAE port of Fujairah and redirected it toward Iran. Security consultancy Vanguard said the vessel was believed to have been seized by Iranian personnel.

Fujairah is strategically important because it allows some oil exports to bypass the Strait of Hormuz, which Iran has partially restricted since the conflict began following U.S. and Israeli strikes on Iran in February.

Iran appears to be selectively allowing some vessels through the strait under negotiated arrangements with certain countries. Iranian media reported agreements enabling some Chinese ships to pass, while a Japanese tanker also crossed after diplomatic contacts between Tokyo and Tehran.

Iran’s Islamic Revolutionary Guard Corps said 30 vessels had passed through the strait since Wednesday evening, although shipping volumes remain far below pre-war levels.

Diplomacy remains stalled

Despite the Trump-Xi talks, negotiations between Washington and Tehran remain frozen.

The United States is demanding that Iran surrender its enriched uranium stockpile and permanently halt uranium enrichment activities. Tehran, meanwhile, is seeking sanctions relief, compensation for war damage and international recognition of its authority over the Strait of Hormuz.

Analysts say Trump is eager to secure diplomatic progress as the war increasingly affects domestic politics ahead of U.S. midterm elections later this year.

However, experts remain skeptical that China will pressure Iran aggressively. Beijing relies heavily on Iranian oil and views Tehran as an important strategic partner against U.S. influence in the Middle East and Asia.

U.S. Treasury Secretary Scott Bessent said in Beijing that China would likely support efforts to reopen shipping routes because stability in the strait is “very much in their interest.”

U.S. says Iran’s military capabilities weakened

Trump defended the military campaign against Iran, saying its goals were to damage Iran’s nuclear program, reduce its ability to threaten neighboring states and weaken the country’s leadership.

A senior U.S. military commander told a Senate committee on Thursday that Iran’s capacity to threaten regional partners had been “significantly degraded.”

Admiral Brad Cooper said Iran no longer posed the same level of threat across multiple military domains, though he declined to comment directly on reports that Tehran still retains substantial missile and drone capabilities.

Despite the prolonged conflict and thousands of casualties from U.S. and Israeli strikes, Iran’s leadership has remained in control domestically. Analysts say Tehran’s continued influence over the Strait of Hormuz has given it additional leverage in negotiations with Washington.

(Source: Reuters)

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ince the war began on February 28, the US administration has suffered from profound strategic blindness in assessing the crisis between Washington and Tehran. This is particularly evident in its misjudgement of Iran’s strategic resilience and decision-making mechanisms. Washington continues to formulate strategy based on a flawed analogy with Venezuela, one entirely detached from on-the-ground realities, just as with its decapitation strategy aimed at regime change in Iran.

The idea that President Donald Trump and Vice President JD Vance see Iranian Parliament Speaker Mohammad Baqer Qalibaf as similar to Venezuela’s pragmatic politician Delcy Rodríguez and believe he could be pressured to negotiate is wishful thinking. In reality, however, the final decision-making authority in Iran does not lie with civilians or individual politicians. Rather, it is the exclusive preserve of a rigid military-security core consolidated around the Islamic Revolutionary Guard Corps (IRGC).

This new hegemonic elite, which includes Kalibaf, is firmly committed to the fundamental ideological tenets of the Islamic Republic. The idea that individuals like Kalibaf could transcend military tutelage, alter Iran’s strategic trajectory, and become negotiating partners is a delusion on Washington’s part. This notion disregards the regime’s decision-making structure.

At the heart of the current impasse between Washington and Tehran is the asymmetry between the U.S.’s coercive approach to diplomacy and Iran’s survival priorities. The Trump administration’s classic “carrot-and-stick” approach, based on the assumption that every actor will yield at a certain cost, is ineffective against Tehran. The issues that the US brings to the negotiating table—the right to enrich uranium in its nuclear program, ballistic missile capabilities, regional proxy forces, and freedom of movement in the Strait of Hormuz—are not negotiable for Tehran.

The Iranian leadership interprets American demands that would undermine these existential pillars as a call for surrender. Tehran is prepared to bear enormous economic and military costs rather than yield to these demands because simply surviving American pressure is a victory in itself. As long as both sides persist in their mutual illusion of self-confidence—believing that their gains on the ground have forced the other side to make concessions and that the other side has suffered more damage from this crisis than they have—the formation of a credible basis for diplomatic agreement seems highly unlikely.

