AGP Executive Report

Iran-US De-escalation Watch: Trump said an Iran strike is “on hold” at the request of Gulf leaders, easing oil pressure after days of whipsawing markets—while Tehran’s new peace proposal asks for an end to hostilities, US force withdrawal near Iran, reparations, sanctions relief, and lifting a marine blockade. Energy Shock: The Strait of Hormuz disruption keeps fuel costs front and center: India raised petrol and diesel again for the second time in a week, and Japan is even worrying about naphtha shortages as the war strains supplies. Markets & Inflation: UBS warned the Middle East conflict could slow Switzerland’s economy and lift inflation; the IMF expects the UK to grow only 1% in 2026 as energy costs bite. Regional Security: Israel allocated NIS 2b to counter Hezbollah’s fiber-optic drone threat, while G7 finance ministers discussed fallout from the Iran war. Humanitarian & Diplomacy: Pakistan and nine countries condemned Israel’s renewed assaults on the Global Sumud Flotilla, calling them violations of international law.

Iran-US Tensions: Trump says he’s called off a planned Tuesday strike on Iran after requests from Gulf leaders, while warning the U.S. is ready for a “full, large-scale assault” if talks fail. Oil Shock: Markets slid as oil climbed on renewed Gulf supply fears; Strait of Hormuz remains effectively shut to most shipping, keeping inflation worries front and center. Lebanon/Israel Front: Fighting continues despite a ceasefire extension, with Lebanon’s death toll reported near 3,000 as strikes persist. West Bank Security: Israel warns of a worsening terror threat, citing deeper Iranian and Turkish involvement alongside Hamas efforts to expand activity across the territory. Local Flashpoint: In San Diego, an active-shooter report at the Islamic Center ended with three victims dead and both suspects found dead; police say the threat was neutralized. Humanitarian/Shipping: A Gaza-bound flotilla saw Malaysians detained after interception, underscoring how aid routes are getting squeezed.

Strait-of-Hormuz shock hits markets: Global stocks slid and bond yields jumped after fresh Gulf drone attacks, including a fire near the UAE’s Barakah nuclear plant, while Trump warned Iran the “clock is ticking” on a peace deal—pushing Brent above $110 and reviving inflation fears. Gulf security flare-ups: Saudi Arabia said it intercepted three drones entering from Iraq, as the Strait of Hormuz stayed mostly shut to shipping. War costs keep mounting: A Reuters tally says the US-Israeli war with Iran has already hit companies worldwide with at least $25bn, with more firms cutting forecasts, dividends, or production. Energy trading surge: Dubai’s GME logged a record week—69 million barrels of Oman crude traded—showing traders leaning on physical benchmarks amid volatility. Lebanon front: Israeli strikes killed a Palestinian Islamic Jihad commander and his daughter in eastern Lebanon, and fighting continued despite ceasefire extensions. Local ripple effects: In Kenya, transport workers struck over fuel price hikes tied to the Middle East oil shock.

Hormuz Tensions, Energy Risk: A drone strike sparked a fire near the UAE’s Barakah nuclear plant, with Abu Dhabi saying radiation safety was unaffected—while the US and Iran still look far apart on reopening the Strait of Hormuz. US-Iran Deadlock: Trump warned Iran the “clock is ticking” as Iran’s media says Washington is offering no real concessions. Diplomacy Under Pressure: With G7 finance ministers meeting in Paris, Eurogroup leaders flagged that even a quick end to the conflict won’t erase the economic shock. Syria Power-Sharing: Syria’s Kurdish parties rejected the new parliament mechanism over seat allocation, warning of marginalization as integration talks continue. Iraq Oil Squeeze: Iraq’s new finance minister urged boosting non-oil revenue as exports slump amid Hormuz restrictions. Eid al-Adha Dates: Saudi Arabia confirmed Dhul Hijjah starts May 18 and Eid al-Adha is May 27, with several countries aligning. Sports Diplomacy: Iran met FIFA in Istanbul and signaled progress toward playing the 2026 World Cup.

