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• What does the Houthis' threat to attack Red Sea shipping mean for the oil markets?

  The Houthis, who are Iran-aligned in Yemen, announced on Monday they would stop ships from Israel leaving the Red Sea. This comes after Israel re-initiated its military strikes against Iran. Here's why it matters, and what it means to the Iran War and the global energy crisis. How big is the risk to global energy markets? The Iranian closure of the Strait of Hormuz, since Israel and the United States attacked it on February 28, has disrupted the majority of?oil exports and other energy from the Gulf. Prices have risen and there's been a major energy shock. Saudi Arabia responded by diverting 70% of its daily crude oil exports to Yanbu, a Red Sea port. This has helped to lower the global oil price. A sustained disruption of Red Sea shipping by the Houthis, including possible attacks on ports or shipping, could be a major problem. According to a Houthi source, preventing Israeli ships transiting the Red Sea is "a first step". However, if the escalation continues, the group will stop all ships headed towards Israel and take other measures. The group that attacked the shipping during the Gaza War stated its target as?Israel-linked vessels', which included any vessel owned by any company using Israeli ports. Its attacks on these ships discouraged most companies from using this route. Who are the HOUTHIS? In the 1990s the Houthis emerged in north Yemen as a military, religious and political movement, which fought guerrilla warfare against the government of Sanaa. The Zaydi sect is a branch of Shi'a Islam. After the Arab Spring in 2011, they strengthened their ties with Iran, seizing on the instability to take over the capital city, thereby sabotaging a Gulf-backed plan for political transition. Saudi Arabia, along with its Arab allies, launched a military operation months later in order to restore the government that was ousted and remove a group they viewed as an agent of?Iran - Riyadh’s arch regional enemy. The Houthis, as Yemen's civil conflict dragged on to a standstill, attacked Saudi Arabian oil installations and other infrastructure with drones and missiles. The truce that was agreed between the warring sides in Yemen for 2022 has mostly held. AREN'T THE HOUTHIS IRANIAN PROXIES? Iran supports the Houthis in its regional "Axis of Resistance", including Lebanon's Hezbollah, and Iraqi Shiite militias. However, its ties to the Yemeni movement is less clear than those with these other groups. Houthis don't recognise Iran's supreme religious leader as their ultimate authority, like Hezbollah or Iraqi groups. Although ideologically aligned to Iran, its motivations are mostly domestic. Hezbollah is said to have helped Iran arm, fund and train the Houthis. The Houthis claim to be independent and deny that they are Iranian proxy forces. What happened when the HOUTHIS attacked RED SEA SHIPS before? The Houthis, who claim to be supporting the Palestinians, began shooting at Israel after the Hamas attack of October 7, 2023 and Israel's destructive campaign in Gaza. The Houthi attack in the Red Sea caused global shipping to be severely disrupted, forcing Maersk, Hapag-Lloyd, and other major companies to divert through Africa, a much longer, more costly route. The U.S. led mission to restore freedom of navigation in the Red Sea included repeated strikes against Houthi targets and a defensive offensive that destroyed hundreds of drones, missiles, and other?targets. Some Houthi attacks continued through the summer of last year, but only ended completely in October with the Gaza ceasefire. WHAT HAS THEY DONE IN THE LATEST WAR WITH IRAN? Hezbollah, Iraqi groups and other terrorists joined the war with a flurry of?rockets and drones after the initial U.S.-Israeli strikes against Iran. The Houthis however have been relatively quiet. Abdul Malik al-Houthi, the leader of the group, said on March 5, "Our fingers are ready to fire at any time if circumstances warrant it." Esmaeil Quds Force Commander of the Revolutionary Guards Quds Force, Esmaeil Quaani, said on June 1, that the Houthis may join the war. Before this week, however, the group was only involved in a few drone and missile attacks against Israel that took place late March?and earlyApril. It is not clear why the Houthis are so quiet. The Iranians and they may have been trying to use the threat to close another major energy route to scare Israel and the United States into not escalating further. Houthis might also be less concerned about Iran's security compared to other regional allies. The group might not want to anger its wealthy, powerful neighbour Saudi Arabia or risk re-igniting conflict in the country.

