Business and Economy

United States President Donald Trump has called on oil executives to rush back into Venezuela as the White House looks to quickly secure $100bn in investments to revive the country’s ability to fully tap into its expansive reserves of petroleum.

Trump, as he opened the meeting with oil industry executives on Friday, sought to assure them that they need not be sceptical of quickly investing in and, in some cases, returning to the South American country with a history of state asset seizures as well as ongoing US sanctions and the current political uncertainty.

“You have total safety,” Trump told the executives. “You’re dealing with us directly and not dealing with Venezuela at all. We don’t want you to deal with Venezuela.”

Trump added: “Our giant oil companies will be spending at least $100bn of their money, not the government’s money. They don’t need government money. But they need government protection.”

Trump welcomed the oil executives to the White House after US forces earlier on Friday seized their fifth tanker over the past month that has been linked to Venezuelan oil. The action reflected the determination of the US to fully control the exporting, refining and production of Venezuelan petroleum, a sign of the Trump administration’s plans for ongoing involvement in the sector as it seeks commitments from private companies.

“At least 100 Billion Dollars will be invested by BIG OIL, all of whom I will be meeting with today at The White House,” Trump said on Friday in a predawn social media post.

The White House said it invited oil executives from 17 companies, including Chevron, which still operates in Venezuela, as well as ExxonMobil and ConocoPhillips, which both had oil projects in the country that were lost as part of a 2007 nationalisation of private businesses under former President Nicolas Maduro’s predecessor, Hugo Chavez.

“If we look at the commercial constructs and frameworks in place today in Venezuela, today it’s un-investable,” said Darren Woods, ExxonMobil CEO. “And so significant changes have to be made to those commercial frameworks, the legal system, there has to be durable investment protections and there has to be change to the hydrocarbon laws in the country.”

Benjamin Radd, a senior fellow at the UCLA Burkle Center for International Relations, told Al Jazeera that he had “noted the hesitation and less-than-full-throated enthusiasm for re-entering the Venezuelan market”, citing Woods, who told the gathering that the company had its assets there seized twice already.

“The bottom line is that until Trump can outline and provide assurances of a plan towards political stability, it will continue to be a risky endeavour for these oil companies to re-engage Venezuela. And what is there is a regime change in Iran in the days or weeks or months to come, and all of a sudden that re-emerges as a place where Western oil companies can do business? Even though the reserves don’t equal what Venezuela has, the risk is far less, and the infrastructure is more sound,” Radd said.

Other companies invited included Halliburton, Valero, Marathon, Shell, Singapore-based Trafigura, Italy-based Eni and Spain-based Repsol, as well as a vast swath of domestic and international companies with interests ranging from construction to the commodity markets.

Wait and see

Large US oil companies have so far largely refrained from affirming investments in Venezuela, as contracts and guarantees need to be in place. Trump has suggested that the US would help to backstop any investments.

Venezuela’s oil production has slumped below one million barrels per day (bpd). Part of Trump’s challenge to turn that around will be to convince oil companies that his administration has a stable relationship with Venezuela’s interim President Delcy Rodriguez, as well as protections for companies entering the market.

While Rodriguez has publicly denounced Trump and the abduction and ouster of Maduro, the US president has said that to date, Venezuela’s interim leader has been cooperating behind the scenes with his administration.

Most companies are in a wait-and-see mode as they await terms from the Venezuelans, stability and wait to find out how much the US government will actually help, said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security.

Those like Chevron that are already in there are in a better position to increase investments as they “already have sunk costs”, Ziemba pointed out.

Ziemba said she expects a partial ramp-up in the first half of this year as the volumes that were going to China – Venezuelan oil’s largest buyer – are redirected and sold via the US. “But long-term investments will be slow,” she said as companies wait to find out about US commitments and Venezuelan terms.

Tyson Slocum, director of the consumer advocacy group Public Citizen’s energy programme, criticised the gathering and called the US military’s removal of Maduro “violent imperialism”. Slocum added that Trump’s goal appears to be to “hand billionaires control over Venezuela’s oil”.

So far, the US government has not said how the revenue from the sale of Venezuelan oil will be shared and what percentage of the sales would be given to Caracas.

Ziemba said she was worried that “if funds do not go to Venezuela for basic goods, among other local needs, there will be instability that will deepen the country’s economic crisis“.

In the news conference on Friday, Trump said the US had a formula for distributing payments. UCLA’s Radd said that “if the US can or will guarantee security and stability, it makes sense for it to expect a return on investment in that sense. But then this makes it sound more like a mafia-style ‘racket’ than a government-led operation”, he told Al Jazeera.

Meanwhile, the US and Venezuelan governments said on Friday they were exploring the possibility of restoring diplomatic relations between the two countries, and a delegation from the Trump administration arrived in the South American nation on Friday.

The United States government has said it aims to control Venezuelan oil sales indefinitely.

“We need to have that leverage and that control of those oil sales to drive the changes that simply must happen in Venezuela,” Energy Secretary Chris Wright said on Wednesday.

His comments come days after US forces abducted Venezuelan leader Nicolas Maduro on Saturday. Since then, the administration of US President Donald Trump has announced a deal under which Venezuela would turn over 30 million to 50 million barrels of sanctioned oil to the US to sell.

That comes against a backdrop of demands that Venezuelan government officials open up access to US oil companies or risk further military action.

On Friday, executives from several major oil companies, including ExxonMobil, ConocoPhillips, and Chevron, are slated to meet with the president to discuss potential investments in Venezuela.

Can the US control Venezuelan oil sales indefinitely?

“The US federal government can absolutely intervene, make demands, capture what it wants, and redirect those barrels accordingly. I don’t know of anything that would meaningfully interfere with the federal government if that’s what it decided to do,” Jeff Krimmel, founder of Krimmel Strategy Group, a Houston, Texas-based energy consulting firm, told Al Jazeera.

There are, however, geopolitical hurdles. The US has less leverage than it did more than two decades ago when the US military and its allies entered Iraq, another oil-rich country. Today, other superpowers could stand in the way in ways they did not in 2003.

“When we went into Iraq, we were living in a unipolar moment as the world’s only great power. That era is over. China is now a great power, and most experts consider it a peer competitor. That means it has ways to hurt the US economy and to push back militarily, including through proxy conflicts, if it chooses to oppose such actions,” Anthony Orlando, professor of finance and law at California State Polytechnic University, Pomona, told Al Jazeera.

China is the largest purchaser of Venezuelan crude, although it only imports about 4 percent of its oil from the South American nation.

“It’s a question of whether they want to draw a line in the sand with the United States and say, ‘You can’t do this, because if we allow it, you’ll keep pushing further,’” Orlando said.

“If you’re a minor power like Venezuela, not China or Russia, you’re a country vulnerable to US intervention. That creates an incentive to align more closely with China or Russia to prevent it from happening, and that’s not a good outcome for the United States,” Orlando continued.

In the days since Maduro’s abduction, members of the Trump administration have also renewed calls to take over Greenland.

How does this compare with Iraq?

The US intervention in Venezuela has been compared to its involvement in Iraq, which began under the administration of former President George W Bush in 2003. At the time, Iraq had the second-largest oil reserves in the world, with 112 billion barrels.

However, production was limited. Prior to the invasion, Iraq produced 1.5 million barrels per day (bpd), rising to 4.5 million bpd by 2018.

While the Iraqi government retained ownership of oil, US companies were often given no-bid contracts to operate there, including ExxonMobil and BP, and the majority of sales went to Asian and European markets.

In 2021, Iraq’s then-President Barham Salih claimed that an estimated $150bn in money stolen through corrupt deals had been “smuggled out of Iraq” since the 2003 US-led invasion.

Unlike during the Bush administration and its aims for Iraq’s oil, the Trump administration has been explicit about the role of oil in its attack on Venezuela.

“The difference between Iraq and this is that [Bush] didn’t keep the oil. We’re going to keep the oil,” Trump said in a conversation with MS Now anchor Joe Scarborough.

Comparatively, in 2002, prior to the US invasion, then-Secretary of Defense Donald Rumsfeld asserted that the operation to take control of post-war reconstruction had “literally nothing to do with oil”.

“When the Bush administration went into Iraq, they claimed it wasn’t about that, even though there was substantial evidence it was a factor. This time it’s more explicit, so it’s clear it will impact oil markets. [But] one lesson from the Iraq war is that it’s easier said than done,” Orlando, the professor, told Al Jazeera.

Will this benefit oil companies?

Analysts argue that investments in Venezuela might not actually benefit oil companies due to rising economic uncertainty, the need for major infrastructure improvements, and the fact that large companies like ExxonMobil and Chevron already have capital programmes planned for the remainder of the decade.

“Either [the companies] will have to take on more debt or issue more equity to raise the capital needed, or they’ll have to divert capital expenditures from other regions into Venezuela. In either scenario, I expect substantial shareholder pushback,” Krimmel, the energy consultant, said.

Increased production will also require infrastructure improvements. Venezuelan oil is dense, which makes it more difficult and expensive to extract compared to oil from Iraq or the US.

Venezuelan oil is often blended with lighter grades from the US. It is comparable in density to Canadian oil, which, despite tensions between Ottawa and Washington, comes from a US ally with more modern extraction infrastructure.