The ‘neither war nor peace’ dilemma and the naval blockade

The Trump administration’s decision to extend the ceasefire was not a quest for peace but a strategy of attrition aimed at altering the nature of the conflict in the US’s favor. Tehran perceives the indefinite extension of the ceasefire while the de facto naval blockade against Iran continues as the worst-case scenario, which is intended to gradually erode its strategic capabilities. Iran rejects this state of suspension — this “neither war nor peace” limbo. A report in The Wall Street Journal on April 28 detailed Donald Trump’s directive for an expanded naval blockade aimed at choking off Iran’s oil exports. This indicates that the crisis has not subsided, but rather been tactically recalibrated. However, according to Iran’s strategic community, this move is a psychological delaying tactic designed to create the illusion that active hostilities have ended. This would weaken the country’s security mechanisms and pave the way for a surprise US-Israeli attack.

Conversely, the belief that Washington could force Iran to submit through a naval blockade is as misguided as expecting regime change. Iran has developed asymmetric resistance against economic sanctions for decades, so a naval blockade is not just another routine embargo for them; it is a declaration of war waged through other means. Therefore, from Iran’s perspective, the current situation is not a de-escalation, but rather the beginning of an escalation phase that will, sooner or later, trigger a more intense wave of asymmetric conflict. Iran will not confine its response to its own waters but will spread the cost across the global system.

Although its conventional navy has largely been destroyed, the DMO has built a massive, asymmetric “mosquito fleet” in the Strait of Hormuz. This fleet comprises hundreds of low-cost speedboats, unmanned systems, and advanced sea mines, such as the Maham series. Rather than focusing on controlling the strait, this structure enables Iran to block rivals’ access and retain the leverage to provoke a crisis in the Bab el-Mandeb Strait, as well as the Strait of Hormuz, should the blockade intensify.

The nuclear paradox and the new security architecture

Military action is also far from resolving the structural issues between the US and Iran. Attacks by the U.S. and Israel targeting missile or unmanned aerial vehicle (UAV) facilities in the region only temporarily reduce capacity. This tactic, known in military literature as “mowing the grass,” does not permanently eliminate the threat. Iran’s military infrastructure is deeply integrated into the geography and relies largely on domestic production, so it can be rapidly replenished.

Furthermore, the maximum military and economic pressure being applied has created an extremely dangerous paradox regarding the nuclear program. Rather than deterring Iran from its nuclear objectives, the growing existential threat and successive conflicts are reinforcing the belief in nuclear armament within the DMO. In the eyes of Iranian decision-makers, achieving nuclear capability is no longer merely desirable; it is now viewed as an indispensable guarantee of the regime’s survival.

Looking back at the recent past, Supreme Leader Ali Khamenei presented a pragmatic profile despite being an ideological leader. He possessed the flexibility to reach a nuclear agreement with the Obama administration and was cautious enough to avoid risks while responding to the period following October 7, 2023, and the direct Israeli attacks in 2024. However, with his death, this delicate balance vanished, giving rise to an Iran that is far more unpredictable and dangerous to regional security. Terminating the 2015 Nuclear Agreement (JCPOA) without a concrete alternative was a major political blunder rather than a strategic move. This move removed international restrictions and monitoring mechanisms on Iran, creating an opportunity for the regime to expand its nuclear capabilities.

As a result, Iran has increased its uranium enrichment level from 3.67 percent to 60 percent, shortened the time needed to acquire a nuclear weapon from one year to a few weeks, and effectively become a “nuclear threshold state.” For Iran, 90 percent enrichment is now a matter of choice, not capability. Since crossing the technological critical threshold, Iran has the ability to process its existing stockpile of 440 kilograms of enriched uranium to the final stage in small-scale facilities. Completely halting the nuclear program by military means would require a ground operation that is virtually impossible in the current situation.

Inevitable escalation

The gap between Iran’s unwavering stance and the US’s minimum acceptable limits is so wide that diplomatic efforts have devolved into mutual accusations rather than compromise. There is no credible way out, nor any room for flexibility, to defuse the tension. Washington’s reliance on sanctions and temporary military interventions, dubbed “mowing the lawn,” is insufficient to resolve this strategic impasse.