• Yemen's Houthis, backed by Iran, threaten Israeli shipping on the Red Sea

  Houthi rebels in Yemen, who are allied with Iran, announced on 'Monday they would prohibit Israeli shipping from the Red Sea. This will add to the challenges facing?global shipping throughout the Middle East during the Iran war. In a press release, the?group claimed that it had launched a military attack against Israel and banned all Israeli shipping from the Red Sea. It warned of further escalation. Houthi attacks against Red Sea shipping could worry energy markets more than three months after Iran closed the Strait of Hormuz and with the war re-igniting over night. Houthi sources said that stopping Israeli ships from transiting the Red Sea is a first step. Further escalation may lead to other measures, such as'stopping the passage of any ship bound for Israel. Houthi attacks on Red Sea shipping during Gaza's two-year war, which began in October 2023, led companies such as Maersk and Hapag-Lloyd around Africa to take a longer more expensive route. Houthi attacks against what they called Israeli-linked vessels were extended to all shipping companies using Israeli ports during that time. The closure of the?Strait of Hormuz could make the impact of any threat on Red?Sea Shipping even greater. Since the start of the conflict on February 28, the majority of Gulf energy has not been able to leave the area. Nevertheless, significant quantities of Saudi crude have been transported via pipeline to Yanbu's Red Sea export terminal. Although there were Iranian attacks at this terminal, the United Arab Emirates has managed to export some crude oil from Fujairah. Reporting by Mohammed Ghobari, Nayera Abdallah and Angus McDowall; Editing by Aiden Lewis

• China's global ecommerce push is stalled as the Iran war raises costs and dampens demand

  China's export engine for e-commerce is in trouble as rising jet fuel prices and a weaker demand by lower-income Western consumers linked to the Iran War threaten the?profits of big online platforms such as Temu, Shein and AliExpress. Business models based on shipping $5 dresses from?Chinese factory to customers around the globe were already under stress after U.S. president Donald Trump introduced tariffs, and axed waivers for low-value parcels. Data shows that the Middle East conflict is causing a surge in logistics costs, and industry experts agree. Shippers such as DHL Express are imposing heavy fuel surcharges. China's low cost e-commerce, which has soared in the last six years, dropped 10.9% to $9.81 Billion in April, marking the fifth consecutive decline compared to the previous year, according to Trade and Transport Group, a Luxembourg-based consultancy. Costs are passed on to consumers Diana Qiao is a Shenzhen seller of women’s clothing who sells on Temu. She said that she raised her prices by $2 as her shipping costs per garment increased by an average of $1. Qiao said that "the final burden will be borne by the consumers." She added that this increase was "needed to protect my profit margins" and although sales have decreased slightly, she has not yet seen a need to alter her shipping arrangements. Analysts and industry insiders believe that falling export values indicate not only the cost squeeze but also the end of the hyper-growth era for large low-cost platforms. The companies are moving more products into bulk warehouses for local dispatch, rather than flying all the goods directly from China. He said that it would be reasonable to consider the cost of air freight in relation to the value and quality of the product. If you buy a top weighing 300-400 grams, air freight will account for 60% of the total cost. Shein is expanding its warehouse capacity throughout Europe. Last month, it opened its third warehouse near Birmingham, in Britain. Alibaba, the owner of AliExpress, said it was focused on "maintaining a value-for money pricing for consumers" and "providing a stable environment for both sellers and consumers despite global transportation costs fluctuation". Shein and Temu didn't respond to any questions regarding the impact of air freight on their business. PLATFORMS DEMAND IS LOWER AS BUSINESS MARKS MATURE Exports are higher today than two years ago. The start of 2025 saw a significant frontloading of goods ahead of U.S. Tariffs. Returning to the growth of the last few years will be difficult, as Shein and Temu already have a significant share of the market and the rising petrol prices in the U.S.A. and Europe are impacting the household budgets. The European Union will also impose an EUR3 charge on "low-value" e-commerce packages starting July 1. According to a China-based executive in freight forwarding who refused to be identified because he was not authorized to speak to media, air freight costs are a factor but platforms have also entered a slower growth phase and overseas consumption is declining due to inflation. According to Judah Levine, Freightos head of research, air freight rates will likely'stay high due to jet fuel prices, and it will take time for them to drop even if Iran conflict ends. If the cost of shipping remains high or increases further, some companies will switch to alternative modes of transportation or delay some shipments, said Martin Habisreitinger.

