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The Standoff Between US and Iran President Donald Trump says the United States will continue its naval blockade of Iran until a nuclear deal is reached with Tehran. The US president told Axios on Wednesday that he does not want to end his blockade on Iranian ports, apparently rejecting the reopening of the Strait of Hormuz so that US-Iran talks could proceed. Iran's Response to the Blockade Iran has set lifting the siege as a precondition for returning to the talks. According to several media reports, Iran offered a limited deal this week that would end its own blockade on Hormuz in exchange for the end of the siege on its ports. Trump's comments on Wednesday indicate that he turned down the Iranian proposal. Economic Impact of the Blockade The blockade has sent oil prices soaring, fuelling energy inflation in the US, where the price of one gallon of petrol has surpassed $4.22 ($1.11 per litre) – up from less than $3 ($0.79 per litre) before the war. The international benchmark Brent crude oil futures jumped to more than $119 per barrel on Wednesday as Washington and Tehran escalated their rhetoric. Future Outlook Iranian Parliament Speaker Mohammad Bagher Ghalibaf said on Wednesday that the US is trying to “activate economic pressure and internal division” in the country “to weaken or even collapse us from within”. He promised that Iranians “will defeat this deceptive plan of the enemy” and “achieve a brilliant victory” in the war. Separately, an unidentified senior security source told Iran’s state-owned Press TV that the blockade will soon be met with “practical and unprecedented action”.

The Federal Reserve's Decision The US Federal Reserve left interest rates unchanged after its latest board meeting, defying once again Donald Trump's call for a cut as the central bank prepares for a leadership shake-up next month. Reasons Behind the Decision Fed officials continued to cite elevated inflation, slow job growth and uncertainty in the Middle East as reasons why rates were left untouched. Inflation is elevated, in part reflecting the recent increase in global energy prices. Jobs gains have remained low, on average, and the unemployment rate has been little changed in recent months. The Impact of Global Events Brent crude oil, the global benchmark, briefly hit $119 a barrel on Wednesday, a monthly high and a 7% jump over the course of a day as uncertainty around the war in Iran looms. Leadership Shake-up at the Fed The Fed's meeting ended hours after the US Senate banking committee confirmed former Fed governor Kevin Warsh, clearing a procedural path for the whole Senate to confirm him as new chair of the central bank. Warsh is expected to be more amenable to Trump's calls for a rate cut than current chair Jerome Powell, who has been the target of hostile attacks toward himself and the central bank over its rates agenda. The Future Outlook Questions still remain over whether Powell will stay on the Fed board after his term ends 15 May. Powell can stay on the board until his term as a Fed governor is up in 2028. Economists largely agree that an independent central bank is essential for a stable economy.

US Gasoline Hits $4.23: A New Post‑War HighAverage US gasoline prices have climbed to $4.23 per gallon, the highest level since 2022 and the first record set after the war with Iran began, according to AAA.Hormuz Blockade Threats Push Brent Crude Above $114 a BarrelThe benchmark Brent crude is trading at $114.60 a barrel, up nearly 25% from its mid‑April low, as U.S. officials consider an extended blockade of the Strait of Hormuz, a chokepoint for roughly 20% of global oil flows.Transits this week: 35 ships (down from 78 the previous week).Pre‑war daily average: around 130 ships.Price Surge Quantified: 25% Rise in Brent, 34% Jump in US Pump PricesUS pump price a year ago: $3.16 per gallon.Current Brent price: $114.60 per barrel (+25%).Jet fuel in Europe up 84% since Feb 28.Jet fuel globally up > 70% since the conflict began.Broader Economic Ripples: From Consumer Confidence to Airline CostsDespite the surge, the Conference Board reported a four‑month high in US consumer confidence for April, though vacation plans are shrinking and driving holidays are at their lowest since 2020.Airlines face mounting pressure: the International Air Transport Association’s Willie Walsh warned of possible fuel rationing in Asia and Europe, while carriers are already raising fares and trimming routes.In the Middle East, the United Arab Emirates announced its exit from OPEC, a move praised by Donald Trump as a blow to the cartel’s pricing power.Outlook: Potential Rationing and Market Volatility AheadAnalysts at Bank of America caution that higher gasoline and oil costs could spill over into groceries and utilities, even though evidence is limited so far.With the Hormuz strait at its lowest traffic level since the war and geopolitical tensions persisting, markets may see continued price volatility, possible fuel rationing, and further strain on inflation‑sensitive sectors.