Consequently, unless Washington scales back its maximalist objectives or Iran fundamentally alters its security approach, this spiral of coercive pressure will yield neither compromise nor capitulation. This scenario, in which no sustainable diplomatic solution exists, is more likely to usher in a far more destructive phase of conflict. In this phase, costs would be spread across the global system through asymmetric means, transcending borders and rendering predictability entirely lost. This phase would be far worse than simply plunging the parties into a conventional war of attrition.

(Originally published in Turkish by Middle East Africa)

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.S. President Donald Trump is expected to press Chinese leader Xi Jinping for assistance in ending the war with Iranduring high-level talks in Beijing this week, but analysts say China is unlikely to offer the decisive support Washington wants.

According to Reuters, Trump’s administration sees Beijing as one of the few governments with enough economic and political influence over Tehran to encourage Iranian leaders back toward negotiations. China remains Iran’s largest oil customer and an important economic lifeline amid Western sanctions.

However, experts say Beijing’s broader strategic interests make it reluctant to pressure Tehran too aggressively.

While China wants stability in the Middle East and an open Strait of Hormuz — through which much of its imported oil passes — Iran also serves as a key regional partner and a geopolitical counterweight to the United States.

Analysts note that the conflict has already benefited Beijing in some ways by shifting U.S. military and diplomatic attention away from the Indo-Pacific region, where China is focused on expanding its influence.

Henrietta Levin of the Council for Strategic and International Relations said Xi is approaching the summit with growing confidence, particularly after Trump eased back from last year’s aggressive tariff campaign against China.

China balances economic interests with strategic alliances

Beijing faces competing priorities as the Iran war continues.

On one side, China depends heavily on energy imports passing through the Strait of Hormuz and has suffered economically from rising oil prices and disruptions caused by the conflict. Iranian military actions in the waterway have threatened a route carrying roughly one-fifth of global oil supplies.

On the other hand, China values its long-term relationship with Iran. Analysts say Beijing is unlikely to cut economic support or halt the supply of dual-use goods that Tehran’s military can use for both civilian and defense purposes.

Chinese officials have publicly rejected U.S. pressure tactics. Liu Pengyu, spokesperson for the Chinese Embassy in Washington, criticized what he described as “illicit unilateral sanctions” and called instead for preventing a renewed escalation in fighting.

Trump has insisted publicly that the United States does not depend on China to force Iranian concessions, arguing that the U.S. naval blockade around Iran already gives Washington leverage. Still, people briefed on the summit preparations told Reuters that U.S. officials privately hope Beijing can help stabilize the situation.

The report highlights the limited options available to the Trump administration in trying to force Chinese cooperation.

The United States has already sanctioned some Chinese firms accused of helping Iran evade restrictions or support military activities. However, experts say Washington has avoided taking action against the major Chinese banks facilitating trade with Iran because of fears of severe economic retaliation.

Brett Erickson of Obsidian Risk Advisors said existing sanctions have had little effect because the U.S. Treasury has avoided targeting the most important financial institutions involved.

Analysts warn that sanctions against major Chinese state-owned banks could trigger a wider economic confrontation between the world’s two largest economies, potentially reviving the tariff war that both sides paused last year.

Edward Fishman of the Council on Foreign Relations said even penalties against a smaller Chinese bank could spark a cycle of retaliatory measures damaging to both economies.

Such escalation could also worsen inflation inside the United States at a politically sensitive moment for Trump, whose approval ratings have already been hurt by the Iran conflict.

Rare earths remain a powerful Chinese leverage tool

Another major concern for Washington is China’s dominance in rare earth processing.

China controls much of the global refining capacity for rare earth minerals used in advanced electronics, electric vehicles and military technologies. During last year’s trade tensions, Beijing signaled it could restrict exports of those materials, alarming Western governments and industries.

Analysts say the threat of renewed Chinese export restrictions continues to limit how aggressively Washington is willing to confront Beijing economically.

Former U.S. Deputy Secretary of State Kurt Campbell said China has likely learned from watching previous American interventions in the Middle East and will avoid becoming deeply entangled in the conflict.

“They will want to be careful because they can see political quicksand,” Campbell told Reuters.

As Trump and Xi meet in Beijing, the summit is expected to reveal not only the limits of U.S.-China cooperation over Iran, but also the growing complexity of a relationship shaped simultaneously by rivalry, economic interdependence and competing global ambitions.