“I don’t think Canada’s going to be too happy about all this,” Orlando said.

However, Chevron, the only US company currently operating in Venezuela, is seeking authorisation from Washington to expand its licence to operate in the country after the US placed restrictions on it last year, the Reuters news agency reported on Thursday, citing unnamed sources.

The US role in energy, particularly oil and gas, has surged in recent years amid the rise of fracking technology. The US is now the largest producer of oil in the world. But recent cuts to alternative energy programmes and increasing energy demands from the artificial intelligence industry have led Republicans to double down on expanding the oil and gas sector.

“There is an oil supply surplus. Even if we were in a supply deficit right now, military action in Venezuela wouldn’t unlock incremental barrels quickly. So even if you were trying to solve a short-term supply deficit, which, to be clear, we do not have, Venezuela wouldn’t be an answer because it would take too long and be too expensive to ramp production up,” Krimmel added.

While Venezuela holds the world’s largest oil reserves, the OPEC member represents only 1 percent of global oil output.

Currently, Chevron is the only US company operating in Venezuela. ExxonMobil and ConocoPhillips operated in Venezuela before Hugo Chavez nationalised the oil sector in 2007, leading to a downturn in production over years of disinvestment and poorly run facilities. In the 1990s, Venezuela produced as much as 3.5 million bpd. That has since fallen due to limited investment, with production averaging 1.1 million bpd last year.

“Venezuela’s infrastructure has deteriorated under both the Chavez and Maduro regimes. While they are extracting oil, returning to production levels from 10 or 20 years ago would require significant investment,” Orlando said.

United States President Donald Trump has issued a stern warning to defence contractors that supply the US military, accusing them of profiteering.

In a Truth Social post on Wednesday, he threatened to take action if the companies failed to take specific actions, including capping executive pay, investing in the construction of factories and producing more military equipment at a faster clip.

“MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH,” Trump wrote at one point in his lengthy, 322-word post.

“It must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives, rather than borrowing from Financial Institutions, or getting the money from your Government.”

Trump singled out the technology company Raytheon as the worst offender, in his eyes.

“I have been informed by the Department of War that Defense Contractor, Raytheon, has been the least responsive to the needs of the Department of War, the slowest in increasing their volume, and the most aggressive spending on their Shareholders rather than the needs and demands of the United States Military,” Trump wrote in a follow-up post.

The president threatened to sever government ties with Raytheon, now known as RTX, which earns billions from its defence contract work.

Just last August, the Department of Defence awarded the firm $50bn – the maximum possible – for a 20-year contract to supply the military with equipment, services and repairs.

“Our Country comes FIRST, and they’re going to have to learn that, the hard way,” Trump warned.

Defence spending fuels a significant portion of the US economy: As of 2024, Defence Department spending represented approximately 2.7 percent of the US gross domestic product (GDP).

Normally, the total defence budget hovers around $1 trillion. But in a Wednesday evening post on Truth Social, Trump announced that he would petition congressional Republicans to boost that amount to a record $1.5 trillion for fiscal year 2027.

“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” Trump wrote.

Still, Trump’s threats sent stocks for defence contractors plummeting, amid uncertainty over the future of the high-stakes industry.

Since taking office for a second term, Trump has taken an aggressive, hands-on approach to private companies that have ties to national security concerns.

In June, for instance, the Trump administration was awarded a “golden share” in the metal company US Steel, in exchange for giving a green light to its merger with Japan’s Nippon Steel. That share allows the Trump administration to essentially have a veto over any major action US Steel may take to reorganise or dissolve.

Then, in August, the technology firm Intel struck a deal to sell the US government a 10-percent stake in its company, amid pressure from Trump.

The Trump administration has continued to snap up stakes in other private firms, most notably mining companies involved in the production of rare earth minerals and other raw materials used in technology.

It is not yet clear how Trump plans to enforce his demands for the defence contractors he blasted in Wednesday’s social media messages. Nor is it certain that Trump could legally enforce his orders.

But Trump aired a list of grievances against the companies, including that their executives’ pay was simply too large.

“Executive Pay Packages in the Defense Industry are exorbitant and unjustifiable given how slowly these Companies are delivering vital Equipment to our Military, and our Allies,” he wrote at one point.

At another, he called on the private firms to invest in new construction projects, a request he has made across industries, from the pharmaceutical sector to automakers.

“From this moment forward, these Executives must build NEW and MODERN Production Plants, both for delivering and maintaining this important Equipment, and for building the latest Models of future Military Equipment,” Trump said.

“Until they do so, no Executive should be allowed to make in excess of $5 Million Dollars which, as high as it sounds, is a mere fraction of what they are making now.”

He also complained that the defence companies were “far too slow” in offering repairs for their equipment.

Defence contractors are responsible for a range of services and products, from software to training to missiles and tanks. RTX, for example, designed the Patriot Missile, the US’s flagship surface-to-air missile system, and it keeps the US military supplied with spare parts and other updates.

Based in Virginia, the company boasted sales exceeding $80bn in 2024. Just this week, the US Federal Aviation Administration (FAA) awarded RTX a $438m contract to update its radar system.

Still, Trump maintained that too much of that income was going to shareholders, executive pay and stock buybacks, wherein a company purchases its own shares in order to limit their supply and increase their value.

“Defense Contractors are currently issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment,” Trump wrote.

“This situation will no longer be allowed or tolerated!”

The United States says it will control sales of Venezuelan oil “indefinitely” and decide how the proceeds of those sales are used, as President Donald Trump’s administration consolidates control over the South American country after abducting its president.

The US Department of Energy said on Wednesday that it had “begun marketing” Venezuelan oil on global markets and all proceeds from the sales “will first settle in US-controlled accounts at globally recognized banks”.

“These funds will be disbursed for the benefit of the American people and the Venezuelan people at the discretion of the US government,” it said.

“These oil sales begin immediately with the anticipated sale of approximately 30-50 million barrels. They will continue indefinitely.”

The announcement comes just days after the Trump administration abducted Venezuelan President Nicolas Maduro on Saturday in what legal experts say was a clear violation of international law.

The US has said it plans to “run” the country and take control of its vast oil reserves, with Trump saying on social media on Tuesday that Caracas would hand between 30 and 50 million barrels of oil over to Washington.

The US actions against Venezuela come amid a months-long pressure campaign by the Trump administration against Maduro, who has been charged in New York with drug trafficking offences that he denies.

That has included a partial US naval blockade against Venezuela and the seizure of several vessels that the Trump administration says were transporting oil to and from the country in violation of US sanctions.

Earlier on Wednesday, US special forces seized two Venezuela-linked vessels – including a Russian-flagged ship in the North Atlantic – for allegedly breaching those sanctions.

The seizures came as senior US officials briefed lawmakers on Capitol Hill about the Trump administration’s plans in Venezuela.

Reporting from Washington, DC, Al Jazeera’s Alan Fisher said most Republicans have backed Trump’s actions while Democrats have raised a slew of questions.

That includes “how long this operation in Venezuela will continue, what it will cost, [whether] any American servicemen actually be deployed on the ground in Venezuela, and what is the Venezuelan reaction,” Fisher explained.

“The Trump administration [is] hoping to get everyone on side before the end of the day,” he added.

Democratic Senator Elizabeth Warren wrote on social media that Wednesday’s briefing was “worse” than imagined.

“Oil company executives seem to know more about Trump’s secret plan to ‘run’ Venezuela than the American people. We need public Senate hearings NOW,” she said.

Three-phased plan

US Secretary of State Marco Rubio told reporters on Wednesday that the Trump administration is pursuing a three-phased plan that begins with the sales of Venezuelan oil.

“That money will then be handled in such a way that we will control how it’s dispersed in a way that benefits the Venezuelan people, not corruption, not the regime,” Rubio said.

The second phase would see US and other companies gain access to the Venezuelan market, and “begin to create the process of reconciliation nationally … so that opposition forces can be amnestied and released from prisons or brought back to the country”.

“And then the third phase, of course, would be one of transition,” Rubio added.

Gregory Brew, a senior analyst on Iran and energy at Eurasia Group, said the US announcement about controlling Venezuelan oil sales hints at “a return to the concessionary system” in place before the 1970s.

Brew explained in a social media post that, under that system, “producer states own the oil but it is Western firms that manage production and marketing, ultimately retain the bulk of the profits”.

A group of United Nations experts also warned that recent statements from Trump and other administration officials about plans to “run” Venezuela and exploit its oil reserves would violate international law.

Specifically, the experts said the US position contravenes “the right of peoples to self-determination and their associated sovereignty over natural resources, cornerstones of international human rights law”.

“Venezuela’s vast natural resources, including the largest proven oil reserves in the world, must not be cynically exploited through thinly veiled pretexts to legitimise military aggression, foreign occupation, or regime-change strategies,” they said.

Political situation unstable

Renata Segura, the Latin America and Caribbean programme director at the International Crisis Group, noted Venezuelan authorities have not commented on the US saying it plans to control sales of the country’s oil.