• LATAM CEO expects further airline capacity reductions if the fuel crisis persists

  LATAM Airlines' Chief Executive?Roberto Alvo warned that the industry could be forced to reduce capacity if fuel prices continue to rise into 2027. He also said there would be increasing pressure on airlines. Alvo said in an interview at the International Air Transport Association annual meeting in Rio. "At the end, that's the only thing you can do to try and balance the equation in the industry." Alvo said that airlines with stronger balance sheets, and more premium passengers were better positioned to absorb the fuel shock. He said that carriers with weaker finances, or those who are more exposed to customers who are price sensitive, like ultra-low cost carriers, will face greater challenges. He stated that the higher borrowing costs for airlines are already reflected in bond prices, as investors react to the fuel price shock. Alvo stated that if the effects of the war continue, "it won't get any better." Alvo says that LATAM’s fuel hedges do not protect the airline fully because current prices are higher than those covered by these contracts. Hedging can smooth out margins, but it cannot protect an airline against a sudden spike in fuel prices, Alvo said. Alvo predicted that 'aircraft and engine supply-chain' problems would continue to be a problem for at least two to three years. This will force airlines to maintain older planes in service longer. He said that engine and airframe manufacturers had "not been able to meet their commitments". Alvo said that engine manufacturers had benefited from the shortages by gaining pricing power, while airlines were absorbing the costs of delayed planes and engines. He said, "We must absorb the problem of not being able to get the engines for the aircraft we bought and that our suppliers had promised." Reporting by Rajesh Kumar Singh in Rio de Janeiro and Gabriel Araujo, edited by Manuela Andréoni

• In a bus accident and fire near Nassiriya, at least 21 Iraqis were killed and 19 injured

  Police and health officials reported that at least 21 Iraqis were killed and 19 injured when a passenger?bus crashed and caught fire?near Nassiriya, a southern?city?. Officials?stated that the accident happened after the driver lost the control of the vehicle on a highway near Nassiriya. The vehicle then flipped over and erupted in flames. His office reported that Iraqi Prime Minister Ali al-Zaidi had ordered an investigation to determine the cause of the crash. He also instructed authorities to submit a report detailing the circumstances of the accident. Officials from the police and medical services confirmed that 21 people died at the scene, and 19 more were injured. Health officials reported that the majority of those injured were in a critical condition, and had suffered?severe? burns. Police said that the cause of this crash is still being investigated. Speeding, poor roads conditions, and inadequate enforcement of traffic laws are all factors that contribute to road accidents in Iraq. Reporting by Ahmed Rasheed, Editing by Chris Reese

• Iran rejects the idea of using assets to pay US allies damages

  Iran's deputy foreign minister Kazem Gharibabadi stated on Sunday that regional governments "were not in a position" to demand restitution. He was responding to reports that the U.S. might use?Iranian resources to compensate regional allies for war-related damage. Gharibabadi said in a 'post' on X that Iran assets are "neither spoils of war for Washington, nor a fund to pay its allies". According to a report on Saturday, which cited a source with knowledge of the issue, the United States will make Iranian assets accessible to Gulf allies in order to help rebuild and repair future damages caused by Iran. The United States would 'also consider using these assets to support repair for past damages. This source added that U.S. Treasury Sec. Scott Bessent had instructed a team of experts to assess the costs of damage Iran has already caused to Gulf allies. During the war, Iran launched drone and missile attacks on several Gulf nations, claiming to be targeting U.S. interests and Israelis in the region. The?Iran claimed that it launched ballistic missiles on Saturday at U.S. bases located in Kuwait and Bahrain. The?U.S. The?U.S. According to a Rystad Energy report published in April, the Middle East conflict may cost up to $58 billion for repairs of energy infrastructure. Gharibabadi stated that any seizure or transfer of Iranian assets without the consent of Iran's government would be "a new international wrongful act". This would place the U.S. in a position of responsibility, at a moment when Washington is claiming to seek a negotiated agreement with Tehran. He said that such a move could also trigger an "appropriate" response from Iran, without going into further detail. Iran is asking the U.S. to release a portion its confiscated funds under the framework of the negotiations between the two countries to end the Iran War. Gharibabadi stated that some regional governments had "placed their territory and facilities at the service of aggressive action against Iran", and therefore were not in a place to demand reparations. He said that these governments should compensate Iran for all damages. Tehran's demands for a?end to the war? include the release of billions of US dollars in frozen assets as well as lifting of U.S. sanctions and international sanctions, and recognition of Tehran's sway over Strait of Hormuz. Reporting by Eman Aboushassira, Editing by Mark Potter & Edmund Klamann