(Source: Reuters)

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eopolitical tensions centered around the Strait of Hormuz, one of the most critical chokepoints for the global energy supply, amid the US/Israel-Iran conflict, are having multifaceted effects on the world economy. The intermittent opening and closing of the strait intensifies these effects, creating additional uncertainty. The war-related crisis is putting upward pressure on energy prices by increasing the risk to oil and natural gas supplies, while also carrying the potential to disrupt global inflation dynamics.

Rising energy costs increase production costs, particularly in energy-importing countries, while negatively affecting industrial production and trade balances. Ultimately, the war is leading to downward revisions in global growth expectations. Consequently, a sustained rise in energy prices would constrain not only production costs, but also household disposable income, thereby tightening demand.

The crisis is spreading not only through energy prices, but also via trade routes, supply chains (particularly for food), and financial markets. Disruptions in the Strait of Hormuz could increase logistics costs across a wide geographical area, particularly in Asia, while potentially slowing global trade volumes. Rising geopolitical uncertainty is dampening investment appetite and increasing volatility in financial markets. The strengthening of risk-aversion trends, in particular, is causing fluctuations in capital flows to emerging economies. This creates additional vulnerability through exchange rates and financing costs. In this context, should the crisis persist, the risk of “stagflation”, where both inflationary pressures and growth losses are observed simultaneously, could intensify.

A massive, historic shock to the global oil supply

The closure of the Strait of Hormuz due to the US-Israel/Iran conflict has already caused a massive, historic shock to the global oil supply. According to analyses based on research by the Federal Reserve Bank of Dallas, this closure is equivalent to removing approximately 20 percent of the global oil supply from the market. This is three to five times greater than previous supply shocks, such as the 1973 oil crisis, the Iranian revolution of 1979, and the Gulf War of 1990. The resulting supply crunch is prompting oil-importing nations to seek alternative sources while exerting strong upward pressure on global oil prices. It is also bringing debates about energy security back to the forefront of the global agenda.

According to these analyses, oil prices are expected to rise to approximately $98 per barrel in the quarter in which the lockdown takes place, and global real GDP growth is projected to contract by 2.9 percentage points on an annualized basis. If the financial and geopolitical shock caused by the war persists and the lockdown is extended, oil prices could rise to the $115–$132 range, and the negative impact on growth could spread across the entire year. If the lockdown is short-lived, a decline in oil prices and a partial recovery in growth may be observed. However, the main scenario suggests that global income levels will remain below their initial trend due to the lasting effects of production losses. This situation shows that supply shocks can disrupt medium-term growth dynamics beyond temporary fluctuations.

Furthermore, it is evident that actual supply disruptions and expectations of geopolitical risks strongly influence prices and economic activity. Increased stockpiling behavior driven by these expectations heightens price volatility. Meanwhile, the rapid depletion of stocks in the event of a disruption further exacerbates supply pressures. In this context, uncertainty in energy markets is a significant accelerator of economic contraction.

Türkiye’s role as an alternative to Hormuz: The middle corridor and the development route

Due to the depth of Türkiye’s economic presence in the region, it is inevitable that the country will be affected by the conflict. Considering the $65 oil price assumption in the Medium-Term Program, a permanent shift to the $100 range could cause significant deviations in macroeconomic balances. In this scenario, Türkiye’s annual energy import costs are estimated to rise by $10–15 billion, and the current account deficit-to-GDP ratio could increase by one percentage point.

Furthermore, an increase in the budget deficit and a slowdown in growth are anticipated. At this juncture, Türkiye’s reserve position emerges as the most critical buffer for the economy. The recent rise in gross reserves to the $170 billion range has increased the capacity to withstand external shocks. However, should the war persist, a sustained rise in energy prices will continue to put upward pressure on Türkiye’s current account balance and inflation trajectory, even with a strong reserve buffer

New initiatives to mitigate the effects of the war are also on the agenda. Mitigating the impact of the supply shock on the global economy largely depends on deploying alternative logistics and energy routes. Options include Saudi Arabia redirecting trade via Yanbu Port to the Red Sea, the United Arab Emirates bypassing the Strait of Hormuz via Fujairah Port, and securing limited transit through bilateral agreements, which could partially reduce the supply shortfall. However, due to security risks and capacity constraints, these alternatives do not appear feasible in the short term to fully compensate for the global supply shortfall.