“And so we have to assume that either [the Venezuelan authorities] have accepted these terms, or that they’re just going to be forced to accept them,” Segura told Al Jazeera.

Venezuelan Vice President Delcy Rodriguez was sworn in as president earlier this week following Maduro’s abduction, stressing on Tuesday that “there is no foreign agent governing Venezuela” despite US claims to “run” the country.

Segura explained, “There’s a lot of debate within the [Venezuelan] regime itself about how to move forward” amid the US pronouncements, stressing the political situation remains far from stable.

“It’s very important what the army might do,” she said.

“The military forces in Venezuela control enormous amounts of power – both economic but also on the streets – and there might be a moment in which they think they’re not going to be on board with this particular arrangement that the United States is presenting.”

The board of Warner Bros Discovery (WBD) has unanimously turned down Paramount Skydance’s latest attempt to acquire the studio, saying its revised $108.4bn hostile bid amounted to a risky leveraged buyout that investors should reject.

In a letter to shareholders on Wednesday, the WBD board said Paramount’s offer hinges on “an extraordinary amount of debt financing” that heightens the risk of closing. It reaffirmed its commitment to streaming giant Netflix’s $82.7bn deal for the film and television studio and other assets.

Some investors, however, pushed back on Warner Bros. Pentwater Capital Management CEO Matthew Halbower said that the media giant’s board had “made an error” by not considering Paramount’s bid.

On CNBC on Wednesday, Halbower called the deal “economically superior”.

Paramount’s financing plan would saddle the smaller Hollywood studio with $87bn in debt once the acquisition closes, making it the largest leveraged buyout in history, the Warner Bros board told shareholders after voting against the $30-per-share cash offer on Tuesday. The letter accompanied a 67-page amended merger filing that laid out its case for rejecting Paramount’s offer.

Paramount deal ‘remains inadequate’

The revised Paramount offer “remains inadequate particularly given the insufficient value it would provide, the lack of certainty in Paramount Skydance ability to complete the offer, and the risks and costs borne by WBD shareholders should Paramount Skydance fail to complete the offer”, the Warner Bros board wrote.

Paramount, which has a market value of about $14bn, proposed to use $40bn in equity, which would be personally guaranteed by Oracle’s billionaire co-founder Larry Ellison, whose son David is Paramount’s CEO, and $54bn in debt to finance the deal.

Its financing plan would further weaken its credit rating, which S&P Global already rates at junk levels, and strain its cash flow – heightening the risk that the deal will not close, the Warner Bros board said. Netflix, which has offered $27.75 a share in cash and stock, has a $400bn market value and investment-grade credit rating.

The decision keeps Warner Bros on track to pursue the deal with Netflix, even after Paramount amended its bid on December 22 to address the earlier concerns about the lack of a personal guarantee from Ellison, who is Paramount’s controlling shareholder.

Paramount and Netflix have been vying to win control of Warner Bros, and with it, its prized film and television studios and its extensive content library. Its lucrative entertainment franchises include  Harry Potter, Game of Thrones, Friends, and the DC Comics universe; as well as coveted classic films such as Casablanca and Citizen Kane.

Netflix applauds

Netflix co-CEOs Ted Sarandos and Greg Peters welcomed Warner Bros’ decision on Wednesday, saying it recognises the streaming giant’s deal “as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry”.

Warner Bros Chairman Samuel Di Piazza told CNBC that the company was not currently in talks with Paramount but remains open to a transaction with the Ellison-led firm, and both the deals have a path to regulatory approval.

“From our perspective, they’ve got to put something on the table that is compelling,” he said, referring to the Paramount offer.

Wednesday’s filing said Warner Bros’ board met on December 23 to review Paramount’s amended offer and noted some improvements, including Ellison’s personal guarantee and a higher reverse termination fee of $5.8bn, but found “significant costs” associated with Paramount’s bid compared with a Netflix deal.

Warner Bros would be obligated to pay the streaming service a $2.8bn termination fee for abandoning its merger agreement with Netflix, $1.5bn in fees to its lenders and about $350m in additional financing costs. Altogether, Warner Bros said it would incur about $4.7bn in additional costs to terminate its deal with Netflix, or $1.79 per share.

The board repeated some concerns it had laid out on December 17, such as that Paramount would impose operating restrictions on the studio that would harm its business and competitive position, including barring the planned spin-out of the company’s cable television networks into a separate public company, Discovery Global.

Paramount offered “insufficient compensation” for the damage done to the studio’s business, if the Paramount deal failed to close, Warner Bros said.

Paramount “repeatedly failed to submit the best proposal” to Warner Bros shareholders, the board wrote, “despite clear direction” on the deficiencies in its bid and potential solutions.

The jockeying for Warner Bros has become Hollywood’s most closely watched takeover battle, as studios race to scale up amid intensifying competition from streaming platforms and volatile theatrical revenues.

While Netflix’s offer has a lower headline value, analysts have said it presents a clearer financing structure and fewer execution risks than Paramount’s bid for the entire company, including its cable TV business.

“WBD does not want to sell to Paramount, so it will keep rejecting Paramount as long as it is able to,” said Ross Benes, an analyst at eMarketer.

“But this process is not over … Paramount will have opportunity to make further attempts.”

Harris Oakmark, Warner Bros’ fifth-largest investor, previously told Reuters that Paramount’s revised offer was not “sufficient”, noting it was not enough to cover the breakup fee.

Paramount has argued its bid would face fewer regulatory obstacles, but a combined Paramount-Warner Bros entity would create a formidable competitor to industry leader Disney and merge two major television operators and two streaming services.

The valuation of Warner Bros’ planned Discovery Global spin-off, which includes cable television networks CNN, TNT Sports and the Discovery+ streaming service, is seen as a major sticking point. Analysts peg the cable channels’ value at up to $4 per share, while Paramount has suggested just $1.

Lawmakers from both parties have raised concerns about further consolidation in the media industry, and US President Donald Trump has said he plans to weigh in on the landmark acquisition.

On Wall Street, Warner Bros Discovery is up 0.3 percent in midday trading amid the news of the rejected bid. Netflix is also up 0.3. Meanwhile, Paramount is down 0.1 percent.

Caracas, Venezuela – The normally noisy capital of Caracas was eerily quiet on Monday, two days after the United States bombed the city and abducted Venezuela’s leader, Nicolas Maduro.

But many “caraqueños” nevertheless ventured out to buy food and other necessities, albeit at marked-up prices.

The tense atmosphere on Caracas’s streets was yet another sign of the uncertainty facing everyday Venezuelans, as they face the looming threat of further US intervention.

Local authorities have called for regular economic activity to continue in Venezuela. But some stores nevertheless remained closed, while households stocked up on basic supplies in case of shortages.

At Caracas’s central market, Quinta Crespo, many shopkeepers had shuttered their businesses for fear of unrest and looting.

Lines of 10 or more people often stretched outside the stores that remained open, despite the midday sun. Officers from the Bolivarian National Police patrolled outside to keep the queues calm.

Shoppers told Al Jazeera they were buying non-perishables, like corn flour, rice and canned goods, in case the security situation deteriorated in the capital.

“I’m looking for basic necessities, given the situation the country is going through,” said Carlos Godoy, 45, who lives in the western Caricuao district of Caracas. “We are waiting to see what happens. We are all in suspense, in uncertainty.”

Among the most expensive products Godoy saw on his shopping trip was powdered milk, which he said is selling for $16 per kilogram.

Another shopper, Betzerpa Ramírez, said she felt calm, despite the early-morning attack on Saturday. While she felt no need to hoard food items, she did note that prices for some goods have increased.

“Hygiene items are more expensive, even more than food,” she said.

Alexandra Arismendi, who works in a mobile phone shop at the Sambil mall in one of Caracas’s busiest shopping districts, expressed frustration with some of the recent price spikes.

The price of eggs, she said, was “exaggerated”.

“Prices are high,” she said. “A carton of eggs is selling for $10, which is beyond normal.”

Her colleague at the mobile shop, 23-year old María Gabriela, lamented the slump in sales, as shoppers stay indoors for fear of further unrest.

The normally bustling mall had largely emptied of its usual crowds. Gabriela herself was hesitant to show up for work. She travelled by taxi to avoid public transport.

“We thought people would be looking for chargers or power banks [for possible power failures], but they have been looking for other things,” Gabriela said.

“There has been no usual activity. It has been one of the strangest days in recent months.”

Venezuelans have become accustomed to volatile price increases and supply shortages over the past decade. Experts often blame government corruption, mismanagement and US sanctions for destabilising Venezuela’s economy.

During Maduro’s presidency, oil prices plummeted, sending Venezuela’s petroleum-heavy economy into free fall.

By 2018, inflation hit more than 130,000 percent, according to the country’s central bank. The COVID-19 pandemic also dealt the economy a wallop, leading to shortages of food and health supplies.

Maduro’s government has not published inflation statistics since he claimed victory in 2024’s disputed presidential election.

It remains unclear to what degree normalcy will return to Venezuela after the US attack on Saturday.

Early that morning, the administration of US President Donald Trump launched munitions against military installations in the states of Caracas, Aragua, Miranda and La Guaira.

At least 80 people died in the attack, according to an anonymous Venezuelan official quoted in The New York Times.