Iran War Escalation: Israel is stepping up preparations for possible strikes on Iran while continuing attacks in Lebanon despite an extended truce, as US-Iran talks remain fragile and Trump signals a “calm before the storm.” Hormuz Pressure on Energy: Iran says it will soon charge fees for ships using the Strait of Hormuz, while Iraq reports exports through the strait collapsed to about 10 million barrels in April—fueling fresh market jitters. Diplomacy Under Strain: Pakistan is pushing mediation between Washington and Tehran after stalled direct talks, and Iran’s World Cup team is set for emergency FIFA talks over US visa issues. Rights and Law: International groups urge the UN to act against a proposed Israeli law that could enable executions of Palestinian prisoners. Regional Crackdowns: Bahraini protesters denounce intensified repression of Shia citizens, including arrests of clerics. Economy Spillover: India scrambles to steady the rupee as oil shocks bite, and China’s sulphuric acid export halt threatens battery and fertilizer supply chains.

Gaza Escalation: Israel says it killed Hamas military wing leader Izz al-Din al-Haddad in a targeted strike, as Hamas confirmed the death and the Gaza ceasefire stays fragile amid deadlock over disarming Hamas. Lebanon Front: Despite a ceasefire extension, Israeli strikes hit southern Lebanon, including a clinic area where paramedics were killed, triggering fresh civilian flight. Iraq Energy Shock: Iraq’s new oil minister says exports through the Strait of Hormuz collapsed to about 10 million barrels in April—down from roughly 93 million monthly before the war—while output is around 1.4 million bpd and Baghdad leans on routes via Syria and pipelines to Turkey. Oil Markets: Oil prices are holding steady even with Hormuz disruption, helped by rerouted shipments and reserve management. Terror Hunt: The US and Nigeria say they killed Islamic State leader Abu Bakr al-Mainuki in a joint operation in Nigeria’s Lake Chad region. Turkey Crackdown: Erdogan renewed his push for a “terror-free Turkey,” saying progress continues despite obstacles. Diplomacy: Pakistan’s interior minister visited Tehran to support stalled US-Iran talks.

Ceasefire Diplomacy Under Pressure: The US says Israel and Lebanon have agreed to extend their 45-day ceasefire, with political talks set for June 2-3 and security talks starting May 29—yet violence is still flaring, including an Israeli strike in southern Lebanon that killed six people, including three paramedics. Jerusalem Control by Construction: Israel continues consolidating control in East Jerusalem through demolitions and displacement, with Palestinians in Silwan’s al-Bustan area forced to tear down their own homes. Oil Shock and Hormuz Fears: Global crude jumped again this week as US-Iran tensions revived worries about Strait of Hormuz disruptions, pushing prices up and raising pressure on oil-importing economies. Regional Solidarity Signals: Yemen’s Ansarullah deputy FM said the group stands “shoulder to shoulder” with Hezbollah, while Iran’s president praised Pope Francis’s “moral stance” against US-Israeli aggression. Energy Deals Beyond the Headlines: UAE is fast-tracking pipeline work to bypass Hormuz via Fujairah, and Shell is finalising studies for Libyan field development.

Ceasefire Diplomacy: Israel and Lebanon agreed to extend their truce by 45 days after Washington-facilitated talks, with new negotiations set for June 2-3—though Israel carried out fresh strikes it says aren’t covered by the deal. Iran War Fallout: Oil markets jumped as U.S.-Iran tensions flared, while Trump said he and Xi discussed keeping the Strait of Hormuz open and Iran must not get nuclear weapons; Iran’s foreign minister warned there’s “no trust” in the U.S. Gulf Escalation: Saudi Arabia and the UAE carried out separate strikes inside Iran in retaliation, according to U.S. officials—an unusual step that signals deeper regional assertiveness. Security Crackdown: The U.S. charged an Iraqi national over plans for at least 18 attacks in Europe and North America targeting Americans and Jews, tied to Iran-backed groups. Local Flashpoints: In the West Bank, a 15-year-old was reported killed in an Israeli operation, and settlers allegedly torched a mosque and cars. Energy Moves: Canada advanced a new pipeline aimed at boosting Asia-bound oil exports, while the UAE fast-tracked a second Hormuz-bypass pipeline to double export capacity by 2027. Money for Shock Absorbers: The Asian Development Bank offered the Philippines $1.75B to manage Middle East crisis impacts.