This highlights the critical importance of geographical diversification for energy supply security. In this context, the Türkiye-centered “Middle Corridor” has been highlighted in the international press as one of the leading alternatives. In this context, the Türkiye-centered “Middle Corridor” has been highlighted in the international press as one of the leading options. Stretching from Asia to Europe via the Caspian Sea and the Caucasus, this corridor is attracting attention because it offers shorter transit times and lower geopolitical fragility than sea routes.

Türkiye and the Middle Corridor

As the Middle Corridor grows stronger, Türkiye is establishing itself not only as a transit hub, but also as a strategic center directing trade and energy flows. According to analyses by the Financial Times, when combined with existing energy pipelines and logistics infrastructure, this route could form a realistic alternative capable of reducing dependence on the Strait of Hormuz. Increasing the corridor’s transport capacity, streamlining customs and logistics processes, and deepening regional integration could significantly enhance Türkiye’s role in global supply chains. Within this framework, the Development Corridor project is also gaining prominence in the economic equation.

Spanning approximately 1,200 kilometers from the Persian Gulf through Iraq to Türkiye and on to Europe, this new corridor could offer time and cost advantages in global trade by serving as an alternative to the Suez Canal. Asia–Europe shipments that currently take one and a half months by sea could be reduced to under 25 days via this route, transforming Türkiye’s position as a transit country into a structural advantage. With an estimated total investment of between 15 and 20 billion dollars and a multimodal structure including rail and road transport, the Development Corridor is one of two main axes—alongside the Middle Corridor—strengthening Türkiye’s geo-economic backbone.

Consequently, while a potential crisis centered on the Strait of Hormuz could severely disrupt global energy and trade flows, the resulting uncertainty is accelerating Türkiye’s search for alternative logistics routes and corridors. Nearly 20 percent of global energy trade passes through the Strait of Hormuz, so any disruption would trigger price shocks and necessitate route diversification. In this context, projects such as the Development Corridor and the Middle Corridor enhance Türkiye’s ability to convert its geographical advantage into economic gains. Although risks remain high in the short term, Türkiye’s ability to implement this new logistics architecture in the medium and long term provides flexibility during this period of global trade reshaping.

(Originally published in Turkish by Kriter)

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.S. President Donald Trump arrives in China this week facing mounting political and economic pressure at home, with analysts saying he now needs cooperation from Chinese President Xi Jinping more than ever as the war with Iran weighs on his presidency.

The May 14-15 summit in Beijing marks the first major face-to-face talks between the two leaders since they agreed last October to pause an escalating trade war that had shaken global markets. Expectations for the meeting, however, are far lower than during Trump’s earlier confrontations with Beijing, when he promised sweeping tariffs would force China into major concessions.

Instead of broad economic victories, analysts expect only limited agreements focused on agricultural exports, aircraft sales and mechanisms to manage future trade disputes. According to officials involved in preparations for the summit, it remains uncertain whether Washington and Beijing will even extend their fragile trade truce.

Political analysts say the shift reflects how Trump’s hardline strategy has struggled to produce clear gains. Alejandro Reyes, a professor specializing in Chinese foreign policy at the University of Hong Kong, said Trump is now searching for a foreign policy success that could restore confidence in his leadership.

“Trump kind of needs China more than China needs him,” Reyes said, arguing that the U.S. president wants to show voters he can stabilize international affairs rather than deepen global tensions.

The summit will include high-profile ceremonial events in Beijing, including meetings at the Great Hall of the People, a visit to the Temple of Heaven and a state banquet. Trump will also be accompanied by a delegation of American business leaders, including executives from Tesla and Apple, although the group is reportedly smaller than during his 2017 China visit.

Iran war reshapes Trump’s priorities

The ongoing conflict with Iran has become a central factor shaping Trump’s diplomatic agenda. Reuters reported that the president hopes China can use its influence with Tehran to help secure a deal that could reduce tensions and eventually end the war.

China remains one of Iran’s most important economic partners and continues to purchase significant amounts of Iranian oil despite Western pressure. Beijing has also maintained diplomatic relations with Tehran throughout the conflict.

The war has increasingly become a political liability for Trump. A recent Reuters/Ipsos poll found that more than 60% of Americans disapprove of his handling of the Iran conflict, amid concerns over rising energy prices and growing instability in the Middle East.

At the same time, Beijing appears positioned to demand concessions in return for any cooperation over Iran. Analysts say China’s top priority remains Taiwan, the self-governing island claimed by Beijing.

