AGP Executive Report

US-Iran Pivot: Trump called off planned strikes on Iran hours after threatening “VERY HARD” action and “total control” of Kharg Island, saying talks reached the highest level of Iranian leadership and were approved; the naval blockade stays in force. Oil Market Shock: The reversal sent oil tumbling (Brent back near $90) after earlier spikes tied to fears of renewed attacks on Iran’s export infrastructure. Strait of Hormuz Pressure: Iran and the US traded strikes again, with Hormuz closure and tanker disruptions continuing to rattle global supply and shipping risk. Shipping Fallout: CENTCOM said it disabled a third tanker in the Gulf of Oman for attempting to move Iranian oil, killing Indian mariners in earlier incidents and raising diplomatic alarms. OPEC Demand Cut: OPEC lowered 2026 oil demand growth again to 970,000 bpd, citing the war’s market disruption and Hormuz constraints. Macro Spillovers: The IMF cut eurozone growth to 0.9% and warned against relaxing fiscal rules as energy-driven inflation pressures worsen; Turkey held rates at 37%. Regional Energy Diplomacy: Malaysia and Turkmenistan plan a long-term hydrocarbons deal, while China-Africa energy talks pushed grid and renewables cooperation amid shipment disruptions.

US-Iran Escalation: The US launched another wave of “self-defense” strikes on multiple targets in Iran after Trump warned Tehran would “pay the price” for stalled talks; Iran retaliated by hitting US bases in Bahrain, Kuwait and Jordan, while Iranian forces threatened to target any vessel trying to pass the Strait of Hormuz. Strait of Hormuz Shock: Iran’s IRGC said the strait is closed to all vessels, while the US said commercial ships are still transiting—keeping oil and LNG supply risk front and center. Oil Market Impact: A Reuters survey found OPEC output in May fell to the lowest since at least 2000, with Iran’s exports hit hardest by the US blockade and Hormuz disruption. Shipping & Tanker Incident: India summoned the US chargé d’affaires after a missile attack on the Palau-flagged tanker Settebello off Oman left three Indian crew missing; India also urged the UN to oppose attacks on merchant shipping. Regional Spillovers: Kuwait closed its airspace temporarily and Bahrain sounded missile alerts as the conflict widened. Egypt Macro: Egypt’s inflation eased to 13% in May, extending a gradual slowdown in price pressures. Markets: Stocks slid across Asia as oil jumped and rate worries returned alongside renewed Middle East conflict.

US-Iran Escalation: Trump says the US will hit Iran “very hard” again after an Apache helicopter incident, while Iran vows to stand firm and warns of wider fallout, keeping Strait of Hormuz risk front and center. Oil-Tanker Crackdown: CENTCOM disabled a Palau-flagged tanker in the Gulf of Oman for trying to transport Iranian oil, adding to a growing list of blocked vessels. Hormuz Oil Claims: Trump claims “millions” of barrels of Iranian oil have been secretly removed and says over 100 million barrels have passed through Hormuz—claims not backed with details. Market Shock: Oil prices climb on renewed tensions; Europe gas edges firmer as Norway maintenance looms. Inflation Pressure: US CPI hits 4.2% as energy costs feed through, while investors weigh how long the conflict lasts. Egypt Energy Finance: Egypt cleared $6.1bn in oil and gas arrears, reaching zero dues to partners—aimed at unlocking investment. Regional Route Diversification: Turkey and Saudi Arabia move to revive the Hejaz Railway as an overland alternative to Hormuz chokepoints. Gulf Security Messaging: GCC and regional statements stress indivisible security and warn that hostilities undermine dialogue.

US-Iran Escalation: The U.S. began “self-defense” strikes against Iran after Trump blamed Tehran for downing a U.S. Apache near the Strait of Hormuz; CENTCOM said the response targeted air defenses, radar and control sites, while Iran warned foreign forces are “at constant risk” and vowed further retaliation. Regional Energy Shock: Oil prices bounced as markets priced higher supply risk with Hormuz still effectively constrained, and the wider conflict is again raising inflation fears and pressuring household budgets. Humanitarian Fallout: The World Food Program warned that higher fuel and food costs from the Hormuz disruption are pushing millions toward acute hunger, with fertilizer flows also hit. Nuclear Safeguards: Washington is pushing an IAEA Board resolution seeking “precise information” on Iran’s enriched uranium accounting and safeguarded facilities, aiming to tighten scrutiny without referring Tehran to the UN Security Council. Middle East Power & Gas Demand: Egypt remains Africa’s biggest gas consumer, using natural gas for most electricity generation, while the country also set growth targets for FY 2026/27 amid regional instability. Energy Deals in the Gulf: The Arab Energy Fund priced a $500m, five-year sukuk, signaling continued capital appetite for regional energy finance.