The US military offensive was over in a matter of hours. But Trump has warned he could authorise a “second wave” of attacks, should his demands for Venezuela not be fulfilled.

The Venezuelan government has also declared a state of emergency to “immediately begin the national search and capture of everyone involved in the promotion or support for the armed attack by the United States”.

It has maintained that Maduro remains the leader of Venezuela, despite his abduction to the US.

To Arismendi, the tension in Venezuela has not yet reached the level seen after the 2024 election, when thousands of protesters took to the streets.

“I feel that there was more tension around the elections,” said Arismendi. “Thank God we’re not at that level right now, but I feel like we’re not that far off either.”

BREAKINGBREAKING,

US president says oil will be sold at market prices and that he will control resulting revenues.

United States President Donald Trump has announced that Venezuela will turn over between 30 and 50 million barrels of sanctioned oil.

“This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!” Trump said on his platform Truth Social on Tuesday.

“I have asked Energy Secretary Chris Wright to execute this plan, immediately. It will be taken by storage ships, and brought directly to unloading docks in the United States.”

More to follow…

The United States Supreme Court is expected to rule on a case about the legality of President Donald Trump’s tariffs.

The high court on Tuesday added a non-argument/conference date on its website, indicating that it could release its ruling, although the court does not announce ahead of time which rulings it intends to issue.

The challenge to Trump’s tariffs has been one of the most closely watched cases on the court’s docket amid the broader impact on the global economy.

In a social media post on Friday, Trump said such a ruling would be a “terrible blow” to the US.

“Because of Tariffs, our Country is financially, AND FROM A NATIONAL SECURITY STANDPOINT, FAR STRONGER AND MORE RESPECTED THAN EVER BEFORE,” Trump said in another post on Monday.

However, data on this is mixed. The US gross domestic product (GDP) grew by 4.3 percent in the third quarter of 2025, marking the biggest increase in two years. Meanwhile, US job growth has slowed, with sectors heavily exposed to tariffs seeing little to no job growth.

“Jobs in sectors with higher import exposure grew more slowly than jobs in sectors with lower import exposure, suggesting tariffs may have weighed on employment,” Johannes Matschke, senior economist for the Kansas City branch of the Federal Reserve, said in an analysis in December.

Legal arguments

Trump invoked the International Emergency Economic Powers Act (IEEPA) in February 2025 on goods imported from individual countries to address, what he called, a national emergency related to US trade deficits.

Arguments challenging the legality of the decision began in November. At the time, the court’s liberal and some conservative justices had doubts about the legality of using the 1977 act.

Justice Neil Gorsuch, whom Trump appointed during his first term, was among those sceptical.

“Congress, as a practical matter, can’t get this power back once it’s handed it over to the president,” Gorsuch said at the time.

Chief Justice John Roberts told Solicitor General D John Sauer, who argued on behalf of the administration, that imposing tariffs and taxes “has always been the core power of Congress”.

The act grants broad executive authority to wield economic power in the case of a national emergency.

The matter reached the Supreme Court after the lower courts ruled against the Trump administration, finding that the use of the law exceeded the administration’s authority.

Among the courts that ruled against the White House was the Court of International Trade. In May, the New York court said that Congress, and not the executive branch, has “exclusive authority to regulate commerce”. This decision was upheld in a Washington, DC, appeals court in August.

Legal experts believe it is likely that the high court will uphold lower court decisions.

“My sense is that, given the different justices’ concerns, the Supreme Court will decide that IEEPA does not provide the ability for the Trump administration to adopt the tariffs,” Greg Shaffer, a law professor at Georgetown University, told Al Jazeera.

If the Trump administration were to lose the case, the US would need to refund some of the tariffs.

“It [ruling against the administration] would mean that those who paid tariffs that were imposed illegally would have to be reimbursed. I would think that that would be the outcome,” Shaffer added.

In September, Secretary of the Treasury Scott Bessent said on NBC’s Meet the Press that the US would “have to give a refund on about half the tariffs”.

The Trump administration has said that if the Supreme Court does not rule in its favour, it will use other statutes to push through tariffs.

The administration of United States President Donald Trump is planning to meet with executives from US oil companies later this week to discuss boosting Venezuelan oil production after US forces abducted its leader, Nicolas Maduro, the Reuters news agency has reported, citing unnamed sources.

The meetings are crucial to the administration’s hopes of getting top US oil companies back into the South American nation after its government, nearly two decades ago, took control of US-led energy operations there, the Reuters news agency report said on Monday.

The three biggest US oil companies – Exxon Mobil, ConocoPhillips and Chevron – have not yet had any conversations with the Trump administration about Maduro’s ouster, according to four oil industry executives familiar with the matter, contradicting Trump’s statements over the weekend that he had already held meetings with “all” the US oil companies, both before and since Maduro was abducted.

“Nobody in those three companies has had conversations with the White House about operating in Venezuela, pre-removal or post-removal, to this point,” one of the sources said on Monday.

The upcoming meetings will be crucial to the administration’s hopes to boost crude oil production and exports from Venezuela, a former OPEC nation that sits atop the world’s largest reserves, and whose crude oil can be refined by specially designed US refineries. Achieving that goal will require years of work and billions of dollars of investment, analysts say.

It is unclear what executives will be attending the upcoming meetings, and whether oil companies will be attending individually or collectively.

The White House did not comment on the meetings, but said it believed the US oil industry was ready to flood into Venezuela.

“All of our oil companies are ready and willing to make big investments in Venezuela that will rebuild their oil infrastructure, which was destroyed by the illegitimate Maduro regime,” said White House spokesperson Taylor Rogers.

Exxon, Chevron and ConocoPhillips did not immediately respond to requests for comment from Reuters.

One oil industry executive told Reuters the companies would be reluctant to talk about potential Venezuela operations in group settings with the White House, citing antitrust concerns that limit collective discussions among competitors about investment plans, timing and production levels.

Political risks, low oil prices

US forces on Saturday conducted a raid on Venezuela’s capital, arresting Maduro in the dead of night and sending him back to the US to face narcoterrorism charges.

Hours after Maduro’s abduction, Trump said he expects the biggest US oil companies to spend billions of dollars boosting Venezuela’s oil production, after it dropped to about a third of its peak over the past two decades due to underinvestment and sanctions.

But those plans will be hindered by a lack of infrastructure, along with deep uncertainty over the country’s political future, legal framework and long-term US policy, according to industry analysts.

“While the Trump administration has suggested large US oil companies will go into Venezuela and spend billions to fix infrastructure, we believe political and other risks, along with current relatively low oil prices, could prevent this from happening anytime soon,” wrote Neal Dingmann of William Blair in a note.

Material change to Venezuelan production will take a lot of time and millions of dollars of infrastructure improvement, he said.

And any investment in Venezuelan infrastructure right now would take place in a weakened global energy market. Crude prices in the US are down by 20 percent compared with last year. The price for a barrel of benchmark US crude has not been above $70 since June, and has not touched $80 per barrel since June of 2024.

A barrel of oil cost more than $130 in the leadup to the US housing crisis in 2008.

Chevron is the only US major currently operating in Venezuela’s oil fields.

Exxon and ConocoPhillips, meanwhile, had storied histories in the country before their projects were nationalised nearly two decades ago by former Venezuelan President Hugo Chavez.

Conoco has been seeking billions of dollars in restitution for the takeover of three oil projects in Venezuela under Chavez. Exxon was involved in lengthy arbitration cases against Venezuela after it exited the country in 2007.

Chevron, which exports about 150,000 barrels per day of crude from Venezuela to the US Gulf Coast, meanwhile, has had to carefully manoeuvre with the Trump administration in an effort to maintain its presence in the country in recent years.

A US embargo on Venezuelan oil remained in full effect, Trump has said.

The S&P 500 energy index rose to its highest since March 2025, with heavyweights Exxon Mobil rising by 2.2 percent and Chevron jumping by 5.1 percent.

United States President Donald Trump has promised to “take back” Venezuela’s oil reserves and unleash them onto the global market after abducting Venezuelan President Nicolas Maduro.

But exploiting the Latin American country’s vast reserves would face a host of big hurdles, from decrepit infrastructure and legal obstacles to leadership uncertainty in Caracas and an excess supply of oil in the global market, experts say.

Venezuela possesses the world’s largest known oil reserves – estimated to be some 303 billion barrels – but currently produces only a tiny fraction of global output. Its estimated output was 860,000 barrels per day (bpd) in November, less than 1 percent of the world’s total, compared with 3.7 million bpd during peak production in 1970.

The oil sector’s decline has been blamed on the combined effects of US sanctions and years of underinvestment, mismanagement and corruption under Maduro and his left-wing predecessor, Hugo Chavez.

While the Trump administration could boost supply in the short term by lifting sanctions, restoring Venezuela’s output to anything near peak levels would require huge investment and likely take years, according to energy analysts.

‘Venezuela’s oil infrastructure is in poor shape’

Oil prices moved only slightly in trading on Monday amid market expectations that output would remain largely unchanged for the foreseeable future.

