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The ongoing US-Israel war on Iran has taken a critical turn with Donald Trump's announcement that the US Navy would start blockading the Strait of Hormuz. This strategic waterway is crucial for global oil shipments, and any disruption could have significant economic impacts. In response, Iran's Revolutionary Guard warned that approaching military vessels to the strait would be considered a violation of the ceasefire. This development has led to a surge in oil prices, with US crude oil rising 8% to $104.24 a barrel and Brent crude oil increasing 7% to $102.29. The blockade, set to begin on Monday morning, will be implemented by US Central Command (Centcom) and will affect all maritime traffic entering and exiting Iranian ports. This move is part of a broader strategy that may include resuming limited military strikes in Iran, according to reports. The situation has drawn international attention, with Australian Prime Minister Anthony Albanese stating that his government has not been asked to participate in the blockade and is keen on continuing negotiations between the US and Iran. Meanwhile, Iranian parliamentary speaker Mohammad Bagher Ghalibaf dismissed Trump's threats, asserting that they would have no effect on the Iranian nation.

The collapse of talks between the US and Iran has sent shockwaves through global markets, fuelling fears of a prolonged energy crisis and rising inflation. The failure to reach a peace deal has left large numbers of oil tankers stuck in the Persian Gulf, with oil prices fluctuating wildly in response to the uncertainty.US Vice-President JD Vance has blamed the collapse of the talks on Tehran's refusal to abandon its nuclear weapons programme, while Iranian sources have hit back at what they describe as 'excessive' demands from Washington. The stalemate has raised concerns about the long-term impact on the global economy, with governments and central banks warning of higher inflation and interest rates.Mohamed El-Erian, an adviser to Allianz, has cautioned that uncertainty will continue to dominate assessments of the financial impact from the conflict. 'Absent a swift resumption of negotiations, the immediate reaction of financial markets when they open for the trading week will be to push oil prices higher and borrowing costs higher,' he said.The International Monetary Fund and World Bank's spring meetings in Washington will focus on the war's impact on the global economy, with the IMF's managing director, Kristalina Georgieva, indicating that the fund will present three scenarios predicting lower economic growth and higher inflation. The IMF is also expected to highlight the impact on vulnerable economies.In the short term, oil prices have ended the week lower, with Brent crude at $94.26 a barrel and West Texas Intermediate crude at $95.63 a barrel. However, global stock markets have rebounded after a temporary ceasefire was announced, with the S&P; 500 close to its level before the US-Israeli attacks on Iran began.

The world's finance ministers and central bank governors are gathering in Washington for the half-yearly meetings of the International Monetary Fund and the World Bank, with the global economy in a perilous spot. The US-Israeli war on Iran, coming soon after the Covid pandemic and Russia's invasion of Ukraine, has triggered significant economic turbulence.Even if a durable peace deal in the Middle East can be reached, there will still be permanent economic scars. The conflict has caused damage to infrastructure, heaping further pressure on already struggling households. This is the biggest energy shock of the modern age, with oil and gas prices surging, inflation rising, and borrowing costs increasing.The IMF has said it will cut its growth forecasts for 2026 when it publishes its flagship world economic outlook. In every scenario, growth is slower and inflation higher. Households worldwide will feel the pain, with the world's poorest bearing the brunt.The fund's managing director, Kristalina Georgieva, has urged officials to work together, warning that "go-it-alone actions" may have appeal but would ultimately make matters worse. The IMF cautions that any energy support should be targeted and temporary to limit the costs of blanket support and avoid stoking inequality.For central banks, the fund urges them to remain vigilant, with financial markets expecting interest rates to be kept on hold or raised to prevent high inflation from becoming entrenched. The economic problems are interlinked with political instability, making it a challenging situation for governments worldwide.

Iraq's parliament has elected Nizar Amedi as the country's new president, ending a political deadlock that had paralyzed government formation. Amedi, nominated by the Patriotic Union of Kurdistan (PUK), secured 227 votes in a second round of voting on Saturday, comfortably defeating independent candidate Muthanna Amin Nader, who received 15 votes.He becomes the sixth Iraqi head of state since the removal of Saddam Hussein in a US-led invasion in 2003. Speaking to parliament after the vote, Amedi acknowledged the weight of what lies ahead, pledging to work alongside all three branches of government and committing to the principle of 'Iraq First'.Amedi also condemned attacks that had targeted Iraq during the US-Israel war on Iran. The election comes as Iraq is still absorbing the shockwaves of the weeks-long war, which was halted with a ceasefire announced earlier this week.Attention now turns sharply to the choice of prime minister, a far more consequential and politically explosive question. Under Iraq's sectarian power-sharing system, the prime minister must be a Shia Muslim, the parliamentary speaker a Sunni, and the president a Kurd.Amedi now has 15 days to formally task the nominee of the largest parliamentary bloc with forming a cabinet, which must then be assembled within 30 days. Amedi, 58, is a career public servant who spent decades at the heart of Iraqi political life, previously serving as a senior aide to two former presidents and as environment minister between 2022 and 2024.Iraq has gone almost 150 days without a new government since the November elections.

