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Economy May 21, 2026

The Economics of Hormuz: Calculating the Cost of Iran's Transit Toll

As the Strait of Hormuz remains closed eleven weeks into the Iran war, this analysis examines wheth…
The LeadEleven weeks after the start of the Iran war, the Strait of Hormuz has remained closed to naval traffic, bleeding the global economy far beyond the Gulf. Iran's Islamic Revolutionary Guard Corps (IRGC) maintains an iron grip over this narrow, strategic waterway, while a corresponding United States naval blockade on Iranian ports has failed to reopen it.Before the war began, between 120 and 140 ships travelled through the strait each day, about half of them oil tankers carrying some 20 million barrels of oil between them. Now, only a few vessels whose owners have negotiated with the IRGC are permitted to pass.The Strategic Control of HormuzOn Wednesday, Iran said it coordinated the transit of 26 vessels through the Strait of Hormuz in 24 hours, two days after announcing the formation of the Persian Gulf Strait Authority (PGSA), a new body to provide "real-time updates" on operations in the strait.Since the announcement of a temporary ceasefire between the US and Iran in April, Iran has been working on formalising a mechanism to charge a transit fee from ships crossing the critical chokepoint, through which 20 percent of the world's oil and liquefied natural gas (LNG) are shipped during peacetime.Tehran has reportedly already charged fees as high as $2m per ship for transit since the war started. Even though countries opposing Tehran say this is illegal, it may still be less expensive than the overall cost of the closure of the strait each day.The Economic Cost of BlockadeNearly one-fifth of global oil and LNG exports were shipped by Gulf producers through the Strait of Hormuz before the US and Israel bombed Iran on February 28, triggering the Iranian closure of the waterway. The strait is the only waterway linking Gulf producers to the open ocean – there is no other route through which they can ship exports.About 20.3 million barrels per day of oil passed through the Strait of Hormuz in peacetime – nearly 27 percent of global maritime oil trade. The lion's share of that crude went to Asian markets.Global LNG trade has been similarly hard hit. On the day before the war broke out, Brent crude – the global benchmark for oil prices – closed at $72.48 per barrel. After Iran closed the waterway on March 4 and began attacks on vessels attempting to sail through, traffic came to a standstill, stranding about 2,000 ships on either side of the strait.In terms of lost oil revenues, this amounts to $114.8bn of losses per day. About 10 billion cubic feet of LNG per day also used to pass through the strait, worth a further $7.8bn.The Cost-Benefit Analysis of Transit FeesFor hundreds of ships stranded in the Gulf with thousands of sailors on board, the cost of remaining anchored is steep, including crew wages, loan repayments, repair and management, coupled with inflated war risk premiums.In turn, Iran has reportedly been charging up to $2m for authorisation to pass. Experts say many will see this as worthwhile purely in terms of monetary cost."There is no doubt that paying Iran is cheaper than a continuous blockade because a sitting tanker bleeds money," said Nader Habibi, an Iranian American economist."It makes sense from an economic point of view, but it is not politically feasible," he added. "The companies are under pressure from the US sanctions and not to make arrangements with Iran. This is not just a purely economic cost-benefit analysis, but long-term considerations that are taken into account."International Legal PerspectivesInternational law protects free transit through strategic waters such as natural straits like Hormuz, barring countries from imposing passage tolls even where the waterways fall entirely into territorial waters, like in the case of Hormuz.However, services such as security controls, inspections and insurance regimes can be charged for. Chargeable fees also partly depend on whether a waterway is a man-made passageway or a natural one.These are three different precedents in maritime traffic flow:Panama Canal: An artificial waterway connecting the Atlantic and Pacific oceans. Vessels pass through a unique system of locks that raise and lower vessels across elevated terrain. Since Panama built, maintains and operates the canal, it can charge transit fees based on vessel size, cargo capacity and booking priority. These range from several hundred thousand dollars per transit to some slots sold for millions of dollars.Suez Canal: Another artificial canal, linking the Mediterranean and Red seas. Egypt charges transit fees for the use of canal infrastructure, maintenance and traffic management services through the narrow waterway. Container ships and oil tankers pay from several hundred thousand dollars to more than one million dollars per voyage.Turkiye's Bosporus Strait and Dardanelles: These are different because they are natural straits, rather than man-made canals. Turkiye charges for navigation-related services such as lighthouse operations, rescue readiness, medical support and traffic management – and tightly controls ship scheduling and navigation.Regional Cooperation PossibilitiesIran's newly-formed PGSA published a new map of Hormuz, stretching from Kuh-e Mubarak in Iran to south of Fujairah, in the UAE, at the eastern entrance of the strait, and from the tip of Qeshm Island to Umm al-Quwain at the western entrance.Given how the Iran war has spilled over into the Gulf region – with the UAE taking the brunt of Iranian strikes – economist Mohammad Reza Farzanegan said "regional cooperation with Iran is the most realistic path to stable transit through the Strait of Hormuz."The UAE, Oman, Qatar and Iran will have to work together because their economies require it, he argued. A workable arrangement could include a joint maritime authority, shared monitoring, emergency coordination, environmental protection and service-based contributions for maintaining safe passage."This would give Iran a recognised role in the security of the waterway while giving Persian Gulf economies more predictability," Farzanegan added. "Such a framework is also more realistic than relying on external military enforcement, which has been more a source of trouble for these states."The Future OutlookWhile it may seem that the economics of the closure of the strait are currently skewed towards Iran, Aniseh Tabrizi, an associate fellow on the Middle East and North Africa Programme at think tank Chatham House, noted that "the economics by itself is not going to be the driver to change calculation or move from the current standpoint."She emphasized that Iran and the US need to reach a "diplomatic compromise, with other calculations linked in to the economic factor", before there can be an end to the energy supply crisis.Farzanegan added that if the world expects stable access to the Strait of Hormuz, then paying Iran could well be accepted as the price of keeping the vital waterway predictable. "From an economic perspective, a negotiated transit arrangement [with Iran] now makes more sense than continued closure," he concluded.
#Iran #Strait of Hormuz #Oil Prices
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World Wide May 21, 2026

