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Oil Surges, Stocks Fall as Trump Says to Blockade Strait of Hormuz

FILE PHOTO: A map showing the Strait of Hormuz and a 3D printed oil pipeline are seen in this illustration taken March 23, 2026. REUTERS/Dado Ruvic/Illustration//File Photo
FILE PHOTO: A map showing the Strait of Hormuz and a 3D printed oil pipeline are seen in this illustration taken March 23, 2026. REUTERS/Dado Ruvic/Illustration//File Photo
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Oil Surges, Stocks Fall as Trump Says to Blockade Strait of Hormuz

FILE PHOTO: A map showing the Strait of Hormuz and a 3D printed oil pipeline are seen in this illustration taken March 23, 2026. REUTERS/Dado Ruvic/Illustration//File Photo
FILE PHOTO: A map showing the Strait of Hormuz and a 3D printed oil pipeline are seen in this illustration taken March 23, 2026. REUTERS/Dado Ruvic/Illustration//File Photo

Oil prices surged and stocks sank Monday after US-Iran peace talks fell apart and Donald Trump announced a blockade of the strategic Strait of Hormuz, adding to fears of energy supplies from the Middle East.

Negotiations in Islamabad at the weekend fell apart with the US delegation -- led by Vice President JD Vance -- blaming Iran's refusal to give up its nuclear program and Tehran hitting out at "maximalism, shifting goalposts, and blockade".

The news dealt a blow to hopes for an end to the six-week conflict, which has sent crude prices soaring, pushing inflation up and sending shivers through the global economy, said AFP.

Oil prices -- which tumbled last week after the United States and Iran agreed to a ceasefire -- jumped around eight percent Monday, with both contracts topping $100 a barrel.

Equities fell across Asia, with Tokyo, Hong Kong and Seoul off at least one percent, while Shanghai, Sydney, Singapore, Taipei and Jakarta were also down.

In a lengthy social media post, US President Donald Trump said his goal was to clear the strait of mines and reopen it to all shipping.

But he said that Iran must not be allowed to profit from controlling the waterway -- through which a fifth of global oil and gas usually passes.

"Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz," Trump wrote on Truth Social.

"Any Iranian who fires at us, or at peaceful vessels, will be BLOWN TO HELL!"

He said the blockade would only apply to vessels travelling to or from Iranian ports.

The US military said Sunday it will blockade all Iranian Gulf ports on Monday at 1400 GMT, effectively seizing control of maritime traffic.

Iran's Revolutionary Guards said its security forces had full control over the strait and warned enemies would be trapped in a "deadly vortex" in case of any "wrong move".

Iran's navy chief Shahram Irani called Trump's threat "ridiculous and funny", according to state TV.

After the talks -- the highest-level meeting between the two sides since the 1979 Iranian revolution -- Vance said Washington had made Tehran its "final and best offer," adding: "We'll see if the Iranians accept it."

Iran's Foreign Minister Abbas Araghchi said the rivals had been "inches away" from a deal, writing on X that "Iran engaged with US in good faith to end war".

But he added "we encountered maximalism, shifting goalposts, and blockade".

Nicole Grajewski, an assistant professor at the Center for International Research at Sciences Po in Paris, warned that a US blockade was "not a minor coercive signal" but would rather be considered an effective resumption of the war.

Fawad Razaqzada, a market analyst at Forex.com, said: "The fundamental issue remains trust - or rather, the lack of it - between two long-standing adversaries who still appear some distance from common ground."

Investors are also keeping an eye on attempts to resolve the conflict between Israel and Hezbollah, as Lebanese Prime Minister Nawaf Salam said he was pushing to ensure the withdrawal of Israeli forces.

"We will continue to work to stop this war, to ensure the Israeli withdrawal from all our lands, the return of all the prisoners, to rebuild our destroyed villages and towns, and the safe return of the displaced," Salam said.

The prospect of the Middle East crisis continuing for the foreseeable future ramped up inflation fears and weighed on gold amid expectations interest rates would be kept elevated.

Data Friday highlighted the impact of the conflict on prices, with the US consumer price index spiking at 3.3 percent in March, its highest since May last year.

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Regional Turmoil Drives Growth at Egyptian Ports While Cutting Suez Canal Revenues

Egypt has an extensive network of seaports along both the Red Sea and the Mediterranean. (Egyptian Ministry of Transport)
Egypt has an extensive network of seaports along both the Red Sea and the Mediterranean. (Egyptian Ministry of Transport)
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Regional Turmoil Drives Growth at Egyptian Ports While Cutting Suez Canal Revenues

Egypt has an extensive network of seaports along both the Red Sea and the Mediterranean. (Egyptian Ministry of Transport)
Egypt has an extensive network of seaports along both the Red Sea and the Mediterranean. (Egyptian Ministry of Transport)

The Suez Canal may have incurred heavy losses due to regional tensions and instability in recent years — from the war in Gaza to the conflict involving Iran — those same disruptions have contributed to a significant surge in activity at Egyptian ports and in transit trade.