“Venezuela’s oil infrastructure is in poor shape overall, due to lack of maintenance for both equipment and oilfield wells,” Scott Montgomery, a global energy expert at the University of Washington, told Al Jazeera.

“The state oil company, PDVSA, is well known to suffer from corruption and lack of expertise – many well-trained people have left the country to work elsewhere – and has been unable to invest in the country’s petroleum sector,” Montgomery added.

Thomas O’Donnell, an energy and geopolitical analyst based in Berlin, Germany, estimated that Venezuela could return to peak production in five to seven years in the “absolute best” circumstances, including a peaceful transfer of power.

“Longer term, if things are sorted out, yes, Venezuela can become one of the world’s biggest producers of oil. As far as how long that takes, that has all to do with the transition and what is put in place to manage that – both the country’s security and also to manage the investments,” O’Donnell told Al Jazeera.

Mixed messaging from Trump administration

Trump’s administration has provided conflicting messages on Washington’s exact plans for Venezuela and its oil reserves.

On Saturday, Trump said the US would “run” Venezuela and that US oil companies were ready to invest billions of dollars to build up the country’s dilapidated infrastructure and “get the oil flowing”.

In interviews with US media on Sunday, US Secretary of State Marco Rubio sought to downplay Trump’s remarks about controlling the country, saying the president was referring to “running policy” and his plans related to spurring private investment, “not securing the oilfields”.

Trump later on Sunday said Washington was “in charge” of the country and was “dealing with” members of the acting administration without providing details.

Under international law, the US has no claim of ownership over Venezuela’s oil reserves, as sovereign states possess the right to control and use their natural resources under the United Nations-endorsed Principle of Permanent Sovereignty over Natural Resources.

Foreign investors, however, can claim compensation when authorities seize their assets.

ExxonMobil and ConocoPhillips were awarded $1.6bn and $8.7bn, respectively, in international arbitration following the Chavez government’s 2007 nationalisation of the oil sector. Caracas did not pay out in either case.

US oil giants, including Chevron, ExxonMobil, and ConocoPhillips, have not commented directly on Trump’s claims about planned investments in Venezuela.

Chevron is the only large US oil company currently operating in Venezuela, the result of an exemption to US sanctions first granted by the administration of former President Joe Biden.

Consultancy Rystad Energy, based in Oslo, Norway, has estimated that Venezuela’s oil sector would need about $110bn in capital investment to return to its mid-2010s output of about 2 million bpd.

Patrick De Haan, an analyst at energy price tracker GasBuddy, said companies may be reluctant to commit to large investments in the country when global oil prices are hovering around $60 a barrel due to a glut of supply.

“It will take a longer amount of time than many likely realise. Oil companies in a low-priced environment of today would likely be cautious investing billions with oil prices already low,” De Haan told Al Jazeera.

“In addition, Trump seizing Maduro could lead to loyalists sabotaging efforts to increase output. A lot would have to go right to yield the most optimistic timelines.”

US companies are likely to carefully weigh political developments in Venezuela following their experiences with the Chavez government’s expropriation of their assets.

“Oil companies are not likely to rush into a situation where the state is in turmoil, security is lacking, and no clear path forward for political stability exists,” the University of Washington’s Montgomery said.

Maduro due in court in New York

Interim President Delcy Rodriguez, who was Maduro’s deputy, is now leading the country following a ruling by Venezuela’s Supreme Court.

Maduro is scheduled to appear in a New York court on Monday to face charges related to alleged drug trafficking and working with criminal gangs.

Venezuela’s government has condemned the Trump administration over Saturday’s bombing and overthrow of Maduro, labelling his capture a “cowardly kidnapping”.

Russia, China, Iran and Brazil, among other countries, have accused Washington of violating international law, while nations including Israel, Argentina and Greece have welcomed Maduro’s forced removal.

OPEC, which sets limits on production for its 12 members, including Venezuela, is another factor in the Latin American country’s potential oil output.

“Venezuela is a member of OPEC, and like many countries, may become more actively subject to quotas if output climbs,” De Haan said.

Phil Flynn, a market analyst at the Price Futures Group, said reviving Venezuela’s oil production would face “significant challenges”, but he was more bullish about the near-term prospects than other analysts.

He said the market could conceivably see a couple of hundred thousand more barrels a day coming online in the coming months.

“We’ve not had a free Venezuela, and sometimes the US energy industry has the capability to do a lot more than people give them credit for,” Flynn told Al Jazeera.

Protests about the soaring cost of living in Iran have entered their sixth day after the rial plunged to a record low against the United States dollar in late December.

After a number of deaths as a result of clashes between protesters and security services, the government of President Masoud Pezeshkian appealed for unity and blamed economic pressure on what he said are Tehran’s “enemies”. Despite government promises to enact economic reforms and put more effort into tackling corruption, the protests have continued.

So far, at least seven people have been killed and 44 people have been arrested since shopkeepers in Tehran first shuttered their businesses on Sunday to protest against Iran’s economic crisis.

The tide of protest has continued to rise with economic demonstrations morphing into political protests as unrest has spread across the country.

How significant is the current round of protests, how real are the protesters’ grievances and where might this end? Here are five things you should know:

Worries about the cost of living are very real

Iran is one of the most sanctioned countries in the world. A range of international restrictions means that Tehran is struggling to access international financial markets and frozen foreign assets. The country’s increasing reliance on imports is exacerbating the situation and fuelling inflation.

On Sunday, the Iranian rial dropped to 1.42 million against the US dollar – a 56 percent drop in value in just six months. The plummeting currency has driven inflation with food prices soaring by an average of 72 percent compared with last year.

“If only the government, instead of just focusing on fuel, could bring down the price of other goods,” taxi driver Majid Ebrahimi told Al Jazeera. “The prices of dairy products have gone up six times this year and other goods more than 10 times.”

These protests are large

What began as a single protest about the collapse of the Iranian economy by shopkeepers in Tehran’s Grand Bazaar on Sunday had spread to 17 of Iran’s 31 provinces by New Year’s Eve with students and demonstrators from across Iranian society joining the wave of demonstrations.

Thousands of people have mobilised across the country with security forces responding forcefully in some places.

On Thursday, Iran’s semiofficial Fars news agency reported that three people had died in confrontations between security forces and protesters in Lordegan in southwestern Iran. A further three deaths were reported in Azna and another in Kouhdasht, both in central Iran.

“Some protesters began throwing stones at the city’s administrative buildings, including the provincial governor’s office, the mosque, the Martyrs Foundation, the town hall and banks,” Fars reported of protests in Lordegan, adding that police had responded with tear gas.

It’s hard to know how the government will respond

Tehran’s previous hardline responses to public unrest have been marked by the deaths of protesters. However, so far, despite a number of isolated clashes between protesters and security forces, Pezeshkian’s government has held back from an outright crackdown and appears ready to listen to the “legitimate demands” of protesters.

In an effort to address protesters’ concerns, the government appointed a new governor of the central bank on Wednesday. Abdolnaser Hemmati has pledged to restore economic stability after the rial’s dramatic collapse.

On Tuesday, the Ministry of Higher Education removed campus security managers from the University of Tehran and two other major universities. Local media reported that their removal was due to “a record of misconduct and failure to properly handle recent student protests”.

Speaking at a ceremony in Tehran on Thursday to mark the assassination of senior Islamic Revolutionary Guard Corps commander Qassem Soleimani in a US drone attack five years ago, Pezeshkian also took the opportunity to emphasise his government’s commitment to economic reforms and addressing corruption.

“We are determined to eradicate all forms of rent-seeking, smuggling and bribery,” he told attendees. “Those who benefit from these rents will resist and try to create obstacles, but we will continue on this path.”

“We must all stand together to solve the people’s problems and defend the rights of the oppressed and the underprivileged,” he added.

Protecting people’s livelihoods is a “red line” for his government, he declared.

Mass protests have happened before

Mass protests erupted across Iran in 2022 after the death in custody of 22-year-old Mahsa Amini, who was arrested in September that year for not wearing her hijab correctly.

Demonstrations first broke out after Amini’s funeral in the western city of Saqqez when women ripped off their headscarves in solidarity with the dead woman before they spread across much of the country.

Iran’s brutal response to the unrest involved the arbitrary arrest of tens of thousands of people, the extensive use of tear gas, the firing of live ammunition and, according to human rights organisations, the unlawful deaths of hundreds of people.

A 2024 investigation by United Nations experts into the government’s response found that its actions amounted to “crimes against humanity”, a claim rejected by authorities in Tehran as “false” and “biased”.

The so-called morality police were briefly suspended in December 2022 after the protests before being reinstated the following year. However, their enforcement of dress codes has since become notably more relaxed although many women still fear a resurgence.

These protests could escalate

On Thursday, US President Donald Trump – who in 2018 unilaterally withdrew the US from a nuclear deal with Iran that limited Iran’s nuclear development in return for sanctions relief – commented on the unrest. He posted on his Truth Social platform: “If Iran shots [sic] and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue. We are locked and loaded and ready to go.”

On Thursday, the Israeli Ministry of Foreign Affairs posted on its Farsi social media account pre-revolutionary Iranian images of a lion and a sun with the lion’s paw resting on an hourglass featuring the country’s current flag. The post read: “The rise of Iranian lions and lionesses to fight against darkness”, continuing: “Light triumphs over darkness.”