Strait of Hormuz Flashpoint: President Trump blamed Iran for downing a U.S. Army Apache near the waterway and said the U.S. “must” respond; the two pilots were rescued by a drone boat and are safe, but the crash adds pressure to a fragile Iran-Israel ceasefire and raises fresh Oil Market Risk as shipping through the chokepoint remains central to global supply. Diplomacy vs. Escalation: Trump also said Iran and the U.S. are in the “final throes” of a peace deal, possibly in “two or three days,” while Iran and Israel trade accusations and Lebanon’s fighting continues, keeping Ceasefire Uncertainty high. Nuclear Talks Tension: Iran’s deputy foreign minister condemned an IAEA draft resolution as a “dangerous attempt” to whitewash aggression, underscoring Nuclear File Friction. Regional Energy Cooperation: Egypt urged renewed talks on developing Palestinian offshore gas at the Eastern Mediterranean Gas Forum, aiming to boost Eastern Mediterranean Gas and Palestinian economic recovery. Energy Cost Spillovers: India’s opposition urged the government to absorb higher crude costs rather than pass them to consumers, warning the Iran-war shock will hit growth, while Japan approved a $312m concessional loan for Bangladesh’s Energy Security amid Middle East strain.

Strait of Hormuz Pressure: Iran and Israel paused strikes after Trump urged “stop shooting,” but both warned retaliation if Lebanon fighting resumes, keeping the Strait of Hormuz and shipping risk front and center. US-Iran Talks & Politics: Trump said negotiators are in the “final throes” of a Middle East peace deal and floated a timeline of “two or three days,” while also declaring “total victory” over Iran within two weeks. Shipping & Enforcement: The US disabled a tanker bound for Iran near the Gulf of Oman, and an oil tanker fire near Oman left 24 Indian crew safe—signs that blockade enforcement and maritime disruptions remain active. Energy Markets: Oil eased after the pause, but investors stayed cautious as the conflict’s durability kept a risk premium in play; markets also reacted to the prospect of Hormuz reopening. Gulf Renewables Deal: UAE’s Alcazar Energy signed agreements for Egypt’s 580MW Gabal El-Zeit wind farm, including a PPA and investment/operations terms. Project Updates: VAALCO said Baobab field production resumed after FPSO refurbishment off Côte d’Ivoire. Regional Investment Push: South Africa sought more UAE investment, especially in renewables and infrastructure. Energy Transition in Transport: India launched E85 fuel and flex-fuel vehicles to cut crude imports and reduce exposure to Middle East oil shocks.

Middle East Oil Shock Watch: Iran warned it may target other regional energy infrastructure if attacks continue, after Israel struck Iran’s Mahshahr petrochemical area; the IRGC said it hit Israel’s Haifa-linked energy targets in retaliation. Ceasefire Under Strain: Iran and Israel said they halted attacks after a Trump appeal to “stop shooting,” but both sides left room to resume if Lebanon/Hezbollah fighting continues. Chokepoint Pressure: The Strait of Hormuz remains the market’s main fear; Iran says it will reopen with new transit fees, while the EU imposed sanctions on Iranian entities over restricting maritime traffic. Red Sea Disruption Risk: Yemen’s Houthis said they will ban Israeli shipping in the Red Sea, raising the odds of more rerouting and higher freight costs. Crude Pricing Signals: Oil rose on renewed Israel-Iran flare-ups, while Saudi Aramco cut Asia crude prices for a second month as the region’s logistics remain disrupted. Energy Security & Markets: Aramco highlighted the need for resilient refining and pipeline-linked product flows; meanwhile, investors stayed cautious as Middle East tensions weighed on sentiment. Humanitarian Fallout: The IRC warned the Iran war is worsening displacement and food insecurity, with Hormuz-driven shocks hitting aid operations.

Israel-Iran Escalation: Israel struck military targets in western and central Iran after Iran fired missiles toward Israel, with air raid sirens reported across multiple Israeli cities and fresh fears the fragile ceasefire could unravel. Oil & Shipping Shock: The renewed fighting pushed Brent up more than $3 to around $96, as the Strait of Hormuz remains constrained and traders weigh whether flows can restart soon. Gulf Security Spillover: Iran launched ballistic missiles and drones toward Bahrain and Kuwait, intercepted early, while the U.S. said it struck Iranian surveillance sites tied to navigation security. Policy & Sanctions: The U.S. Treasury sanctioned Iran’s Nobitex crypto exchange, alleging it helped IRGC-Quds Force bypass restrictions. Market Fallout: Airlines warned jet fuel costs could rise by about $100bn this year, squeezing already thin margins, while Asia stocks slid on the combined hit from Middle East risk and a tech selloff. Egypt Power Reform: Egypt advanced electricity market reforms with Nexus Analytica, aiming to strengthen grid governance and boost renewables and efficiency. Jordan Resources Push: Jordanian officials renewed calls to develop gas, oil shale and minerals to cut debt and lift revenues, arguing institutions weakened exploration. Energy Industry Milestone: Middle East Energy returns to Dubai World Trade Centre for its 50th year, spotlighting grid resilience and AI-driven power demand.