Ebola Spreads to Conflict Zones: The Postponement of the India-Africa Forum Summit

The Indian government and the African Union have postponed the upcoming India-Africa Forum Summit d…
The upcoming India-Africa Forum Summit has been officially postponed by the African Union and India, marking a significant shift in diplomatic priorities as the Democratic Republic of the Congo battles a resurgence of the Ebola virus.Conflict Zones Complicate the Ebola ResponseThe outbreak has reached South Kivu province, a region currently under the control of the M23 rebels. This development is critical because the area, including the provincial capital Bukavu, is densely populated and difficult to access due to ongoing military conflict. The M23 group, backed by Rwanda, has stated their commitment to working with international partners, yet the presence of the virus in their territory poses a severe logistical challenge for health workers.Alarming Statistics from the WHOAccording to the World Health Organization, this is the 17th outbreak in the DRC. Current figures indicate 600 suspected cases and 139 deaths. The virus has also crossed borders into Uganda, raising the stakes for regional containment. The WHO has declared this an international emergency, signaling that the virus is no longer just a local health crisis but a global threat.Geopolitical Fallout and Aid ShortagesThe postponement highlights the fragility of international cooperation when health crises intersect with political instability. Furthermore, the response is hampered by a sharp decline in foreign aid, particularly from the United States, which has led to shortages of essential supplies for first responders. The decision to delay the summit reflects a recognition that diplomatic engagement is less effective when the health security of the participating nations is compromised.A Long Road to ContainmentThe presence of the virus in rebel-controlled territories suggests that the outbreak will be difficult to contain without a ceasefire. The rescheduling of the India-Africa Summit underscores that public health emergencies often supersede diplomatic agendas, potentially delaying economic cooperation until the crisis stabilizes.
#India #Africa #Ebola
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World Wide May 21, 2026