In June, Israel and the US launched attacks on Iran during a 12-day war between Iran and Israel.

While that conflict ended with what the US claimed was a decisive strike on Iran’s nuclear facilities, speculation that Israel has been readying itself for further strikes has continued.

This week, the US news website Axios reported that Trump and Israeli Prime Minister Benjamin Netanyahu discussed further strikes on Iran as well as potentially targeting Tehran’s Lebanese ally Hezbollah.

Responding on social media, Pezeshkian wrote: “Answer of Islamic Republic of Iran to any cruel aggression will be harsh and discouraging.”

Chinese President Xi Jinping has invited South Korean President Lee Jae Myung to a state visit in Beijing, signalling China’s desire to reinforce relations with South Korea amid regional turbulence.

South Korea’s national security adviser, Wi Sung-lac, told reporters on Friday that Lee will meet Xi in Beijing on Monday before travelling to Shanghai to visit the historic site of South Korea’s provisional government during Japan’s 35-year colonial rule.

Wi said the leaders are expected to discuss “practical cooperation” in areas including supply-chain investment, tourism, and responses to transnational crime, according to Yonhap News Agency.

Lee is also expected to persuade China to take a “constructive” role in achieving “a breakthrough in resolving issues on the Korean Peninsula”, Wi added.

It will be the second meeting between Xi and Lee in just two months, in what analysts have described as an unusually short interval, reflecting Beijing’s interest in bolstering ties before the next meeting between the leaders of South Korea and Japan takes place.

Relations between China and Japan remain at a low point after Japanese Prime Minister Sanae Takaichi suggested in November that a hypothetical Chinese attack on Taiwan could provoke a military response from Tokyo.

On Friday, Wi reaffirmed South Korea’s position on Taiwan, saying the country does “respect the one China policy and act in accordance with that position”. The position acknowledges Beijing’s view that Taiwan remains part of its sovereign territory, while allowing for separate ties with the self-governing island.

Kang Jun-young, a professor of political economics at Hankuk University of Foreign Studies, said “China wants to emphasise South Korea’s importance slightly more than before.

“China appears to have strategically decided that it would be better to have [Lee] visit China before South Korea holds a summit with Japan again,” Kang told the Reuters news agency.

For its part, the Lee administration has stressed its goal of “restoring” ties with China, which remains South Korea’s largest trading partner. At the same time, it has said Lee’s approach of “practical diplomacy” aims to maintain strong ties with Japan and the United States, South Korea’s most important ally.

Under Lee’s predecessor, Yoon Suk Yeol, Seoul leaned closer to Washington and Tokyo and increased criticism of China’s stance on Taiwan.

Lee, in contrast, has said he will not take sides in the dispute between China and Japan, a position he maintains as tensions around the Taiwan Strait rise following Beijing’s recent large-scale military drills near Taiwan.

Security alliances, regional strategy

The two leaders may also address contentious issues such as efforts to modernise the South Korea-US alliance, which some see as a counterbalance to China’s dominance in the Asia Pacific region, according to Shin Beom-chul, a former South Korean vice defence minister and senior research fellow at the Sejong Institute.

Currently, roughly 28,500 US troops are stationed in South Korea to deter threats from North Korea. US officials have signalled plans to make those forces more flexible in responding to other regional challenges, including Taiwan and China’s growing military reach.

“Korea is not simply responding to threats on the peninsula,” General Xavier Brunson, commander of US Forces Korea, said at a forum on December 29. “Korea sits at the crossroads of broader regional dynamics that shape the balance of power across Northeast Asia.”

As China remains North Korea’s principal ally and economic lifeline, experts expect Lee to seek Beijing’s assistance in encouraging dialogue with Pyongyang.

North Korea dismissed Lee’s outreach last year, calling him a “hypocrite” and “confrontational maniac”.

China and North Korea have, in turn, continued closer coordination, with North Korean leader Kim Jong Un appearing alongside Xi at a major military parade in September.

Trade and culture

Lee’s visit is also expected to focus on cooperation in critical minerals, supply chains, and green industries, his office said.

Nearly half of South Korea’s rare earth minerals, which are essential for semiconductor production, come from China. The trading partner accounts for a third of Seoul’s annual chip exports, its largest market.

Last month, officials from both countries agreed to work towards stable rare earth supplies. The visit may also explore partnerships in AI and advanced technologies.

Huawei Technologies plans to launch its Ascend 950 AI chips in South Korea next year, providing an alternative to US-based Nvidia for Korean firms, Huawei’s South Korea CEO, Balian Wang, said at a news conference last month.

Another potential topic is Beijing’s effective ban on K-pop content, which stretches back to 2017 following the deployment of the US’s THAAD missile defence system in South Korea.

SM Entertainment’s chief executive, who heads one of the country’s leading K-pop agencies, will join Lee’s business delegation, according to local media.

New York, United States – Sprawling crowds, a seven-block-long party and chants to “tax the rich” in the world’s wealthiest city marked Zohran Mamdani’s public inauguration as New York City mayor on Thursday, as the metropolis welcomed a new year with a new leadership.

Political inaugurations are usually more stolid affairs. But, as he had in his campaign for the mayoralty, Mamdani flipped the script with his swearing-in events.

In act one, just after midnight, as the ball dropped in Times Square to ring in 2026, Mamdani took the oath of office in a small ceremony on the steps of the landmark New York City Hall subway station.

New York State Attorney General Letitia James administered the oath as Mamdani stood beside his wife, Rama Duwaji, on a staircase inside the transit hub, which has not been used for passenger service since 1945. He used a historic Quran borrowed from the New York Public Library for his swearing in, and a second one that belonged to his grandfather.

The public celebration arrived later, on New Year’s Day, when Mamdani repeated the oath on the steps of City Hall before a crowd that spilled across the surrounding plaza and into the streets. Despite the blistering cold, tens of thousands of supporters streamed into Lower Manhattan to watch the new mayor – along with the city’s comptroller, Mark Levine, and Public Advocate Jumaane Williams – formally assume office.

National political heavyweights, including Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders of Vermont, flanked the city’s new leadership and delivered speeches outlining the progressive movement’s governing ambitions in New York and the national reverberations the race has already sent to lawmakers across the country.

“The most important lesson that can be learned today is that when working people stand, when they don’t let them [the ultra-wealthy] divide us up, there is nothing that we cannot accomplish,” Sanders said before swearing in Mamdani.

While guests and the press gathered inside the City Hall grounds, the city staged a seven-block-long public block party – a new twist on the traditionally ticketed inauguration format. In addition to a closed event capped at a few thousand attendees, anyone willing to RSVP and endure the frigid air and blustering winds after a night of snowfall could try their luck at getting in.

And many did, bundled New Yorkers shuffled through security checkpoints, hoping to glimpse the swearing-in of a 34-year-old democratic socialist now charged with running the largest city in the United States, streaming on large monitors stationed throughout the surrounding area outside City Hall.

Some supporters told Al Jazeera they waited in line for hours, and many never made it through the checkpoints in time. While crowds cheered and horns blasted in solidarity from a distance, a handful of protesters lingered behind police barricades.

The block party in and of itself was symbolic in its effort to reach more New Yorkers who have normally been left out of the political process, Democratic strategist Nomiki Konst told Al Jazeera.

“It was a way of opening up something that hasn’t been accessible for anybody, you know, that wasn’t part of the inner circle of New York politics and media,” Konst told Al Jazeera.

“It was an opportunity to give back to the people who helped him get into office.”

A message of unity and affordability

Mamdani, Williams and Levine spoke about unity for all New Yorkers, delivering remarks in English, Spanish, Hebrew and Greek, and appearing alongside faith leaders of several different faiths, including Islam, Christianity and Judaism.

“We have three swearings-in. One by a leader using a Quran, one by a leader using a Christian Bible, and one using a Hebrew Bible. I am proud to live in a city where this is possible,” Levine said after taking the oath of office.

Mamdani echoed that sentiment.

“We will draw this city closer together. We will replace the frigidity of rugged individualism with the warmth of collectivism. If our campaign demonstrated that the people of New York yearn for solidarity, then let this government foster it,” Mamdani said in his address.

“We will deliver nothing less as we work each day to make this city belong to more of its people than it did the day before.”

But the core message, voiced repeatedly by Mamdani, Levine, Williams, Sanders and Ocasio-Cortez, was the same one that defined the campaign: that the ultra wealthy should pay higher taxes.

“Demanding that the wealthy and large corporations start paying their fair share of taxes is not radical. It is exactly the right thing to do,” Sanders said, as supporters chanted, “Tax the rich.”

One of Mamdani’s core promises was to raise the corporate tax rate in New York City from 7.25 percent to 11.5 percent, equivalent to that of neighbouring New Jersey, as well as a 2 percent increase in taxes on those who make more than $1m a year. Any tax plan would need the approval of the governor to move forward.

“This movement came out of eight-and-a-half million somewheres – taxi cab depots and Amazon warehouses, DSA [Democratic Socialists of America] meetings and curbside domino games. The powers that be had looked away from these places for quite some time – if they’d known about them at all – so they dismissed them as nowhere. But in our city, where every corner of these five boroughs holds power, there is no nowhere and there is no no one,” Mamdani said.