Chinese officials and policy advisers are expected to push Trump to reaffirm opposition to Taiwanese independence and avoid actions that could strengthen Taipei diplomatically or militarily. Even subtle changes in Washington’s language on Taiwan could raise concerns among U.S. allies across Asia about America’s long-term commitments in the region.

Trade tensions remain unresolved

Despite the temporary tariff truce reached last year, major trade disputes between the world’s two largest economies remain unresolved.

China has expanded its economic leverage in recent months, particularly through tighter controls on rare earth exports — materials critical for electric vehicles, semiconductors and military equipment. Beijing has also introduced laws designed to punish foreign companies that relocate supply chains away from China.

Meanwhile, the Trump administration continues to face legal and political challenges over its tariff policies. U.S. courts have questioned aspects of Trump’s trade measures, weakening the administration’s negotiating position ahead of the Beijing summit.

China is reportedly seeking guarantees that Washington will avoid imposing new technology restrictions and may push for the rollback of existing controls targeting advanced chipmaking equipment and memory chips.

Some analysts believe the most realistic outcome of the summit is simply maintaining stable relations and avoiding another escalation in trade tensions.

Scott Kennedy of the Center for Strategic and International Studies described the likely result as “a superficial ceasefire that is largely to China’s advantage.”

Still, for Trump, even a limited diplomatic success could help counter growing criticism over the Iran war and demonstrate that his administration remains capable of managing increasingly complex global crises.

(Source: Reuters)

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.S. President Donald Trump has rejected Iran’s response to a U.S.-backed peace proposal, calling Tehran’s counteroffer “totally unacceptable” as fears grow that the conflict could further destabilize global energy markets.

The sharp exchange came after Iran outlined conditions for ending the 10-week-old conflict, including a halt to the U.S. naval blockade, compensation for war damages, the lifting of sanctions, and recognition of Iranian sovereignty over the Strait of Hormuz — a strategic waterway that carries nearly one-fifth of the world’s oil supply.

Iranian state media said Tehran’s proposal also addressed wider regional fighting, particularly clashes in Lebanon involving the Iran-backed group Hezbollah and Israel.

Within hours of the Iranian response becoming public, Trump dismissed it in a post on Truth Social.

“I don’t like it — TOTALLY UNACCEPTABLE,” he wrote, without elaborating.

The White House proposal had reportedly sought an immediate end to fighting before opening negotiations on more divisive issues such as Iran’s nuclear program and regional military activities.

Oil markets react to diplomatic deadlock

Global oil prices climbed sharply Monday following Trump’s rejection of the Iranian terms, reflecting growing concern that shipping through the Strait of Hormuz could remain heavily disrupted.

The waterway has become one of the conflict’s most sensitive flashpoints. Before the war, it served as a critical route for global crude exports from Gulf producers.

The continuing instability has increased pressure on the United States domestically, where rising fuel prices are becoming a political challenge ahead of congressional elections later this year. Polls show growing public frustration with the economic impact of the conflict.

Washington has also struggled to build broader international backing for military operations in the Gulf. Several NATO allies have reportedly declined U.S. requests to join efforts aimed at reopening the Strait without a comprehensive peace agreement and a broader international mandate.

Trump is expected to travel to Beijing on Wednesday for meetings with Chinese President Xi Jinping, where Iran and the global energy crisis are expected to dominate discussions.

The U.S. administration has increasingly looked to China to use its influence with Tehran to push for concessions and a possible settlement.

Speaking in televised remarks on Sunday, Trump said Iran had been weakened militarily but warned the conflict was not over.

“They are defeated, but that doesn’t mean they’re done,” he said.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said the war would continue until Iran’s enriched uranium stockpiles, enrichment facilities, ballistic missile capabilities and regional proxy networks were addressed.

Regional security concerns persist

In an interview with CBS’s “60 Minutes,” Netanyahu said diplomacy remained the preferred path for dealing with Iran’s nuclear material, though he did not rule out military action.

Iranian President Masoud Pezeshkian responded defiantly, saying Iran would “never bow down to the enemy” and would continue defending its national interests.

Despite diplomatic contacts, military tensions across the Gulf region remain high.

The United Arab Emirates said it intercepted two drones launched from Iran on Sunday, while Qatar condemned an attack on a cargo vessel traveling from Abu Dhabi through Qatari waters. Kuwait also reported intercepting hostile drones entering its airspace.