Mauritania’s Female Islamic Guides Lead the Fight Against Extremism

Mauritania has deployed state‑trained female Islamic guides, known as mourchidates, to counter viol…
Mauritania has turned to an unconventional counter‑terrorism tool: women trained in Islamic scholarship who work in schools, prisons and community centres to undermine extremist narratives. Since the Ministry of Islamic Affairs launched the mourchidates programme in 2021, the country has avoided the large‑scale attacks that have ravaged its Sahel neighbours. The State‑Backed Religious Guidance Model The mourchidates are certified by the state, receiving formal training in Quranic interpretation, Islamic jurisprudence and social counselling. Their role mirrors Morocco’s programme launched after the 2003 Casablanca bombings, but Mauritania has expanded their deployment to every region of the country. Training includes theological study and community‑engagement techniques. Guides operate under the Ministry of Islamic Affairs, ensuring official backing. They address both extremist ideology and the socio‑economic factors that fuel radicalisation. Prison as a Battleground for Ideas In Mauritanian prisons, mourchidates sit with detainees linked to Sahel armed groups, challenging the theological justifications for violence point‑by‑point. By offering alternative readings of Islamic texts, they create space for detainees to reconsider violent paths. Preventive Outreach in Communities Beyond prisons, the guides travel to schools, youth centres, mosques and markets, delivering lessons on tolerance, charity and accountability. Their presence aims to intercept radicalisation before it takes root, especially among unemployed youth vulnerable to extremist recruitment. Impact on Regional Stability While exact metrics are scarce, Mauritania’s relative calm compared with Mali, Burkina Faso and Niger is widely attributed to this holistic approach. Analysts cite the programme as a case study in combining intelligence, community trust and religious reform to blunt extremist growth. Future Outlook and Replicability Critics note limited resources and question whether the model can be exported to other Sahel states where state‑society trust is weaker. Nonetheless, the success of the mourchidates suggests that investing in credible, female religious leadership could become a cornerstone of non‑military counter‑terrorism strategies across the region.
#Mauritania #Mourchidates #Sahel
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Economy May 21, 2026

UK Services PMI Plummets to Decade‑Worst Level Amid Political and Geopolitical Turmoil

The S&P Global services PMI fell to 48.5 in May, the sharpest decline in a decade, reflecting a per…
The latest S&P; Global purchasing managers' index shows UK services activity slipping to a 48.5 reading in May, marking the steepest drop in a decade and signalling a broader economic slowdown.Sharp Drop in UK Services PMI Marks Decade‑Worst DeclineIndex fell to 48.5 in May, down from 52.6 in April.Lowest reading since January 2021 and the lowest since July 2016 when Covid data are excluded.Services sector accounts for roughly 80% of UK GDP.PMI Numbers Reveal Contraction Below Growth ThresholdThe composite output index, which blends manufacturing and services data, dropped below the critical 50‑point mark, indicating contraction. Economists had forecast a reading of 51.6, making the actual figure notably worse.Payrolls fell for the 20th consecutive month, echoing ONS data that showed a loss of 100,000 payrolled employees in April.Manufacturing showed a modest rebound, hitting a three‑month high as firms front‑loaded orders.Broader Economic Implications for GDP and Monetary PolicyAndrew Wishart of Berenberg warned that a sustained PMI slump could push quarterly GDP growth from 0.6% in Q1 to -0.2% in Q2. Meanwhile, the Bank of England may keep its policy rate at 3.75% after recent inflation data showed a slowdown to 2.8% in April and wage growth easing to 3.4%.Outlook: Potential Further Slowdown Amid Geopolitical TensionsAnalysts attribute the downturn primarily to the ongoing Iran war and heightened uncertainty around Keir Starmer's leadership. If these pressures persist, the services sector could see continued job cuts and reduced spending, while manufacturers may face tighter order books, as noted by the CBI.Overall, the flash PMI suggests a cautious near‑term outlook for the UK economy, with policymakers likely to adopt a wait‑and‑see stance on interest‑rate adjustments.
#UK services sector #S&P Global PMI #Keir Starmer
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Business May 21, 2026