Housing policy has been central to that affordability message for Mamdani. One of his signature campaign promises was to freeze the rent on the city’s rental stabilised apartments, which represent about half of the city’s rental housing stock.

“Those in rent-stabilised homes will no longer dread the latest rent hike – because we will freeze the rent,” Mamdani said in his remarks.

Only hours later, Mamdani introduced a slate of executive orders all aimed at housing.

“On the first day of this new administration, on the day when so many rent payments are due, we will not wait to deliver action,” Mamdani said at a news conference.

He announced three executive orders inside a rent-stabilised building in Brooklyn, including the creation of two new city task forces on housing policy: one to take inventory of city-owned land that could be used for housing, and another to identify ways to spur development.

“The housing crisis is at the centre of our affordability crisis. There are a number of things we are going to be focused on: protecting tenants, going after bad landlords, and building more housing. A huge part of how we get out of our housing crisis is to build more affordable housing across the city,” Leila Bozorg, the Deputy Mayor for Housing and Planning, told Al Jazeera on the steps of City Hall hours before announcing the new policies.

“These are policy decisions we can address if we have the political will and if we put the resources behind it. And that is what he [Mamdani] is committed to doing.”

Legislation signed by President Serdar Berdimuhamedov establishes a licensing scheme overseen by country’s central bank.

Turkmenistan, one of the world’s most isolated nations, has officially legalised mining and exchanging cryptocurrency in a major shift for the country’s tightly controlled, gas-dependent economy.

President Serdar Berdimuhamedov signed the legislation on Thursday, regulating virtual assets under civil law and establishing a licensing scheme for cryptocurrency exchanges overseen by the country’s central bank.

However, digital currencies will still not be recognised as a means of payment, currency or security.

Turkmenistan, a former Soviet country in Central Asia, relies heavily on the export of its vast natural gas reserves to support its economy.

China is the country’s main importer of gas, and Turkmenistan is currently working on a pipeline to supply gas to Afghanistan, Pakistan and India.

Turkmenistan has been taking steps to digitalise government functions as well as its economy.

In April, it adopted a law introducing electronic visas aimed at simplifying entry for foreigners.

After gaining independence in 1991, the tightly governed nation typically placed strict entry requirements on would-be visitors, with many visa applications turned down for unclear reasons.

A mostly desert country of seven million people with the world’s fourth-largest natural gas reserves, Turkmenistan declared itself officially neutral in 1995 under its first president, Saparmurat Niyazov, who spurned both Western and Russian influence.

Until his death in 2006, Niyazov maintained tight control over politics, a policy of isolationism from the outside world, and an economy heavily based on natural gas exports.

Since succeeding his father as president in 2022, Berdymukhamedov has signalled some opening.

In December, he hinted at possible political reforms ahead of a meeting with Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan and Iran’s Masoud Pezeshkian.

“We are carrying out extensive work aimed at transforming our neutral country into a powerful, democratic, and rule-of-law state where citizens live happy lives,” Berdymukhamedov said in the article, without giving further details.

While Turkmenistan’s internet remains tightly regulated and controlled by the government, curbs on social media have been eased, and the government has pledged to open new air transport links and liberalise its visa system.

Still, the country is ranked by the Committee to Protect Journalists as one of the worst in the world for independent media.

Kyrgyzstan, another former Soviet Central Asian republic, has also positioned itself as a regional leader in the sector, launching a national stablecoin in partnership with cryptocurrency exchange Binance.

The move opens key assets to private investment and comes as Petroperu faces mounting losses and debt.

Peru’s government has approved an emergency decree allowing private investment in parts of the state-owned oil company Petroperu, as authorities move to stabilise a firm weighed down by mounting losses and debt.

President Jose Jeri announced the decision shortly before the beginning of the new year.

The measure permits the reorganisation of Petroperu into one or more asset units, opening the door to private participation in key operations. That includes those at the flagship Talara refinery, which recently underwent a $6.5bn upgrade.

Beyond the refinery, Petroperu operates or holds concessions for six crude oil blocks with limited production, alongside a nationwide fuel distribution and marketing network.

In a statement, Peru’s Ministry of Energy and Mines said the decree seeks to “ensure compliance with financial obligations through technical management of its assets, laying the foundation for Petroperu to become a self-sustaining company”.

The ministry said the company’s financial position “is particularly sensitive”, citing accumulated losses of $479m between January and October 2025, as well as debts to suppliers totalling $764m through December.

Those figures come on top of reported losses of $774m in the previous year.

Petroperu’s financial strain has been compounded by debt linked to the Talara refinery modernisation, which ultimately cost double its original estimate and led to the company losing its investment-grade credit rating in 2022.

Since then, the government has repeatedly stepped in to support the firm, providing about $5.3bn in financing between 2022 and 2024.

The company, which is seen as crucial to Peru’s energy security, has also faced environmental scrutiny.

Authorities declared an “environmental emergency” and launched an investigation following an oil spill along a stretch of the country’s northern coastline in 2024, affecting an estimated 47 to 229 hectares (about 116 to 566 acres).

The Petroperu restructuring effort comes amid persistent political instability in Peru. Several presidents have failed to complete full terms in recent years, including Dina Boluarte, who was impeached by Congress in October.

Her successor, Jeri, has struggled to steady leadership at Petroperu, appointing three board chairs in just three months.

The move comes as Peru faces continuing political volatility, economic uncertainty and public pressure for stronger oversight of state institutions.

Thousands of people in Iran have been protesting as a dire economic crisis takes a heavy toll on their daily livelihood.

From a sharp fall in the currency’s value to a steep rise in inflation, Iran’s economy has reached what many describe as a breaking point.

This time, the government has adopted a different approach as protests continue, calling for a dialogue mechanism.

But as the country reels from longstanding sanctions, what does the leadership have to offer?

And what would the consequences be if the protests escalate?

Presenter: James Bays

Guests:

Ali Akbar Dareini – Researcher at the Center for Strategic Studies

Marzie Khalilian – Political analyst and academic researcher

Stephen Zunes – Professor of politics and founding chair of Middle Eastern studies at the University of San Francisco

Iranian president seeks to calm tensions, acknowledging protesters’ ‘legitimate’ grievances over inflation.

At least five people have been killed as demonstrations over the soaring cost of living in Iran spread to more parts of the country.

At least three people were killed and 17 others were injured at protests in the city of Azna in Lorestan province, some 300km (185 miles) southwest of Tehran, Iran’s semiofficial Fars news agency reported on Thursday.

Videos shared online appeared to show objects in the street ablaze and gunfire echoing as people shouted: “Shameless! Shameless!”

Earlier, Fars said two people were killed during protests in the city of Lordegan, about 470km (290 miles) south of the capital Tehran in the Chaharmahal and Bakhtiari province.

“Some protesters began throwing stones at the city’s administrative buildings, including the provincial governor’s office, the mosque, the Martyrs’ Foundation, the town hall and banks,” Fars said, adding that police responded with tear gas.

Online videos showed demonstrators gathered on a street, with the sound of gunfire in the background.

Earlier on Thursday, Iranian state television also reported that a member of security forces was killed overnight during protests in the western city of Kouhdasht.

“A 21-year-old member of the Basij from the city of Kouhdasht was killed last night by rioters while defending public order,” the channel said, quoting Said Pourali, the deputy governor of Lorestan province.

The Basij are a volunteer force linked to the Islamic Revolutionary Guard Corps (IRGC).

The reports come days after shopkeepers began protesting on Sunday over the government’s handling of a currency slide and rapidly rising prices.

The unrest comes at a critical moment for Iran as Western sanctions hammer an economy hit by 40 percent inflation, and after air strikes by Israel and the United States in June targeted the country’s nuclear infrastructure and military leadership.

Reporting from Tehran, Al Jazeera’s Tohid Asadi explained that the government has taken a more cautious approach to this week’s protests than it did to previous demonstrations.

“The government says it’s working hard to find a solution, to deal with the economic hardships that people are feeling,” Asadi said.

Iran last saw mass demonstrations in 2022 and 2023 after the death of Mahsa Amini, a 22-year-old woman who died in police custody after being arrested for allegedly violating the country’s strict dress code for women.

The latest protests began peacefully in Tehran and spread after students from at least 10 universities joined in on Tuesday.

Iranian President Masoud Pezeshkian has sought to calm tensions, acknowledging protesters’ “legitimate demands” and calling on the government to take action to improve the economic situation.

“From an Islamic perspective … if we do not resolve the issue of people’s livelihoods, we will end up in hell,” Pezeshkian said at an event broadcast on state television.

Government spokesperson Fatemeh Mohajerani said on Thursday the authorities would hold a direct dialogue with representatives of trade unions and merchants, without providing details.

Still, the authorities have promised to take a “firm” stance and warned against exploiting the situation to sow chaos.

“Any attempt to turn economic protests into a tool of insecurity, destruction of public property, or implementation of externally designed scenarios will inevitably be met with a legal, proportionate and decisive response,” Iran’s prosecutor general said on Wednesday.

