MIDDLE EAST - The price of crude oil is a broken barometer. Acute pain in the world energy market has switched to the trio of refined products that we actually consume: diesel, petrol and jet fuel. The IATA jet fuel index for global airlines has hit $154 a barrel in Europe and $149 in North America, almost double the cost of underlying crude. In trade parlance, the “crack spread” has gone mad. It is arguably worse for diesel. The spread over crude has reached $80 in Rotterdam and $88 in New York, the highest since records began. The whole global market is seizing up. “I’ve never seen an energy environment this stretched,” said Jeff Currie, perhaps the world’s best-known oil guru. Oil traders say it would not take much at this stage to set off a sudden “non-linear” spike to $200 levels. We have been lulled into complacency by deceptively moderate oil headlines and by assumptions that the Iran war has settled into a low-intensity management problem. It is nothing of the sort.
USA - Donald Trump has warned Iran that for every ship it attacks in the Strait of Hormuz, US forces will blow up a bridge or power plant. The US president said no bridges or power plants were off limits, and that Washington could target some in Tehran. Mr Trump wrote on Truth Social: “From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran.” Abbas Araghchi, Iran’s foreign minister, said: “Our defense doctrine is clear: eye for an eye. Any aggression against Iran, including our infrastructure, will compel a powerful and decisive response."
IRAN - Does Iran have the ability to conduct 9/11-style attacks on US soil? As you will see below, the Iranians are making all sorts of very serious threats and they are encouraging us to “prepare as many coffins as possible”. But most Americans do not take such threats seriously. They seem to believe that the war that is raging on the other side of the planet could never reach us. According to Iran’s state-linked Tasnim news agency, the IRGC said: “If the war continues, we will carry out regret-inducing operations that will lead to national mourning in America.” The warning appeared to invoke the September 11, 2001 terrorist attacks, after which the United States declared national mourning.
USA - The US president is under pressure to hit back at Iran after the deaths of three US service members over the weekend. But rumours are spreading across the administration that the Pentagon is concealing a shortage of interceptor missiles, which are needed to resume the war. There are also suggestions that the White House does not want to know about the scale of the shortfall. Sharing “bad news, or realistic news, doesn’t seem to end well for anybody”, an insider told The Telegraph. Analysis by the Royal United Services Institute in March calculated the US and its allies had burned through more than 11,000 munitions in the first 16 days of war, and predicted they were a month away from running out of critical munitions. Mr Trump has put the US on a war footing in recent days, suggesting the war on Tehran could resume with greater ferocity and on a greater scale than before.
USA - The Pentagon is running out of money, Pete Hegseth has admitted. The US defence secretary warned his department would face “critical shortfalls” if Congress did not pass an emergency funding request, and said the cost of the Iran War had ballooned to at least $37.5 billion (£28 billion). “Without these funds, we face critical shortfalls that threaten our ability to… pay our service members, rapidly replenish equipment and munitions, and sustain vital operations without disruption,” Mr Hegseth told the Senate appropriations committee on Tuesday.
IRAN - Ceasefire talks expose power split. President Pezeshkian of Iran has said he has begun to interact more regularly with the country’s supreme leader, who remains in hiding, as cracks emerge between the regime’s relatively weak pragmatists and the ascendant hardliners in the Revolutionary Guards. Pezeshkian insisted he took his orders from Ayatollah Mojtaba Khamenei, who was badly injured in the strike that killed his father and has since made statements only in written messages. Both Iran’s moderates and hardliners do appear in agreement, however, over its control of the Strait of Hormuz, the vital waterway that set off the most recent round of conflict. Iran, which closed the strait to shipping during the war, insists that a deal with the US last month allows it to manage and profit from traffic through the strait, and to attack ships that try to cross without coordination.
YEMEN - Yemen’s Houthi rebel group targeted tankers in the Red Sea on Wednesday, threatening to escalate the Iran war to a regional conflict. Iran-backed Houthis in Yemen have also imposed a naval blockade on the Bab el-Mandeb strait, the gateway between the Red Sea and the Gulf of Aden near Saudi Arabia’s western coastline. By stopping Saudi oil exports to Asia, the blockade could reduce global oil supply by 7%, Reuters notes. Meanwhile, US forces are executing a twelfth consecutive night of attacks against Iranian military capabilities.
USA - Donald Trump has agreed to a nuclear deal with Saudi Arabia that could allow the kingdom to enrich its own uranium. The 30-year agreement, expected to be announced on Wednesday, may pave the way for the kingdom to develop nuclear weapons under the guise of a civilian programme, Israeli officials fear. But this deal is not Saudi Arabia’s first relating to nuclear power. After Israel carried out a deadly strike against a group of Hamas officials during a meeting in Qatar in September 2025, Riyadh signed a mutual defence pact with nuclear-armed Pakistan. The country’s defence minister said the nuclear programme “will be made available” to Saudi Arabia if necessary, a move seen as a warning to Israel, the only nation in the Middle East that is suspected to possess nuclear weapons.
IRAN - Iranian Interior Minister Eskandar Momeni made a trip to Pakistan on Tuesday with a “high-level delegation” to meet with Pakistani Prime Minister Shehbaz Sharif and his defense chief, Field Marshal Asim Munir. The Pakistanis are apparently hoping to restart talks between the US and Iran as hostilities continued for the tenth straight day. Pakistan has intensified its efforts to get Iran and the US back to the negotiating table, and may well have been the unnamed “mediator” who reportedly suggested a ten-day ceasefire to Iran on Monday. Field Marshal Munir has been leading Pakistan’s diplomatic efforts, as he enjoys a good public relationship with President Donald Trump. President Donald Trump said on Tuesday that the Iranians “want to desperately meet because they’re getting decimated.” “They want to desperately meet, and until they’re ready to meet in a meaningful way, we have no interest,” he said.
TURKEY - The Turkey that once welcomed Israeli tourists with warmth and hospitality has been fundamentally transformed. Under Erdoğan’s leadership, successive governments have strengthened the country’s Sunni Islamic identity while steadily eroding Atatürk’s secular legacy. As a NATO member and an important economic partner, Turkey remained a country with which Israel believed it had strong incentives to preserve relations. That reality has changed dramatically. Especially since the outbreak of the Israel-Hamas War, Turkey has evolved from a difficult partner into a regional actor seeking to position itself as a leading force in the anti-Israel camp.
SAUDI ARABIA - The Houthis fired missiles at Saudi Arabia last week after accusing the kingdom of bombing an airport under their control, breaking a four-year truce between the kingdom and the Houthis. The Saudi-led coalition in Yemen threatened on Monday to respond with "force" after Houthi military spokesperson Brigadier-General Yahya Saree declared an immediate naval blockade on the kingdom in a televised speech. The Iran-backed terror group announced "a maritime embargo against the criminal Saudi enemy, based on the equation of 'an eye for an eye' effective immediately upon the issuance of this statement." Yemen has been mired in civil war for more than a decade since the Houthis seized the capital, Sanaa, prompting a Saudi-led military intervention in 2015 in support of the internationally recognized government.
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