However, Egyptian economists said the strong increase in container traffic at the country’s ports is not enough to compensate for the canal’s losses.

They stressed that government initiatives, including efforts to expand transit trade, may only help reduce part of the revenue shortfall.

At the end of April, Egyptian President Abdel Fattah al-Sisi said Egypt had lost nearly $10 billion in Suez Canal revenues because of attacks on ships in the Bab el-Mandeb Strait.

Egyptian ports have experienced increased activity in recent months amid supply-chain disruptions linked to the Iran conflict. Maritime connections with regional countries have expanded, including the launch of the NEOM–Safaga multimodal logistics corridor linking Gulf Cooperation Council countries with Europe.

The Egyptian government has also reinforced trade links between the Gulf and Europe through the “Ro-Ro” shipping line connecting Damietta Port with Italy’s Port of Trieste to increase trade volumes.

In the energy sector, oil flows through Egypt’s SUMED pipeline rose following disruptions in global energy supply chains caused by the closure of the Strait of Hormuz.

Amr El-Samadouni, secretary-general of the International Transport and Logistics Division at the Cairo Chamber of Commerce, said the recent tensions in the Strait of Hormuz have “strengthened Egypt’s position as a regional hub for logistics services and supply-chain management.”

In a statement, El-Samadouni said the developments provide Egypt with “an important opportunity to offset part of the decline in Suez Canal revenues by attracting a share of urgent shipments that cannot tolerate long delays, especially in sectors linked to fast-moving trade and time-sensitive supply chains.”

According to a statement by Egypt’s Ministry of Transport on Thursday, the country’s port sector recorded a major increase in cargo and container handling. Egyptian ports handled 11.1 million twenty-foot equivalent units (TEUs) in 2025, compared with 8.9 million in 2024, representing growth of 24.3 percent.

Transit container traffic also increased sharply, reaching 6.7 million containers in 2025, a rise of 36 percent. The number of ships calling at Egyptian ports climbed to 17,288 voyages in 2025, up 6.6 percent, according to the ministry.

Egypt has an extensive network of seaports along both the Red Sea and the Mediterranean and is investing heavily in upgrades to strengthen its role in regional and international trade.

The Ministry of Transport said the modernization program aims to transform Egypt into a regional hub for transport, logistics, and transit trade while boosting the ports’ ability to attract investment and handle growing trade volumes.

Despite the improvements in port activity, “they cannot compensate for the losses of the Suez Canal,” said Walid Gaballah, a member of the Egyptian Association for Political Economy, Statistics and Legislation.

He noted that revenues from trade and container handling “may reduce the losses but cannot fully replace them,” adding that shipping traffic through the canal has yet to return to pre-Gaza war levels.

Gaballah told Asharq Al-Awsat that continued regional instability makes recovery in Suez Canal traffic increasingly difficult.

Egyptian economist Mostafa Badra also said there can be no direct comparison between canal revenues and port trade income. “There is no substitute for the canal as a major source of foreign currency,” he told Asharq Al-Awsat, noting that revenues generated by port trade remain far below the canal’s earnings under normal conditions.

Badra added that the government’s port-development strategy is intended to strengthen Egypt’s logistics capabilities and reinforce the Suez Canal’s role as a global trade corridor while primarily supporting domestic trade. By contrast, he said, the canal itself remains a vital artery in global supply chains.

Egypt recently rose three places in the UNCTAD Liner Shipping Connectivity Index, ranking 19th globally, first in Africa, and second in the Arab world, according to the Ministry of Transport.

Business

US, Mexico Finish First Round of Trade Agreement Talks

Mexican Economy Minister, Marcelo Ebrard, gestures as he speaks during a press conference in Mexico City on May 27, 2026. (AFP)
Mexican Economy Minister, Marcelo Ebrard, gestures as he speaks during a press conference in Mexico City on May 27, 2026. (AFP)
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US, Mexico Finish First Round of Trade Agreement Talks

Mexican Economy Minister, Marcelo Ebrard, gestures as he speaks during a press conference in Mexico City on May 27, 2026. (AFP)
Mexican Economy Minister, Marcelo Ebrard, gestures as he speaks during a press conference in Mexico City on May 27, 2026. (AFP)

The United States and Mexico completed a first round of bilateral trade talks Friday, focused on revising the North American Free Trade Agreement in light of pressure from President Donald Trump's tariff policies.

The US-Mexico-Canada Agreement (USMCA) is due for its first review since coming into force in 2020, with talks starting Wednesday led by Mexico's Economy Secretary Marcelo Ebrard and US Deputy Trade Representative Jeff Goettman joining Thursday.