Clashes have also persisted in southern Lebanon between Israeli forces and Hezbollah despite a U.S.-brokered ceasefire announced in April.

Netanyahu acknowledged that Israeli officials initially underestimated Iran’s ability to disrupt maritime traffic through the Strait of Hormuz.

“It took a while for them to understand how big that risk is,” he said in the interview.

With diplomacy stalled and regional fighting continuing, concerns are growing that the conflict could deepen further, prolonging disruptions to energy supplies and increasing instability across the Middle East.

(Source: Reuters)

F

ollowing Iran’s closure of the Strait of Hormuz on 28 February 2026, in response to attacks launched by Israel and the US against Iran, the impact of this conflict was clearly felt in the global economy. Even in its early stages, it was evident that the effects would extend beyond the regional level. The closure of this waterway, through which 20 per cent of the world’s oil is transported, caused the price of Brent crude, at around $72 on 27 February, to rise to $110 by the end of April.

Disruptions to the transit of not only oil and liquefied natural gas, but also numerous other commercial goods, have sparked widespread concern about the future. For example, news reports disseminated to the global public via mainstream media have highlighted the expectation that fertilisers unable to reach their destination ports in the aftermath of the outbreak of war will visibly impact the agricultural sector, and consequently food production.

Beyond the commercial goods transported through the Strait of Hormuz, war risk premiums, which previously stood at 0.25 per cent, have risen to 3 per cent, which is a significant additional cost for companies conducting maritime operations in the region. Consequently, the commercial environment in the region has a bleak outlook for everyone in the short term. While all these developments remain in the spotlight, potential scenarios involving Iran closing the Bab el-Mandeb Strait as a second geopolitical trump card after the Strait of Hormuz are also being discussed. Iran is said not to have fully deployed its proxy forces on the ground in the early days of the war.

Given the likelihood of such an event being reinforced by statements from Iranian officials such as Ali Hezriyan, a member of the National Security Commission of the Iranian Parliament, it is important to examine the potential influences on the situation, considering the strait’s current position in global trade and the valuable assets in its vicinity.

The geopolitical importance of the Bab el-Mandeb Strait

The Bab el-Mandeb Strait is a narrow waterway connecting the Gulf of Aden with the Red Sea. Alongside the Suez Canal, it has gained undeniable importance in global maritime trade. This strait is an essential route for travel from the Indian Ocean to the Mediterranean, and it currently hosts a significant proportion of maritime transport between Asia and Europe. Situated in the southern Red Sea, this 36-kilometer-wide passage is bordered on the eastern side by Yemen and on the western side by the coasts of Eritrea and Djibouti.

Iran’s strategic influence over the strait is exercised through its key proxy in Yemen, the Houthis. This week, Hezriyan stated that the Houthis had completed drills for closing the strait and that, should this occur, non-hostile vessels would have to choose between paying an additional 30 million dollars to circumnavigate the strait or paying 5 million dollars to the Houthis for safe passage.

Should it materialize, there is no doubt that the economic repercussions of such an initiative would engulf the entire world, much like the Hormuz crisis. For this reason, it is crucial to assess the actors involved in the Bab el-Mandeb Strait and analyze the balance of power there. The Houthis, Iran’s proxy in Yemen, are the most prominent factor in the current landscape, given the possibility of closing the strait to traffic. According to UN estimates, the number of Houthi fighters increased from 220,000 in 2022 to 350,000 by 2024.

The Houthis can be defined as part of the resistance axis, which Iran has devoted significant effort and resources to in order to counter the Israel–US partnership, or the Zionist alliance, which constitutes the primary threat to Iran in the Middle East. Through this connection, Iran gains the ability to control the Strait of Bab el-Mandeb, and consequently Red Sea traffic, despite having no land or maritime borders with the region.

The Chinese military base in Djibouti

Alongside these familiar regional actors, another noteworthy factor is the Chinese military base in Djibouti. While the People’s Republic of China has no other overseas military bases, in 2017 it made a significant financial investment to establish its first overseas military base at the heart of the Strait of Bab el-Mandeb. It is understood that activities related to aviation and space operations are also conducted at this base.