• Oman Air orders jets to transform into profit

  Oman Air will order 'jets' to replace its aging planes, and to serve more routes, according to CEO Con Korfiatis. Korfiatis did not reveal a timeline for the deal or the number of aircraft, but he said that he was interested in narrowbody jets equipped with lay-flat mattresses, which appeal to premium travelers and are able to carry fewer passengers on long-haul flights, such as Kuala Lumpur, and Istanbul. He said, "We've been doing long-haul flights on narrowbody aircraft in the past couple of years that we didn't do before." "We see a market opportunity with this product." In March, Oman and Saudi Arabia 'offered alternate travel routes for tens thousands of Gulf residents trying to flee Iranian airstrikes after the U.S./Israeli war against Iran. Oman Air had to accommodate four to five time the usual number of passengers in the event of a crisis. The carrier is expecting to fly at least as many flights in 2026 compared to last year. Korfiatis stated that "having so many people cross the border to fly was a challenge in ways we have never seen before." "We've not seen our airport this full." He explained that in certain cases, customers would need to buy their tickets before crossing the border. He said that some people at the border didn't own a vehicle, so he set up bussing services. The airline's plan to transform from a losing airline may allow passengers who waited in Oman before departing the Gulf to return. He said that "generally, people who come to Oman come back." (Reporting by Allison Lampert, Rio de Janeiro; editing by Manuela andreoni and Chris Reese).

• Fuel shock in Iran War slashes 2026 profit forecast for global airlines

  On Sunday, the global airline industry almost halved their 2026 profit projection, citing conflict in the Middle East, which has?driven fuel prices up, disrupted important air corridors, and exposed?the 'fragility of an industry operating on thin margins. In its annual report, the International Air Transport Association (IATA), which represents over 370 airlines and accounts for about 85% global air traffic said that it expects to see a combined profit of $23 Billion in 2026. This is well below an earlier projection of $41 Billion, down from $45 Billion in 2025. Even though passenger demand is resilient, planes are flying fuller, and revenues will rise to over $1.1 trillion, the downgrade highlights airlines' vulnerability to geopolitical events and fuel volatility. Willie Walsh, IATA's Director General, said that the two main factors have led to a reduction in the forecast. "The first is the significant rise in jet fuel prices which has been higher than I thought anyone would have anticipated, and the second factor has been the disruption of the airlines in Gulf region," Walsh said at the annual meeting of the IATA group in Rio de Janeiro. Walsh predicted that some smaller airlines would go bankrupt this year or next due to higher fuel prices. Spirit Airlines, the U.S.'s low-cost airline, shut down in December. It was dubbed "the first airline victim of the Iran war". Walsh stated that airlines are expected to cut routes which are not profitable to protect their margins. Fares, however, are unlikely to drop soon since they have risen dramatically since the beginning of the Iran War. Walsh explained that fares would likely remain high in an environment where the demand is still strong, but the capacity has decreased. A FUEL COST SHOCKS OUT HIGHER REVENUES Airline reroutes flights to avoid restricted or closed airspace due to the Middle East conflict triggered by U.S. airstrikes against Iran. This adds hours?to some trips, increases fuel consumption and puts strain on already limited capacity. Oil prices are surging on the back of fears about supply disruptions. This has pushed jet fuel prices higher, and widened refinery margins. Airlines have seen a sharp increase in their largest cost. Gulf airlines like Emirates, Qatar Airways, and Etihad Airways are facing the most operational uncertainty following a near-complete closure of regional airspace? at the start of the conflict. Walsh said that most regions would remain profitable but at a lower level, whereas Middle East airlines will likely slip into the negative due to conflict and weaker demand. IATA expects the fuel bill for airlines to rise to $350 billion by this year, from about $252 billion last year. Fuel accounts for?nearly a third? of operating costs. This is reducing the profitability of airlines per passenger. Airlines are now expected to earn $4.50, or roughly half what they earned last year. IATA anticipates that industry revenues will rise 9.4% this year to $1.16 trillion, driven by a steady travel demand and higher fares. They also expect to see a growing income from extras like seat upgrades and onboard service. The sector is also being squeezed by aircraft shortages. Airline delays in Boeing and Airbus deliveries force airlines to use older, less fuel efficient planes for longer. This increases maintenance costs and stifles efforts to improve margins.

• Etihad Airways purchases widebody aircraft, returns to pre-war capacity by June

  In an interview, CEO Antonoaldo Neves stated that Etihad Airways will be ordering more widebody aircraft to meet its 8% increase in flights over the previous year by June 15. On Saturday, he said that Abu Dhabi's airline is purchasing widebody planes in the "double digits" but declined to provide any further details. Neves stated that Etihad has restored flights following the cuts made in March, as the U.S. and Israeli war against?Iran shifted regionally, increasing fuel prices. Etihad, he said, "doesn't plan to reduce?costs? by cutting flights for the time being." He said, "The largest cost we have is an empty plane." "So I cut costs by not having empty planes."