"We talked about rules of origination, the automotive sector, how we compete with countries in Asia and other parts of the world, and how we can integrate more," Ebrard said in a statement.

The Mexican delegation in a statement described the talks as being held "in a constructive environment and with frank dialogue" that ended with a "net positive."

The US Trade Representative Office said in a statement the US approached the talks with the goals of reducing Washington's trade deficit with Mexico and strengthening US supply chains.

"During this first round, negotiators discussed priority issues related to automotive rules of origin, steel and aluminum, and economic security," the statement said.

"The United States and Mexico recognize the importance of advancing cooperation to enhance regulatory compatibility to strengthen sectors, including medical devices, pharmaceuticals, cosmetic products, and others."

Trump has threatened to pull out from the USMCA, arguing it doesn't benefit the US economy, casting a shadow over the talks.

The USMCA is critical for Mexico, as the United States accounts for more than 80 percent of its exports.

With the first round complete, future rounds of negotiations will take place in Washington in June, then Mexico City in July.

Business

EU's Six Biggest Economies Agree on Capital Markets Supervision

German Finance Minister Lars Klingbeil (L), Dutch Finance Minister Eelco Heinen (R) and Spanish Economy Minister Carlos Cuerpo attend a meeting with finance ministers from Germany, Italy, Spain, Poland, France and the Netherlands at the Deutsche Bundesbank recreation center in Berlin, Germany, 28 May 2026. (EPA)
German Finance Minister Lars Klingbeil (L), Dutch Finance Minister Eelco Heinen (R) and Spanish Economy Minister Carlos Cuerpo attend a meeting with finance ministers from Germany, Italy, Spain, Poland, France and the Netherlands at the Deutsche Bundesbank recreation center in Berlin, Germany, 28 May 2026. (EPA)
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EU's Six Biggest Economies Agree on Capital Markets Supervision

German Finance Minister Lars Klingbeil (L), Dutch Finance Minister Eelco Heinen (R) and Spanish Economy Minister Carlos Cuerpo attend a meeting with finance ministers from Germany, Italy, Spain, Poland, France and the Netherlands at the Deutsche Bundesbank recreation center in Berlin, Germany, 28 May 2026. (EPA)
German Finance Minister Lars Klingbeil (L), Dutch Finance Minister Eelco Heinen (R) and Spanish Economy Minister Carlos Cuerpo attend a meeting with finance ministers from Germany, Italy, Spain, Poland, France and the Netherlands at the Deutsche Bundesbank recreation center in Berlin, Germany, 28 May 2026. (EPA)

Finance ministers from the EU's six biggest economies (E6) agreed among themselves on Friday to support more centralized capital markets supervision, in a breakthrough crucial for deeper integration of Europe's fragmented capital markets.

The push for financial market players to be supervised at a European Union rather than national level is part of the EU's plan to redirect trillions of its citizens' savings, now idling in bank deposits, into more productive investment in Europe.

Access to such a large ‌amount of capital ‌for investment would boost the bloc's chances of competing against ‌the ⁠United States and China.

Supervision ⁠of significant market infrastructure would be gradually transferred to the European Securities and Markets Authority in Paris, the finance ministers of Germany, France, Italy, Poland, Spain and the Netherlands agreed after they met in Berlin on Thursday to discuss the issue.

The issue of handing over local powers to supervise trading platforms, central counterparties and central securities depositories to the EU has been difficult because of vested national interests and opposition from Ireland and Luxembourg and ⁠initially Germany.

But the issue will be decided by qualified ‌majority, meaning it needs the support of 15 ‌out of the EU's 27 countries representing 65% of the bloc's population.

With the backing of the ‌E6, which represent 70% of the EU's population, centralized supervision is now much ‌more likely to happen.

"The fact that the EU's six largest economies are prepared to leave national self-interest behind and move forward together is an important signal for the entire European Union," German Finance Minister Lars Klingbeil said in a statement.

ACCOUNTABILITY MUST BE ENFORCED

The European Commission presented its ‌plan to better integrate EU capital markets in December, and Germany's finance minister has said he expects the package to ⁠be adopted by ⁠the end of this year.

"In an uncertain international context, Europe needs deeper and more integrated capital markets," Spanish Finance Minister Carlos Cuerpo said. "This joint positioning is a decisive step towards a true savings and investment union."

ESMA's governance structure must be set up efficiently: expertise, supervisory and market experience, and geographical balance should play a decisive role, the ministers agreed in a paper seen by Reuters on Friday.

In addition, costs must be kept under control and accountability must be enforced, the joint paper said about the ESMA.

However, the paper said that in their current form and size, German trading venues would currently not be subject to mandatory European supervision authorities over trading in crypto-assets, and to reduce barriers to cross-border funds to help company financing, according to the paper.