Taking into account all these actors, as well as all international military activity in the region, including the Turkish military base in Mogadishu, despite its distance from the strait, it is possible to draw the following conclusion. The Bab el-Mandeb Strait has emerged as the next focus of the Hormuz crisis, part of the war that began between the US/Israel and Iran on 28 February 2026, and is of great significance not only to the course and outcome of this war, but also appears set to be one of the region’s most discussed topics in the coming years, even outside the context of the war.

Yemen, a country situated in a strategic position overlooking the strait and serving as a stage for Iran’s sphere of influence, whilst also hosting the UAE’s military presence (the UAE maintains close ties with Israel), has long been plagued by instability. The rare strategic presence of a distant country such as China in this region, alongside Ethiopia’s intense efforts to secure a direct link to the Red Sea amidst high tensions in its relations with neighbors and the concurrent trajectory of the rivalry between Eritrea and Djibouti with that of regional powers, all appear set to dominate the global agenda for some time, alongside the Middle East and East Africa.

(This article was originally published by the Middle East and Africa website in Turkish)

B

y late April 2026, the war involving Iran, the United States and Israel has pushed Iran’s already fragile economy into a deepening crisis, leaving millions of Iranians facing unemployment, inflation and growing poverty.

Across the country, workers from nearly every sector, from heavy industry and aviation to online services and education, are losing jobs or seeing their incomes collapse as airstrikes, internet shutdowns and trade disruptions cripple economic activity.

For many Iranians, the consequences of the conflict are immediate and personal.

Asal, a freelance designer in her 30s living in Tehran, said international work opportunities disappeared after prolonged internet restrictions cut her off from clients abroad.

“Everything just stopped overnight,” she told CNN, explaining that her income no longer covers basic living expenses.

Her story reflects a broader national crisis unfolding as Iran’s economy absorbs the impact of war after years of sanctions, inflation and structural weakness.

Economy fragile before war

Even before the fighting escalated, Iran’s economy was under severe pressure. National income per person had dropped from roughly $8,000 in 2012 to about $5,000 by 2024, weakened by international sanctions, corruption and years of high inflation.

Now economists warn that conditions are deteriorating rapidly.

According to estimates from the United Nations Development Program, as many as 4.1 million additional Iranians could fall into poverty because of the conflict.

Thousands of airstrikes have damaged factories, infrastructure and industrial sites across the country. Iranian media outlet EcoIran reported that more than 23,000 factories and businesses have been affected.

Iranian Deputy Work and Social Security Minister Gholamhossein Mohammadi said the destruction has directly cost one million jobs. Additional disruptions throughout the economy may have pushed another million people out of work.

The war has severely disrupted Iran’s industrial production and trade networks.

Israeli strikes targeting major petrochemical facilities last month forced thousands of workers into unpaid leave, while damage to steel production created shortages that spread across manufacturing industries.

Trailer manufacturer Maral Sanat reportedly laid off 1,500 workers because of insufficient steel supplies. One of Iran’s largest textile producers, Borujerd, dismissed around 700 employees.

Economic analyst Hadi Kahalzadeh of the Quincy Institute for Responsible Statecraft warned that the combination of war, inflation and collapsing consumer demand is threatening much of Iran’s labor market.

He estimated that disruptions to shipping and imports could place up to half of Iranian jobs at risk while pushing even more citizens into poverty.

Meanwhile, shortages of imported materials have forced dairy plants and other manufacturers to suspend operations.

Official figures show unemployment insurance applications have surged dramatically, reaching approximately 147,000 in the past two months, nearly three times the number recorded during the same period last year.

Inflation and internet shutdowns deepen hardship

The economic pain has been intensified by soaring inflation.

Official data placed annual inflation at 72% in March, though prices for essential goods rose even faster, putting food and household necessities beyond the reach of many families.

At the same time, widespread internet shutdowns have devastated sectors dependent on digital connectivity.

Iranian media reported layoffs at the country’s largest e-commerce company, Digikala, as online businesses struggle to operate under communication restrictions.

Jafar, a data analyst whose company shut down entirely, told independent media outlet Fararu that he is now considering work in ride-hailing services simply to survive.

The internet disruptions have particularly affected women working remotely.

Somayeh, an online German teacher from Isfahan, said unreliable domestic applications and weak connectivity have made online teaching nearly impossible.

“Platforms keep crashing,” she said, explaining that students are often unable to join lessons consistently.

Women have accounted for roughly one-third of unemployment insurance claims filed since the war began.