Chinese and Iranian Companies Capitalize on Russia's Occupation of Ukrainian Regions

Chinese and Iranian companies are increasingly operating in Russian-occupied Ukrainian regions, wit…
The LeadChinese and Iranian companies are increasingly establishing economic footholds in Russian-occupied Ukrainian regions, particularly in Donetsk and Luhansk, despite international sanctions and Ukraine's territorial integrity concerns. This growing economic integration, described by analysts as "shadow integration," involves Chinese firms supplying construction equipment and telecommunications infrastructure while Iran integrates the occupied territories into its logistical chains.Chinese Companies Establish Economic PresenceIn November 2023, representatives of two Chinese companies signed a deal to supply stone-crushing machinery for construction projects in what they called the "People's Republic of Donetsk," a Russia-backed separatist statelet in southeastern Ukraine. The companies, identified as Zhongxin Heavy Industrial Machinery and Amma Construction Machinery, supplied equipment to the Karansky quarry in the southern Donetsk region, with the crushed stone being used for construction projects in Russia-occupied areas.According to the Eastern Human Rights Group (EHRG), a Ukraine-based think tank, at least 17 Chinese companies operate in the occupied areas, with almost 6,000 Chinese-made relay stations for cellphone connections installed there. Chinese firms are involved in mining, construction, telecommunications equipment supply, and financial services."As Russia integrates its power in the occupied areas and transfers politicians to occupation administrations, Chinese companies carry out another replacement, but in the economy," said Maksym Butchenko from the EHRG.The Economic Transformation of Occupied RegionsThe occupied regions' economy has undergone significant changes since 2014. Out of 94 coal mines that operated in Donetsk and Luhansk (collectively known as the Donbas) before the conflict, only five remain open. The remaining mines "completely reoriented towards working with China and Russia," according to Butchenko.Furthermore, the occupied regions' economy is "totally yuanised" as local businesses use Chinese electronic payment systems through Telegram channels that offer currency exchange and transfers. The yuan is now sold in 79 banks in the occupied areas, creating a financial ecosystem increasingly dependent on China."This is a threatening precedent from the viewpoint of international politics and law because this violates international agreements," Butchenko stated, calling China's approach "shadow integration."Iran's Strategic Economic PartnershipsMoscow reportedly encourages the occupied regions to develop ties with Iran, creating another layer of economic integration beyond China. Tehran buys grain and coal from the occupied territories and "integrates the economy of occupied Donbas into its own logistical chains created after decades of isolation," according to the EHRG.Donskiye Ugli, a Russian coal mining company operating "nationalized" mines in Donetsk and Luhansk, ships the fossil fuel to Iran, according to separatist official Andrey Chertkov. Additionally, local food producers in the occupied territories have begun supplying casein, a milk protein, to Iran."The Kremlin not only gives permission to Iranian companies to enter the occupied areas' market but also encourages them," Butchenko explained, highlighting Russia's active role in facilitating these economic partnerships.International Response and Future ImplicationsBeijing maintains its official position of supporting Ukraine's territorial integrity while calling the Russia-Ukraine war a "crisis." However, unofficially, Chinese companies have "almost captured the entire market in the occupied areas," according to Butchenko.Kyiv has sanctioned Chinese companies operating in the occupied regions, including Alibaba and the China National Petroleum Corporation, and urges Western nations to follow suit. Despite these sanctions, Chinese companies continue to operate, often offering lower prices and technical expertise that is difficult to replace."China is here for good," a business owner in Donetsk told Al Jazeera. "All new equipment here is Chinese from machine tools to ventilators." This growing economic presence, combined with Iran's increasing involvement, suggests that the economic integration of these occupied territories with China and Iran will continue to deepen, potentially creating long-term challenges for Ukraine's territorial integrity and for international efforts to isolate Russia economically.
#China #Iran #Russia
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Politics May 21, 2026

What Options Do the US and Iran Have Left to End Their Conflict?