The Escalating Iran Conflict on Day 61 US President Donald Trump declares Iran is in a "state of collapse" while the United Arab Emirates announces its exit from OPEC after nearly 60 years of membership. The conflict continues to escalate with Israeli strikes in Lebanon killing three emergency workers, described by Lebanese President Joseph Aoun as a "war crime." Gulf leaders meeting in Saudi Arabia call on Tehran to rebuild trust after "treacherous" regional attacks, while Yemen's Houthi rebels voice support for Iran and threaten to shut the Bab al-Mandeb Strait. Geopolitical Shifts in the Middle East Iran's Military Claims: Iran's army spokesman Mohammad Akraminia announced that Iran's air force carried out strikes on "enemy bases" across the region, penetrating US-designed defenses and claiming more than 170 aircraft were hit during the six weeks of war. He warned that any renewed aggression would face "a more crushing response than before," noting Iran has "many winning cards that we have not yet used." UAE's Historic Exit from OPEC: The United Arab Emirates announced it will exit OPEC on Friday, ending decades of membership in the oil-producing cartel. This move comes as Gulf Arab countries rejected Tehran's "illegal actions" to close the Strait of Hormuz and endanger shipping, with leaders calling for restoring "security and freedom of navigation" to pre-war levels. Gulf States Condemn Iran: Meeting under the Gulf Cooperation Council in Saudi Arabia, regional leaders warned against any disruption or transit fees in the Strait of Hormuz, pushing for deeper military integration to counter perceived threats from Iran. Economic Fallout and Market Reactions US Treasury's Assessment: Treasury Secretary Scott Bessent revealed that US measures targeting Iran's shadow banking, crypto access, and oil networks have hit revenues and weakened its economy. The blockade is pushing Kharg Island near capacity and could force production cuts costing about $170 million a day. Global Market Impact: Crude prices surged after Trump signaled he may reject Iran's proposal to reopen the Strait of Hormuz, with Brent crude for June delivery climbing about 2.8 percent to reach $111.26 per barrel. Qatar warned the crisis could turn into a prolonged "frozen conflict," weighing on equities worldwide. Regional Instability and International Reactions Trump-Merz Diplomatic Clash: President Trump lashed out at German Chancellor Friedrich Merz after comments that Tehran is "humiliating" Washington at the negotiating table. Merz stated that "the Americans obviously have no strategy," to which Trump responded that the chancellor "thinks it's OK for Iran to have a nuclear weapon." Houthi Support for Iran: Yemen's rebels condemned US "piracy," voiced support for Iran, Lebanon, and Palestine, and warned they could shut the Bab al-Mandeb Strait as tensions escalate in the region. EU Criticism: EU lawmaker Marc Botenga criticized the EU for considering sanctions over alleged trade in Ukrainian grain linked to Russia, but not over actions in Gaza, questioning why measures target "stolen grain" rather than alleged war crimes. Israeli-Lebanon Escalation: Israeli "double-tap" strikes killed five people in south Lebanon, including three medics, with Prime Minister Nawaf Salam calling it a "war crime." Israeli forces have continued air strikes, shelling, and demolitions, while Hezbollah has stepped up drone attacks and rocket fire, highlighting fragile ceasefire conditions. Future Outlook and Potential Scenarios Despite reports that Iran has offered to reopen the Strait of Hormuz in exchange for delaying nuclear negotiations, the US is said to oppose postponing those talks, leaving the situation in limbo even as a ceasefire holds for now. Trump's claim that Iran is in a "state of collapse" appears aimed at pressuring Tehran back to talks as Washington maintains its red line on preventing a nuclear weapon. Meanwhile, the UAE's exit from OPEC signals a significant shift in global oil dynamics that could reshape the energy landscape for years to come, particularly if other Gulf states follow suit or realign their strategic priorities in response to the ongoing conflict.