Al-Aqsa Flashpoint: Qatar condemned Israeli National Security Minister storming of Al-Aqsa, warning it violates international law and could spark more violence. Jerusalem Tensions: Saudi Arabia also condemned an Israeli minister’s Al-Aqsa “provocative” flag-raising under police protection, as Israeli nationalists marched again through the Old City amid chants. Hormuz Pressure on Energy: Oil jumped after an Indian vessel was sunk and another seized near the UAE, while markets stayed jittery over ship attacks and a ceasefire that’s still stuck. UAE Bypass Push: Abu Dhabi will accelerate a West-East pipeline to double export capacity through Fujairah by 2027, aiming to reduce reliance on Hormuz. Diplomacy vs Escalation: Russia blamed US-Israel “unprovoked aggression” for the crisis and signalled a bigger strategic push with India at BRICS, while Modi told the UAE India is ready to support peace as Iran-Israel tensions ripple globally. Markets Watch: Gold slipped and silver fell as oil stayed elevated; stocks got a lift after Trump-Xi talks.

Israel-Iran Alert: Israel is set to raise its maximum security alert level over the weekend as officials weigh possible renewed U.S.-led action against Iran, including renewed operations in the Strait of Hormuz or strikes on Iranian infrastructure. Lebanon Front: The ceasefire remains fragile: Israeli strikes have widened beyond the border area, Hezbollah has responded with rockets and drones, and evacuation warnings have expanded as direct talks in Washington near their next session. Iraq Government: Iraq’s parliament approved PM Ali al-Zaidi’s program and part of his cabinet, but key posts like interior and defence are still stuck in negotiations—while Iran and Iraq trade diplomatic signals. Jerusalem Day Flashpoint: In East Jerusalem, nationalist marches under heavy police protection saw chants including “Death to Arabs,” with Palestinians largely shuttered indoors as clashes and intimidation were reported. Sport-Culture Fallout: Israel’s defence minister condemned Barcelona’s Lamine Yamal for waving a Palestinian flag during the La Liga parade, escalating a wider backlash over Gaza spilling into football and other public arenas. Oil & Trade Pressure: The week’s biggest economic through-line is energy risk—Hormuz disruption fears and record inventory drawdowns continue to ripple into prices and inflation.

Al-Aqsa Flashpoint: Dozens of Israeli occupiers stormed the Al-Aqsa Mosque compound in East Jerusalem under police protection, with Turkey warning the move could inflame tensions. Lebanon-Israel Diplomacy: Lebanon and Israel are set to hold fresh peace talks in Washington as a ceasefire deadline nears, after Israeli strikes killed 22 people (including eight children) in the latest escalation. Iran War Meets BRICS: Iran’s foreign minister urged BRICS to condemn US-Israeli aggression as BRICS foreign ministers met in New Delhi, with energy disruption and oil prices dominating the agenda. Oil Pressure, Uneven Impact: Oil prices edged up on hopes around a Trump-Xi meeting, but Iraq’s Basrah crude fell more than 2%, underscoring how the Hormuz-linked shock is uneven. Regional Tensions, New Claims: Reuters reports Saudi Arabia carried out covert strikes on Iran in March, while Turkey and others continue to trade accusations over who is escalating. Ceasefire Culture Clash: Eurovision saw four audience members ejected after disruptions during Israel’s act, reflecting how Gaza and the Iran war are spilling into public life.

Energy Shock: The Strait of Hormuz is still effectively choked, and the IEA says global oil supply will fall short of demand in 2026, with inventories being drained at a record pace—while the EIA reports Hormuz oil flows down nearly 30% last quarter and Brent keeps hovering above $100. Inflation Spillover: Higher energy costs are feeding into prices, with the U.S. producer price index jumping 6% year-on-year in April, raising pressure for the Fed to keep rates elevated. Iran Pressure Tactics: Iran’s Kharg Island reportedly hasn’t loaded tankers for days, and a Chinese supertanker finally passed after a long delay—underscoring how the war is reshaping shipping routes. Regional Security: Iraq is rebuilding air defenses with South Korean M-SAM II missiles and planned Turkish counter-drone systems. Politics & Diplomacy: Netanyahu’s office says he held a “secret” meeting with UAE President Mohammed bin Zayed during the Iran war, while the White House denies visa issues for Iraq’s World Cup team.