JD Vance, the US Vice-President, has embarked on a high-stakes mission to Islamabad to negotiate a peace deal with Iran, a task that has been likened to a 'poisoned chalice.' Vance's challenge is to secure a durable peace between a rhetorical ceasefire and the resumption of hostilities.Vance, a vocal critic of US wars in the Middle East, now finds himself at the forefront of efforts to end the conflict. His presence at the talks, the highest-level meeting since the Iranian revolution of 1979, underscores the significance of this diplomatic push. However, Iran's negotiators feel emboldened by their recent successes, including control of the strategic Hormuz strait and their resilience in the face of a massive US-Israeli onslaught.The path to negotiations is fraught with hurdles. Iran has set conditions for talks, including the release of its blocked assets, a demand the US has not publicly agreed to. Mohammad Bagher Ghalibaf, Iran's parliamentary speaker, emphasized that these conditions must be met before negotiations can begin. This stance could complicate Vance's efforts to initiate meaningful dialogue.Vance's mission could have far-reaching implications for his potential presidential run in 2028. His credentials as a MAGA supporter have been questioned due to his less-than-enthusiastic approach to the war in Iran. The outcome of these talks could either bolster or undermine his political standing.Tehran's negotiators are known for their tireless and relentless bargaining style, which could put Vance under significant pressure. The US, while able to walk away from the negotiating table, cannot guarantee the free flow of marine traffic from the Persian Gulf, giving Iran key leverage over the White House. This dynamic could have profound implications for the global economy, particularly in terms of fuel shortages and supply chain disruptions.Before departing for Islamabad, Vance indicated that his team had received clear instructions from Donald Trump regarding the negotiations. He expressed a willingness to engage in good faith with Iran but warned against attempts to 'play' the US. The success of these talks remains uncertain, but their impact on global stability and Vance's political future is undeniable.

The recent ceasefire between the United States, Israel, and Iran has brought a fragile calm to the region, but experts warn that energy prices may take months to normalize. The conflict had a significant impact on global oil and gas supplies, particularly through the Strait of Hormuz, a critical waterway through which 20% of the world's oil and gas exports pass.Iran's response to US-Israeli attacks included choking off the Strait of Hormuz and attacking energy infrastructure in several Gulf countries. This led to soaring prices for energy and byproducts like helium, as well as fertilizers that rely on these inputs, affecting sowing seasons and consumers worldwide, especially in developing countries.Experts stress that a predictable and stable flow of cargo through the strait is needed before markets can stabilize. Currently, only a trickle of vessels are passing through, with five vessels crossing on Wednesday and seven on Thursday, down from 120-140 ships per day before the conflict.Rockford Weitz, a professor at The Fletcher School at Tufts University, described the situation as 'the biggest disruption in the history of global oil markets.' He emphasized that normalization will take time and requires collaboration among global powers and regional players.Additionally, concerns remain about Iran charging toll fees and skyrocketing insurance fees, which could keep oil prices high. However, experts agree that these fees are not the primary cost drivers.The International Monetary Fund (IMF) has warned of a looming inflation crisis and plans to downgrade its forecast for the world economy. Kristalina Georgieva, IMF managing director, stated that growth will be slower, even if the new peace is durable.For now, oil prices are expected to remain higher than pre-war levels due to the overhang of greater risk premium of supplies out of the Gulf. The situation remains uncertain, with experts closely watching for any side deals, such as a potential agreement between Iraq and Iran, which could impact oil production and prices.