The United States and Iran are at a diplomatic impasse as of 21 May 2026, with both sides facing mo…
As of 21 May 2026, the United States and Iran remain locked in a dangerous confrontation that threatens regional stability. With diplomatic channels frayed and military posturing intensifying, both sides are weighing a shrinking set of options to avoid a broader war.Escalating Diplomatic Stalemate Between Washington and TehranWashington has renewed secondary sanctions targeting Iran's oil export infrastructure, aiming to choke revenue streams.Tehran responded with a series of missile tests and a public vow to resume uranium enrichment beyond the limits of the 2015 nuclear agreement.Back‑channel talks mediated by the European Union stalled after the U.S. demanded a complete freeze on Iran's ballistic program.Economic Levers and Military Costs: The Numbers Behind the ConflictU.S. sanctions are projected to cut Iranian oil earnings by 30%, reducing annual revenue by roughly $15 billion.Iran's defense budget for 2026 is estimated at $12 billion, a 5% increase over the previous year.U.S. Central Command reports a forward deployment of 5,000 troops in the Gulf region, adding an operational cost of about $1.2 billion per month.Regional Ripple Effects: How the Standoff Shapes the Middle EastOil prices have hovered around $85 per barrel, up 7% since the sanctions round‑up, pressuring economies from Saudi Arabia to Egypt.Neighboring Iraq and Syria face heightened security risks as proxy militias receive increased funding from Tehran.Humanitarian agencies warn of a potential surge in refugee flows if hostilities expand into the Strait of Hormuz.Paths Forward: Scenarios for De‑escalation and Their LikelihoodRenewed Multilateral Negotiations: A EU‑led framework could restore the nuclear deal if Iran halts enrichment, but U.S. domestic politics make concessions uncertain (30% likelihood).Targeted Economic Incentives: Offering limited sanctions relief in exchange for verifiable freeze on missile production could create a narrow win‑win (45% likelihood).Escalation to Limited Military Strikes: Both sides retain the option of calibrated strikes, which would raise the risk of a broader regional war (25% likelihood).
#United States #Iran #Middle East
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Environment May 21, 2026

Severe Flooding in Southern China Destroys Infrastructure, Washes Away Vehicles

Severe flooding in southern China has caused significant damage, washing away cars and destroying a…
The LeadSevere flooding in southern China has caused significant infrastructure damage, including the destruction of a bridge and the washing away of multiple vehicles. The event underscores the increasing challenges posed by extreme weather events in the region.The Event DetailsThe flooding, which occurred in southern China, has resulted in a bridge being completely destroyed and numerous cars being washed away by the powerful currents. Emergency services are responding to the situation, though the full extent of the damage is still being assessed.The Impact AnalysisThis natural disaster highlights the vulnerability of infrastructure in southern China to extreme weather events. The region has experienced increased precipitation patterns in recent years, leading to more frequent and severe flooding incidents that threaten public safety and economic stability.The PredictionGiven the changing climate patterns, southern China can expect more intense rainfall events in the coming years. This will likely necessitate significant investments in improved infrastructure designed to withstand extreme weather conditions, including elevated roads, flood-resistant bridges, and enhanced early warning systems.
#China #Flooding #Natural Disaster
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Politics May 21, 2026