Gulf Escalation: Iran fired ballistic missiles and drones toward Bahrain and Kuwait, intercepted early Saturday, as the U.S. said it shot down missiles/drones and struck radar-related targets—raising the stakes for a fragile ceasefire while Pakistan’s interior minister arrived in Tehran to mediate. Sanctions & Finance: The U.S. is considering letting Gulf allies tap frozen Iranian assets to pay for war damages, as Washington presses for a deal. Lebanon Front: Israel struck Beirut’s southern suburbs days after a Washington ceasefire plan, with Iran warning of “decisive and painful” retaliation and calling U.S./Israeli bases “legitimate targets.” Nuclear Diplomacy: The U.S. is lobbying at the IAEA for a draft resolution demanding Iran provide details on bombed nuclear sites and uranium, a move that could complicate stalled talks. Oil Market: OPEC+ agreed to raise July output by 188,000 bpd despite the Strait of Hormuz closure, a largely symbolic step given shipping constraints. Power Sector Reform (Egypt): Egypt’s electricity minister discussed a regulatory framework with Nexus Analytica to support electricity market restructuring, transparency, and private investment.

Strait of Hormuz Security: US Central Command says it shot down two Iranian one-way attack drones over the Strait of Hormuz, warning they threatened international maritime traffic, as the ceasefire stays fragile. Escalation After Radar Strikes: Reuters reports the US struck Iranian coastal radar sites on Goruk and Qeshm Island after drone attacks, while Iran says the action broke the April 8 ceasefire and claims retaliation. Frozen Assets for Gulf Repairs: US Treasury Secretary Scott Bessent is reportedly directing assessments of damage costs in Gulf states, with plans to use Iranian assets to fund rebuilding and repairs—an idea Iran links to any peace deal. Oil Market Pressure: OPEC+ meets to consider higher quotas to cap prices that have nearly doubled since Hormuz disruptions, but analysts say only a few producers can actually raise output. Energy Spillover to Food: The UN World Food Programme warns the Iran conflict is pushing millions toward acute food insecurity as energy and food prices stay high. Regional Mediation: Pakistan’s Interior Minister Mohsin Naqvi is in Tehran carrying messages aimed at de-escalation as talks stall.

Gulf Security Escalation: Iran fired ballistic missiles and drones toward Bahrain and Kuwait, with Bahrain saying intercepts were successful, while the US said it struck Iranian radar and surveillance sites after intercepting drone threats—raising the stakes around Strait of Hormuz shipping. Ceasefire Friction: Iran’s foreign ministry called the US strikes a violation of a fragile ceasefire and urged the UN Security Council to respond, as Lebanon’s army chief visited Pakistan amid US-Iran talks. Market Pulse: Oil prices fell about 2% as US-Iran tensions eased in the latest session, but analysts warn global oil inventories are dangerously low and could trigger another price shock if tanker traffic remains blocked. Broader Economic Impact: Fitch cut its 2026 global growth forecast to 2.4%, blaming the escalating US-Iran oil crisis for higher energy prices and renewed inflation pressure. Regional Investment & Energy Exposure: Egypt’s Ras El Hekma deal drew major Gulf capital, while AfDB warned Egypt is highly exposed to Middle East instability via Suez, tourism, remittances, and energy-market swings. Energy Policy Angle: Malaysia’s PM said Petronas is pursuing talks with Turkmenistan to secure access to a major gas field zone, calling it a strategic energy-supply priority.

Gulf Flashpoint: The US says it shot down four Iranian one-way drones aimed at the Strait of Hormuz, then struck Iranian coastal surveillance radar sites on Qeshm Island and near Goruk to protect maritime traffic. Retaliation Cycle: Iran’s IRGC says it hit US-linked bases in Kuwait and Bahrain and fired on tankers trying to cross without authorization, while Kuwait and Bahrain reported missile/drone alerts and sirens. Energy Pressure: With the strait still a bottleneck for global oil and gas, reports warn that tighter flows could push gas prices higher in coming weeks. Sanctions Push: The US Treasury sanctioned an LPG smuggling and “shadow banking” network accused of disguising Iranian-origin fuel as Omani LPG for buyers in South and East Asia. Humanitarian Fallout: The UN World Food Programme warns the conflict is driving millions closer to hunger as fuel and transport costs feed into food price spikes and aid funding gaps. Diplomacy Stalls: Iran says a US-Iran peace deal hinges on releasing about $24bn in frozen Iranian assets, warning of a “dark corridor” if fighting resumes.