US Vice President JD Vance has departed for Pakistan to engage in crucial talks with Iran, seeking to bring an end to the ongoing US-Israeli war. Vance expressed optimism about the negotiations, stating that he expects 'positive' results from the discussions.Vance's trip comes at a critical juncture, with the conflict showing no signs of abating. The US and Israel launched a war on Iran on February 28, which has resulted in significant damage to Iran's nuclear sites. President Donald Trump has given Vance clear guidelines for the meeting, emphasizing the need for a peaceful resolution.The talks in Pakistan will involve Iranian Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi. However, it remains unclear if any representative from Iran's Islamic Revolutionary Guard Corps (IRGC) will attend. The format of the negotiations and whether the US and Iranian officials will speak face-to-face or through intermediaries have not been disclosed.Trust issues remain a significant hurdle in the negotiations. Iran's Deputy Foreign Minister for Political Affairs, Majid Takht Ravanchi, expressed wariness about the talks, citing concerns that they could be used as a deception to cover renewed escalation in fighting. Iran seeks an agreement with guarantees that it will not be attacked again.The negotiations in Pakistan are seen as a critical step towards resolving the conflict. Both sides appear to be miles apart, with tremendous amounts of mistrust. However, according to Ali Vaez, the Iran project manager at the International Crisis Group, every option possible has been tried, and both sides have ended up in a lose-lose scenario. Vaez emphasized that it is essential for both sides to be practical and realize that concessions at the negotiating table are necessary to avoid further conflict.

The ongoing conflict between the US and Israel and Iran has significantly altered the dynamics of the nuclear programme negotiations. Former US envoys who dealt with Iran have stated that the US-Israeli attack on Iran and Tehran's subsequent closure of the Strait of Hormuz have given Iran new tools and resolve to resist pressure to shutter its nuclear programme.Two senior negotiators for the Joint Comprehensive Plan of Action (JCPOA), the Obama-era agreement to limit Iran's nuclear uranium enrichment in exchange for sanctions relief, said the Trump administration's war had handed Iran a coveted weapon by demonstrating its ability to cut off the Strait of Hormuz, an economic chokehold that one negotiator said would help Iran 'balance the asymmetry of power' with the US.Alan Eyre, a former diplomat who helped negotiate the JCPOA, noted that 'this administration, to say it more politely, cannot unsoil the bed. There's no way to get back to the status quo ante before this war started.'In 2018, Donald Trump withdrew the US from the JCPOA, which barred Tehran from enriching its uranium to weapons-grade. Trump called the deal 'one of the worst and most one-sided transactions' the US had ever entered into.However, after a strategy of high pressure – first through returning sanctions and then, after Trump's return to power in 2025, a war that was meant to destroy Iran's nuclear and ballistic missile capabilities – the current US administration has found itself in more complex negotiations than before its campaign of economic and military strikes.Robert Malley, a Yale lecturer who was former special envoy to Iran under Joe Biden and a lead negotiator on the JCPOA, said: 'The strait of Hormuz wasn't an issue before the US decided to strike. You have all the issues inherited from the past, but you just added a few, because the US has handed Iran a tool that it always had, but it never thought of using, or never felt it could.'The chances for a comprehensive agreement addressing all of the US and Iran's grievances appear slim. While the Obama administration sought to negotiate exclusively on Iran's nuclear programme in the lead-up to the 2015 agreement, the Trump administration has sought a broader deal limiting Iran's ballistic missiles programme and its support for regional proxies, such as Hezbollah in Lebanon and the Houthis in Yemen.

Japan's Prime Minister, Sanae Takaichi, announced on Friday that the country will release additional oil reserves early next month, equivalent to roughly 20 days' worth of oil, to ensure a stable supply of crude oil. This move comes as concern grows over energy shortages caused by the crisis in the Middle East.This will be the second time Japan has dipped into its strategic reserves since the US-Israel war on Iran started in February. Last month, Takaichi approved the release of 50 days' worth of oil, the government's biggest ever release, in an attempt to head off a spike in prices.Japan has enough oil in reserve to last 230 days, but it also imports 95% of its crude oil from the Middle East, most of which is transported through the Strait of Hormuz. The country is trying to secure oil from locations that do not ship via the Strait of Hormuz, amid uncertainty over whether the waterway will fully reopen after a two-week conditional ceasefire announced by Donald Trump this week.By May, Japan should be able to secure more than half of its oil imports via other routes, Takaichi said, although she did not provide details. The industry ministry has said that potential new sources for imports could include Yanbu on Saudi Arabia's Red Sea coast and the Port of Fujairah in the United Arab Emirates.The decision to tap into oil reserves for a second time came as pressure grew on Japan's government to resist US pressure to become militarily involved in the conflict. More than 100 demonstrations were held across the country on Wednesday, with protesters urging Takaichi to abide by the postwar constitution, which forbids Japan from using the threat or use of force as a means of settling international disputes.