The Stalemate in US-Iran Talks The conflict between the US and Iran has entered its 60th day, with no end in sight. Negotiations have stalled, and experts warn of long-term disruptions to global trade and the economy. The US and Israel launched their attack on Iran on February 28, leading to Tehran's retaliation by closing off the Strait of Hormuz, a critical waterway for oil and gas exports. The Impact on Oil Prices Oil prices have surged, with WTI crude reaching $100.09 and Brent crude trading at $111.85. This has led to the highest average price of petrol in the US in nearly four years, with prices reaching $4.18 a gallon. The consumer price index has also risen to 3.3 percent on an annual basis, driven by a jump in energy prices. The Data Analysis 20% of the world's oil and gas exports pass through the Strait of Hormuz Oil prices have increased by 49% (WTI) and 53% (Brent) since the start of the conflict The US economy is expected to see a GDP growth downgrade to 1.9% from 2.8% The Impact Analysis The ongoing conflict is expected to have a prolonged impact on the global economy, with rising inflation and decreased GDP growth. The higher oil price, along with rising prices for petrol, fertilisers, and agricultural commodities, is expected to push up global inflation. The conflict will also have consequences in the upcoming midterm elections in November, with President Trump's approval ratings trending lower. The Prediction Experts predict that the conflict will lead to long-term disruptions in global trade, with companies looking to rejig their supply sources. The global economy is expected to see a GDP growth forecast downgrade, with Oxford Economics lowering its world GDP growth forecast by 0.4 percentage points to 2.4%. The Brent oil price is expected to average around $113 per barrel in the current quarter before falling to just under $80 per barrel by the end of this year.

On Tuesday, April 28, 2026, the United Arab Emirates confirmed its decision to withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the broader OPEC+ framework, with the exit set to take effect on May 1, 2026. The Gulf state, which contributes roughly 4.8 million barrels per day of spare capacity, cited “national interests” amid an escalating US‑Israel‑Iran conflict. UAE’s Formal Exit and the Mechanics of Withdrawal The announcement marked the end of a membership that began in 1967. The UAE’s statement outlined a straightforward hand‑over process, allowing OPEC to re‑allocate its quota without disrupting the cartel’s production schedule. April 28, 2026: UAE issues withdrawal statement. May 1, 2026: Withdrawal becomes effective. OPEC to adjust the collective quota to reflect the loss of 4.8 mb/d from the UAE. Quantifying the Loss: Production Capacity and Global Share While the UAE’s daily output is modest compared with the cartel’s total, its spare‑capacity role has been strategically valuable. UAE capacity: ~4.8 million barrels per day (mb/d). OPEC’s global share: ~30 % of world oil supply. OPEC+’s global share: ~41 % of world oil supply. Potential reduction in OPEC+ spare capacity: ~1.5 % of global supply. Geopolitical Ripple Effects Across the Gulf and Global Oil Cartel The departure underscores a broader realignment in Gulf politics. Tensions with Saudi Arabia over Yemen and divergent foreign‑policy priorities have pushed Abu Dhabi toward deeper ties with the United States and Israel, especially after the 2020 Abraham Accords. The move also signals to other members that national‑interest calculations can outweigh collective cartel discipline. Potential strain on Saudi‑UAE coordination within OPEC. Increased likelihood of the United States influencing OPEC+ output decisions. Historical precedent: Indonesia (2009), Qatar (2019), Ecuador (2020) withdrew over quota disputes. Outlook: How OPEC+ Might Recalibrate and What Prices Could Do Analysts expect OPEC+ to seek a swift quota reallocation to preserve market stability. If the group compensates the shortfall with higher output from existing members or by tightening overall production, Brent crude could see a short‑term price uptick of 1‑2 %. Conversely, a prolonged lack of consensus may fuel volatility, especially as the region navigates the ongoing US‑Israel‑Iran confrontation. Short‑term (3‑6 months): Possible price rise of 1‑2 % if OPEC+ tightens quotas. Medium‑term (6‑12 months): Market may adjust to a new baseline with reduced spare capacity. Strategic implication: OPEC+ may deepen cooperation with non‑member producers (e.g., Russia) to offset the UAE’s exit.