Iran Oil Pricing: Iranian Light crude has slipped into discount territory for China’s Shandong refiners, with offers down to about $0.50–$1/bbl under Brent as Chinese “teapot” refiners face weak margins and cut runs. Sanctions & Shipping: The US moves to tighten enforcement, sanctioning Iranian LPG smuggling and shadow-banking channels tied to Iran’s ability to move funds and cargo. Strait of Hormuz Pressure: Iran says it fired “warning missiles” at US destroyers in the Gulf of Oman and reiterates leverage via blockade dynamics; Reuters also lays out the core US-Iran deal hurdles: Hormuz/Gulf blockade, nuclear enrichment, and port sanctions. Market Mood: Oil prices swing on de-escalation hopes, while the Boston Fed says the Iran shock is now showing up more as inflation pressure than job losses. Policy Crosscurrents: The US prepares an IAEA-related draft resolution condemning Iran, a move that could complicate US-Iran ceasefire and nuclear talks. Energy Security Costs: The Iran war is also feeding into higher logistics costs, with Amazon Prime Day facing fuel and freight pressures.

Forex & Capital Flows: India’s RBI rolled out five measures to pull in foreign capital and shore up external finances as the US-Iran conflict strains the rupee and reserves. Oil Markets & Hormuz Risk: Crude prices swung but stayed sensitive to stalled US-Iran talks and Lebanon ceasefire uncertainty, with Hormuz transit fears still shaping the risk premium. Iran Supply Pressure: Iranian crude and condensate exports slid to a six-year low in May, blamed on the US naval blockade and wider reluctance to insure and move cargoes. Regional Escalation: Hezbollah rejected a US-backed Lebanon ceasefire, keeping the US-Iran track shaky and adding volatility to energy expectations. Nuclear Watch: The UN nuclear watchdog said it couldn’t inspect key Iranian sites hit in war, raising safeguards and proliferation concerns. Energy Security Moves: Türkiye boosted renewables capacity by 55% over five years, while Korea pushed LNG import diversification to cut Middle East dependence. Infrastructure Disruption: Oman suspended oil loading at Mina al Fahal after an explosion near its SBM berths, reportedly linked to a drone attack. Demand Outlook: OPEC said it still sees robust oil demand growth despite Hormuz disruption fears. Broader Impact: The OECD warned that a prolonged Persian Gulf conflict could push economies toward recession.

UN Nuclear Oversight: The IAEA warned that it still lacks access to verify Iran’s nuclear material, calling it a “proliferation concern” and urging Tehran to cooperate, with key sites showing little movement since the war began. Gulf Ceasefire Reality Check: Despite US-brokered ceasefire hopes, fighting continues across Gaza, Lebanon, Israel and Kuwait, with Hezbollah rejecting a Lebanon truce and Israel refusing troop withdrawal. Hormuz Shock & Oil Markets: OPEC’s Haitham Al-Ghais said oil demand growth remains robust even as Hormuz disruption and tanker “stealth” routes keep markets jittery. US-Iran Politics: The US House approved a resolution to limit Trump’s Iran war powers, adding pressure as talks stall and both sides trade conflicting claims on progress. Energy Security & Inflation: The Fed said Iran-war energy costs are a main driver of inflation pressures, while Fitch cut global growth forecasts citing the oil crisis. Regional Connectivity Plan: Turkey’s transport minister said talks with Saudi Arabia aim to revive the Hejaz Railway and extend it toward Oman, alongside Iraq’s Development Road corridor. India’s Supply Pivot: India’s Modi met Venezuela’s interim president to expand energy cooperation, seeking crude to offset Middle East-linked supply disruptions.

US-Iran War Powers: The US House passed a bipartisan war powers resolution (215-208) ordering Trump to withdraw from the Iran conflict or seek explicit congressional approval, after four Republicans joined Democrats—raising pressure as ceasefire talks stall. Gulf Flashpoints: Iran’s drone/missile attack on Kuwait’s main airport killed 1 and injured 63, while the US carried out “self-defence” strikes on Iran’s Qeshm Island after attempted attacks in the Gulf; the Strait of Hormuz remains a key risk for energy flows. Ceasefire Diplomacy: Israel and Lebanon agreed to implement a conditional ceasefire with “pilot zones” for the Lebanese army, boosting hopes for wider de-escalation that could feed into US-Iran negotiations. Oil & Markets: Brent swung with the headlines—rising back toward $98-$100 on renewed fighting, then easing when ceasefire hopes grew; gold tracked oil and the dollar. Egypt Finance: Egypt is finalising a $500m-equivalent yen-denominated Samurai bond sale, with the Iran war adding pressure via higher energy costs and inflation. Regional Energy Buildout: Gulf states are reportedly planning pipeline routes to bypass Hormuz, while Saudi resilience is linked to rerouting via East-West pipelines and Red Sea exports.