• Southwest Airlines sticks with Boeing after MAX 7 delays push service back to 2027

  Southwest Airlines' Chief Operating Officer Andrew Watterson said on Saturday that the airline expects Boeing's long delayed 737 MAX 7 to enter revenue service by 2027. The company is also focused on adding more aircraft types in order to reduce risks, rather than focusing on another type of aircraft. Watterson responded that Southwest Airlines was not interested in Airbus's A220. Watterson stated in an interview at the International Air Transport Association annual meeting in Rio de Janeiro that diversification does not come from a second type of fleet. "A second fleet type can increase risk." It doesn't make any sense to ignore that," he said. The?MAX 7 still awaits certification by the U.S. Federal Aviation Administration. Watterson stated that Southwest will spend about six months on?internal projects after certification. This includes adding the aircraft to their operating specifications and manuals. He said that the clock begins when they certify it. Watterson stated that the MAX 7 delays had not forced Southwest Airlines to delay specific routes but limited its ability better match aircraft sizes with demand. He said the penalty is too many large aircraft and not enough small jets in markets or periods of lower demand. STARLINK ROLLOUT Southwest also?moves ahead with Starlink-powered Wi-Fi. However, Tony Roach said that the carrier hasn't ruled out Amazon’s Leo satellite -network. Southwest Airlines' chief customer and brand officer, Tony Roach, said the airline expects to be able to service an aircraft with Starlink by the end of this month. Executives said that the airline has set a goal of equipping 300 aircraft by the end of the year with Starlink. However, the speed depends on the ability of Starlink to supply the equipment. Watterson said, "Our 'tech ops' can retrofit as quickly as Starlink can supply," Watterson added. Watterson said that activist investor Elliott Investment Management was correct to say Southwest had been slow to change despite the fact that many changes were already underway. Elliott Investment Management was unambiguously?correct in that we were too late," he said. Watterson said that investors underestimated Southwest's customers' willingness and ability to pay for new services, and revenue per available seat-mile would be the "litmus" test for whether or not the changes were working. (Reporting by Rajesh Kumar Singh in Rio de Janeiro)

• Brazilian airline Azul is planning further frequency reductions as the fuel shock bites

  Brazilian airline Azul will increase 'capacity reductions' amid increased jet fuel prices related to the Iran War. The carrier will also continue reducing flying in order to save money and protect cash flow, according to CEO John Rodgerson. Rodgerson said that the largest companies in the industry were cutting capacity to better match demand and higher costs, and Azul was following suit. The company would go beyond the earlier cuts, as the conflict continues. "When we first made our?cuts, I thought that the war would have been over by now," said he in an interview Friday in preparation for a global airline chiefs meeting in Rio de Janeiro. "But the problem is continuing. We'll continue to cut frequencies opportunistically, to make sure that we only fly things that are sensible." Rodgerson stated that the majority of Azul's reductions in the second quarter were on international routes. Further adjustments would focus on domestic frequencies, rather than pulling out entire cities. "Do you fly from Curitiba to Rio six times per day?" With these fuel prices it might be better to fly four times a day. He added that the airline prioritized its hubs at Campinas and Belo Horizonte. "We haven't yet pulled cities, but it's always an option." You must first reduce frequencies and?utilization. You don't want an aircraft operating 13 or 14 hours per day at a time when fuel costs double. Rodgerson stated that Azul's strong balance sheet following a major restructuring of debt put it in a better position to adapt than its peers. In February, it exited Chapter 11 proceedings with the backing of United Airlines and American Airlines. Azul expects that pricing will remain under pressure in the second quarter, which is traditionally weaker, but he believes there's room for higher fares as demand increases into the third and forth quarters. (Reporting and editing by Andrew Heavens; Additional reporting and editing by Luciana magalhaes).

• UAE markets benefit despite the stalled US/Iran peace talks

  The stock markets of 'the United Arab Emirates' closed higher on Friday. Dubai outperformed its regional peers despite the fading hopes of a diplomatic breakthrough between Israel and the U.S. Hezbollah, a militia backed by Iran, rejected a ceasefire on Thursday in?Lebanon and Israel announced it?wouldn't withdraw troops from the?country?undermining U.S. president Donald Trump's attempts to halt fighting?and achieve a peace?deal? with Tehran. Dubai's main index of shares rose by 0.9%, boosted by gains in the industrial and utilities sectors. Salik Company, a toll operator, increased by 1.6% while Emirates Central Cooling Systems grew 2.5%. Abu Dhabi's benchmark indices settled 0.3% higher, with the largest utility company Abu?Dhabi?National?Energy rising 6.2%. Alef Education's stock rose 1% following the?full migration to Microsoft Azure of its digital learning ecosystem with Core42's sovereign cloud capability. Brent crude was down?0.32% to $94.73 per barrel at 1232 GMT. (Reporting from Mohd. Edrees, Bengaluru. Editing by Shailesh. Kuber.)