The Surge in US Gas Prices US gas prices rose to their highest level in four years on Thursday, reaching an average $4.18 a gallon at the pump as US-Israeli peace talks with Iran remain at a standstill. Historical Context of Gas Prices The last time average US gas prices breached $4.15 a gallon was in April 2022, when oil prices soared shortly after Russia invaded Ukraine. Average gas prices are now $1 higher than just a year ago, when they were closer to $3.15 a gallon. Regional Variations in Gas Prices Average gas prices vary heavily by states, with oil-producing states seeing averages as much as $2 a gallon lower than states that import gas. In Texas, gas is $3.72 a gallon while California sees an average of $5.96 a gallon. The Impact of Oil Prices By Tuesday morning, Brent crude, the global benchmark, hit $111 a barrel, lower than its high of $119 a barrel that was seen last month but nearly 60% higher than averages seen before the start of the war. WTI crude, the US benchmark, was near $100 a barrel on Tuesday morning. The Role of Geopolitics Oil prices went up on Tuesday after news that negotiators remain gridlocked over talks to reopen the strait of Hormuz, where a fifth of the world’s oil and natural gas would typically pass through. Donald Trump reportedly told advisers on Monday he is not happy with Iran’s proposal to reopen the strait, which would require the US to end its own naval blockade of the strait and does not address a nuclear deal. The Future Outlook Higher oil prices have been a boon for western oil companies, which have found themselves with an advantage over their competitors in the Middle East that have been affected by the war. BP on Tuesday said that its profits had more than doubled in the first quarter of the year, reaching $3.2bn (£2.4bn).

The UAE's Shocking Exit from Opec The United Arab Emirates has quit the Opec oil cartel in a heavy blow to the group and its de facto leader, Saudi Arabia, amid the global energy shock caused by the Iran war. Reasons Behind the UAE's Decision The UAE's energy ministry said that the constraints on the strait of Hormuz meant the decision to leave would not have a huge effect on the market. Leaving Opec will give it greater “flexibility” and was in line with its “long term strategic and economic vision”, he said. Impact on Opec and the Oil Market The UAE's departure will come into effect on Friday. The move came after the UAE, a regional business hub and one of Washington’s most important allies, criticised fellow Arab states for not doing enough to protect it from numerous Iranian attacks during the war. The Brent crude oil price has reached as high as $119.50 a barrel since the outbreak of the war in Iran. On Tuesday, it rose 3.4% to $111.67. Future Implications for Opec Jorge León, an analyst at Rystad, said: “The UAE withdrawal marks a significant shift for Opec. Alongside Saudi Arabia, it is one of the few members with meaningful spare capacity – the mechanism through which the group exerts market influence. “While near-term effects may be muted given ongoing disruptions in the strait of Hormuz, the longer-term implication is a structurally weaker Opec.”

Closure of the Strait of Hormuz and Its Immediate Economic Shock Since the US‑Israel war on Iran began nine weeks ago, the narrow waterway linking Gulf producers to the open sea has been effectively sealed. The shutdown has disrupted the flow of 20% of the world’s oil and liquefied natural gas, leaving ~2,000 ships stranded and stoking fears of a global recession. February 28 2026 – Iranian strikes kill Supreme Leader Ayatollah Ali Khamenei. April 11 2026 – US President Donald Trump announces a naval blockade of the strait. April 21 2026 – Pentagon estimates six months to clear all Iranian‑laid mines. Rising War‑Risk Premiums and Shipping Costs Maritime insurers, having cancelled “war‑risk” coverage in March, now quote premiums of 0.25%–5% of hull value, a twenty‑fold increase over pre‑war levels. For a vessel with a $100 million hull, the cost jumps from roughly $250,000 to as much as $5 million per transit. Pre‑war premium: ≈0.25% of hull value. Current premium range: 1%–5%, with outliers higher. Key insurers: NSI Insurance Group (Florida), Vessel Protect (London), BIMCO. Broader Implications for Global Energy Markets and Trade The International Energy Agency calls the disruption “the largest oil supply shock in history,” eclipsing the 1970s oil crises. Higher shipping costs feed into global oil prices, pressuring economies already vulnerable to inflation. Moreover, the lingering mine threat and uncertain navigation rules deter not only insurers but also shipowners, limiting the volume of traffic that can safely use the alternative coastal routes near Iran and Oman. Potential price impact: upward pressure on Brent crude and LNG contracts. Supply chain risk: delayed deliveries for India, Pakistan, Turkey, China – the main users of the strait. Strategic leverage: Iran uses the chokepoint as bargaining power in negotiations. Path to Restoring Safe Passage – What Must Happen Insurers and maritime experts agree that a durable cease‑fire or political settlement is the baseline requirement. Additional conditions include: Verified clearance of all mines – likely six months of coordinated US and allied effort. Explicit, multilateral guarantees of freedom of navigation. Consistent, transparent vessel‑approval processes by Iranian authorities. Sustained, unimpeded traffic over weeks to rebuild market confidence. Until these criteria are met, premium levels will remain elevated and the strait will continue to function as a high‑risk corridor rather than a reliable artery for global energy trade.