Ceasefire nerves: Türkiye’s FM Hakan Fidan says there’s “enough will” on both sides to stop a US-Iran war, but markets keep treating the truce as fragile as oil slips and investors brace for Trump–Xi talks in Beijing. Gulf retaliation trail: New reporting says Saudi Arabia launched covert strikes inside Iran in late March, while the UAE also hit Iran’s Lavan Island refinery—fueling fears the conflict is widening even when ceasefire headlines appear. Energy corridor control: Iraq and Pakistan have struck side deals with Tehran to keep crude and LNG moving through the Strait of Hormuz, raising alarm among Gulf exporters that Iran may shift from threatening blockage to managing access. Israel–Palestinian legal escalation: Israel passed a law enabling public trials and a military tribunal for hundreds linked to the Oct. 7 attacks. Eurovision backlash: Israel qualified for the final amid boycott protests and a row over “snide” remarks by BBC presenter Angela Scanlon.

Hormuz & Oil Markets: Hopes for a US-Iran peace deal faded fast after Trump said the ceasefire is “on life support,” pushing Brent to around $108 as the Strait of Hormuz stays heavily restricted. Energy Policy: The US will loan 53.3 million barrels from the Strategic Petroleum Reserve to calm prices, while traders watch for more supply disruptions. Regional Escalation: Reuters reports Saudi Arabia carried out unpublicized strikes on Iran in late March—its first known direct action on Iranian soil—underscoring widening retaliation cycles. Energy Flows & Workarounds: Iraq and Pakistan reportedly struck deals with Iran to move oil and LNG through the Gulf, highlighting Tehran’s growing ability to “control access” to the corridor. Israel-Iran Frontline: Hezbollah’s drone war in southern Lebanon is intensifying, complicating any path to a Lebanon ceasefire. Politics at Home: Israel’s coalition faces new strain over ultra-Orthodox military draft exemptions, with early elections now being discussed.

Oil Shock & Hormuz Pressure: Oil markets swung again as hopes for a U.S.-Iran deal faded and the Strait of Hormuz stayed mostly shut—Brent slid to about $97 after earlier spikes, while Morgan Stanley warned Brent could surge toward $150 if the bottleneck persists. Emergency Oil Response: The U.S. is loaning 53.3 million barrels from the Strategic Petroleum Reserve to companies, joining a wider IEA plan to release hundreds of millions of barrels. Gulf Security Escalation: Reports say the UAE carried out covert strikes on Iran’s Lavan Island refinery in early April, and the U.S. has publicly confirmed Iron Dome was used to intercept Iranian missiles over the UAE. Israel-Law Fallout: Israel passed a law creating a military tribunal that can sentence Oct. 7 attackers to death, drawing rights-group criticism. EU Sanctions: EU foreign ministers approved new sanctions on violent Israeli settlers and Hamas figures. Local Economy Strain: Pakistan extended emergency austerity measures to June 13 amid the oil crisis.

Iran Oil Pressure: The US hit 12 Iran-linked individuals and firms tied to oil shipments to China, tightening the squeeze as the Strait of Hormuz remains disrupted. EU Sanctions: The EU agreed to sanction Israeli settlers in the West Bank and Hamas leaders, moving from deadlock to “delivery” with asset freezes and travel bans. Hormuz Fallout: Saudi Aramco’s CEO warned the “largest energy shock” could keep markets unstable into 2027 even if Hormuz reopens soon, with recovery taking months. Israel-US Rift: Netanyahu said Israel wants to wean itself off US military financial support to “draw down to zero” over the next decade. Syria Energy Pivot: Syria selected its first deep-water offshore oil-and-gas block for a Chevron-led project, signaling a push to restart investment after Assad’s fall. Lebanon Flashpoints: Fresh Israeli strikes killed civilians and wounded medics, while Israeli soldiers received prison terms for desecrating a Virgin Mary statue. Markets: Oil stayed volatile on renewed ceasefire hopes, but traders are bracing for longer disruption.