China‑Pakistan ‘Iron Brothers’: 75 Years of Strategic Alliance

On May 21, 2026, China and Pakistan commemorated 75 years of diplomatic ties, a relationship rooted…
Islamabad and Beijing marked 75 years of diplomatic ties on May 21, 2026, reflecting a relationship forged in shared rivalry with India and reinforced by strategic land swaps, nuclear collaboration, and massive infrastructure projects. While official rhetoric celebrates “iron brothers” and “all‑weather friendship,” analysts argue that structural complementarity, not ideological affinity, has kept the partnership resilient. The 1963 Shaksgam Valley Transfer: Cementing Early Trust In March 1963 Pakistan ceded the 5,180 sq km (2,000 sq mi) Shaksgam Valley to China, a move that gave Beijing control over a strategically sensitive segment of the Karakoram range. The deal, negotiated by Zulfikar Ali Bhutto as foreign minister, was driven by Pakistan’s desire to counterbalance India after the 1962 Sino‑Indian war. Numbers that Define the Bond: Land, Infrastructure, and Nuclear Milestones 75 years of formal diplomatic relations (1950‑2025). 5,180 sq km of territory transferred in 1963. 3,000 km (1,900 mi) China‑Pakistan Economic Corridor (CPEC) linking Gwadar to Xinjiang. 1998 nuclear tests in Chagai, with documented Chinese technical assistance in the 1970s‑80s. Four‑day state visit by Shehbaz Sharif scheduled for May 23 2026. Strategic Ripple Effects: Regional Power Balance and the US‑China Channel The alliance gave Pakistan a powerful counterweight to India and positioned it as a back‑channel for the 1972 US‑China rapprochement, when Henry Kissinger used a Pakistani flight to Beijing. While the United States benefited from the diplomatic breakthrough, Pakistan received limited material reward, underscoring the asymmetrical nature of great‑power mediation. Economic Integration: CPEC and the Emerging All‑Weather Partnership Since 2015, the CPEC has become the flagship of the partnership, delivering highways, energy projects, and the Gwadar deep‑sea port. Analysts note that the economic dimension has shifted the relationship from a purely security‑driven pact to a multi‑layered interdependence, yet debt sustainability and regional security concerns remain contentious. Looking Forward: Scenarios for the Next Decade of China‑Pakistan Relations Experts anticipate three possible trajectories: Deepening convergence: Expanded defence co‑production and a broader Belt‑and‑Road footprint. Transactional plateau: Continued CPEC maintenance without major new initiatives, as both sides manage domestic pressures. Strategic strain: Escalating India‑China tensions or US policy shifts could force Pakistan to recalibrate its alignment. Regardless of the path, the “iron brothers” narrative will likely persist as a diplomatic shorthand for a partnership that has survived ideological divides and shifting global orders.
#Pakistan #China #CPEC
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Entertainment May 21, 2026

Marcia Hutchinson’s ‘The Mercy Step’ Earns Women’s Prize Shortlist Spot

Debut novelist Marcia Hutchinson secures a place on the 2026 Women’s prize for fiction shortlist wi…
The Lead: Hutchinson’s Debut Secures Women’s Prize ShortlistDebut author Marcia Hutchinson has been shortlisted for this year’s Women’s prize for fiction with her novel The Mercy Step, a raw yet witty portrayal of a young Black girl growing up in 1960s Bradford.Bradford’s Windrush Legacy Shapes the StoryHutchinson was born in late 1962 to Jamaican parents in Bradford, a city that welcomed thousands of Windrush migrants from 1948.The novel reflects the racism, hostile weather, and inadequate housing that many Caribbean families faced during post‑war reconstruction.Bradford’s mill‑town backdrop provides the socioeconomic pressure that fuels the narrative’s tension.Linguistic Fusion: Jamaican Patois Meets Yorkshire DialectThe author blends Jamaican patois, Yorkshire dialect, and a “Speaky‑Spokey” RP, creating a distinctive voice that mirrors Mercy’s mixed cultural identity. This linguistic collage is highlighted in a pull‑quote praising Hutchinson’s seamless mix of language.Abuse, Resilience, and Early Political AwakeningThrough Mercy’s eyes, the novel depicts domestic abuse, coercive control, and hospitalisation, yet it never sinks into despair. A pivotal moment occurs when Mercy and her classmates assert their Black identity, echoing the 1968 Olympic Black Power salute.Critical Reception and Prize ImplicationsShortlisted for the 2026 Women’s prize for fiction, positioning Hutchinson as a notable new voice in British literature.Published by Cassava Republic at a price of £10.99.Review notes occasional “odd similes” and “vignette‑like” sections but praises the tight timeframe and empowering conclusion.Future Outlook for HutchinsonWith the shortlist boost, Hutchinson is poised for greater visibility, potential translation deals, and a stronger platform to explore further stories rooted in the Windrush experience and Black British resilience.
#Marcia Hutchinson #The Mercy Step #Women’s prize for fiction
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