Meanwhile, the Tasnim news agency on Wednesday evening reported the arrests of seven people it described as being affiliated with “groups hostile to the Islamic Republic based in the United States and Europe”.

Iran is in the middle of an extended weekend, with the authorities declaring Wednesday a bank holiday at the last minute, citing the need to save energy due to cold weather.

Move comes nearly two decades after the Balkan country entered the EU as hope for stability clashes with fear of rising prices.

Bulgaria has officially adopted the euro, becoming the 21st country to join the single currency nearly two decades after entering the European Union, a move that has led to both celebration and anxiety.

At midnight on Wednesday (22:00 GMT), the Balkan country abandoned the lev, its national currency since the late 19th century.

Images of Bulgarian euro coins lit up the central bank’s headquarters in Sofia as crowds gathered in freezing temperatures to mark the new year.

“I warmly welcome Bulgaria to the euro family,” said Christine Lagarde, the president of the European Central Bank.

Some residents welcomed the change with optimism. “Great! It works!” said Dimitar, 43, speaking to The Associated Press after withdrawing 100 euros from a cash machine shortly after midnight.

Successive Bulgarian governments have backed euro adoption, arguing it would strengthen the country’s fragile economy, anchor it more firmly within Western institutions and shield it from what officials describe as Russian influence. Bulgaria, with a population of about 6.4 million, remains the poorest member of the EU.

Divided public

Yet public opinion has long remained split. Many Bulgarians fear the euro will drive up prices while wages stagnate, worsening living standards in a country already struggling with political instability.

In a televised address before midnight, President Rumen Radev described the euro as the “final step” in Bulgaria’s integration into the EU.

However, he criticised the absence of a public referendum on the decision.

“This refusal was one of the dramatic symptoms of the deep divide between the political class and the people, confirmed by mass demonstrations across the country,” Radev said.

Bulgaria recently plunged into further uncertainty after anticorruption protests toppled a conservative-led government in December, pushing the country towards its eighth election in five years.

“People are afraid that prices will rise, while salaries will remain the same,” a woman in her 40s told the AFP news agency in Sofia.

At city markets, vendors listed prices in both levs and euros. Not everyone was worried.

“The whole of Europe has managed with the euro, we’ll manage too,” retiree Vlad said.

The United States Department of the Treasury has issued a new round of sanctions aimed at isolating Venezuela’s oil industry, as part of President Donald Trump’s pressure campaign against the South American country.

The sanctions announced on Wednesday target four companies and their associated oil tankers, which are allegedly involved in transporting Venezuelan oil.

Trump has claimed that Venezuelan leader Nicolas Maduro leads a so-called “narco-terrorist” government that seeks to destabilise the US, a charge repeated in the latest sanctions announcements.

“Maduro’s regime increasingly depends on a shadow fleet of worldwide vessels to facilitate sanctionable activity, including sanctions evasion, and to generate revenue for its destabilizing operations,” the Treasury said on Wednesday.

Petroleum is Venezuela’s primary export, but the Trump administration has sought to cut the country off from its international markets.

Wednesday’s notice accuses four tankers – the Nord Star, the Rosalind, the Valiant and the Della – of helping Venezuela’s oil sector to circumvent existing sanctions, thereby providing the “financial resources that fuel Maduro’s illegitimate narco-terrorist regime”.

“President Trump has been clear: We will not allow the illegitimate Maduro regime to profit from exporting oil while it floods the United States with deadly drugs,” said Treasury Secretary Scott Bessent.

“The Treasury Department will continue to implement President Trump’s campaign of pressure on Maduro’s regime.”

Claims on Venezuelan oil

The sanctions come a day after Washington imposed sanctions on a separate Venezuelan company it says assembled drones designed by Iran.

In recent months, the Trump administration has cited several motives for ratcheting up pressure against Venezuela, ranging from immigration to Maduro’s contested election in 2024.

Trump, for instance, has framed the pressure campaign as a means of stemming the trade of illegal drugs, despite Venezuela exporting virtually none of the administration’s main target, fentanyl.

Critics have also accused Washington of seeking to topple Maduro’s government to take control of the country’s vast oil reserves.

Trump officials have fuelled those suspicions with remarks seeming to assert ownership over Venezuela’s oil.

On December 17, a day after Trump announced a “total and complete blockade” of sanctioned oil tankers entering and leaving Venezuela, his top adviser, Stephen Miller, claimed that the US “created the oil industry in Venezuela”.

He suggested that the oil was stolen from the US when Venezuela nationalised its petroleum industry, starting in 1976.

That process accelerated after the 1998 election of socialist President Hugo Chavez, who reasserted state control over Venezuela’s oil sector, ultimately leading to the seizure of foreign assets in 2007.

That “tyrannical expropriation” scheme, Miller alleged, “was the largest recorded theft of American wealth and property”.

Still, one major US oil company, Chevron, continues to operate in the country.

Trump has echoed Miller’s claims, writing online that the US “will not allow a Hostile Regime to take our Oil, Land, or any other Assets”.

He added that all of those assets “must be returned to the United States, IMMEDIATELY”.

Military build-up in the Caribbean

In recent months, the Trump administration has tightened its focus on Venezuela’s oil industry, taking a series of military actions against tankers.

On December 10, the administration seized its first tanker, the Skipper, followed by a second seizure 10 days later.

The US military has reportedly been pursuing a third tanker as it crosses the Atlantic Ocean.

The attacks on the oil tankers come several months after the US began surging aircraft, warships and other military assets to the Caribbean region along Venezuela’s coast.

Since September 2, the US military has conducted dozens of bombing campaigns against alleged drug-smuggling boats in international waters in the Caribbean Sea and eastern Pacific, in what rights groups call extrajudicial killings.

More than 100 people have been killed, and the administration has offered scant legal justification for the attacks.

On Monday, Trump told reporters that the US had struck a “dock area” in Venezuela he claimed was used to load the alleged drug boats.

The dock bombing is believed to be the first of its kind on Venezuelan soil, though Trump has long threatened to begin attacking land-based targets.

While the administration has not officially revealed which agency was behind the dock strike, US media has widely reported it was conducted by the Central Intelligence Agency (CIA).

Settlement comes after US Federal Trade Commission accused the entertainment giant of unlawfully collecting children’s data.

Disney has agreed to pay $10m to settle allegations that it breached child privacy laws in the United States, authorities have said.

A federal court approved the settlement to resolve allegations brought by the US Federal Trade Commission, the Department of Justice said on Tuesday.

The order also requires Disney to operate its YouTube channel in accordance with data-protection rules and establish a programme to ensure future compliance.

Disney had agreed to settle the claims brought by the US antitrust watchdog in September.

The civil case stems from allegations that Disney collected children’s personal data without parental consent via its videos on YouTube.

Antitrust officials alleged that Disney had wrongly designated more than 300 YouTube videos, including content from The Incredibles, Toy Story, Frozen, and Mickey Mouse, as not being aimed at children.

YouTube requires content creators to designate videos as “Made for Kids” or “Not Made for Kids” to comply with the Children’s Online Privacy Protection Rule.

Under the rule, companies in the US are prohibited from collecting data from children below 13 without parental notification.

Other major companies that have paid settlements under the rule, which has been amended several times since its enactment in 2000, include Google and Microsoft.

Disney did not immediately respond to a request for comment.

“The Justice Department is firmly devoted to ensuring parents have a say in how their children’s information is collected and used,” Assistant Attorney General Brett A Shumate said in a statement.

“The Department will take swift action to root out any unlawful infringement on parents’ rights to protect their children’s privacy.”

Disney, which has its headquarters in Burbank, California, is one of the world’s largest entertainment companies, with revenue for the fiscal year 2025 reaching $94.4bn.

Tehran, Iran – Iran’s currency has been registering new lows amid ongoing economic turmoil that is also reflected in a planned budget for next year that effectively shrinks public spending.

Each United States dollar was priced at about 1.36 million rials in the open market on Wednesday in Tehran, its highest rate ever, before the Iranian currency slightly regained ground on Thursday.

The embattled national currency has been rapidly declining over recent weeks as the US and its Western allies pile on their sanctions and diplomatic pressure, and the threat of another war with Israel lingers.

President Masoud Pezeshkian this week sent his administration’s finalised proposed budget to the hardline-dominated parliament for the upcoming Iranian calendar year, which starts in late March. The budget will then have to be greenlit by the 12-member Guardian Council before being ratified into law in the coming weeks.

The presented budget nominally grew by just over 5 percent compared with last year, but inflation currently stands at about 50 percent – indicating that the government envisions lower spending while managing a so-called “resistance economy” as it faces a massive budget crunch yet again.

But minimum wages are to be raised far below the inflation rate, too, at only 20 percent, meaning that Iranians are once more guaranteed to have far less spending power next year as the embattled national currency sinks.

At the same time, the budget says the government sees taxes rising by a massive 62 percent next year, as authorities try to gradually decrease dependence on oil revenues amid US efforts to drive down Iranian exports, which are carried by a shadow fleet of ships mostly to China.

At the current exchange rate, the whole budget is worth about $106bn, several times lower than the projected 2026 budgets of regional players like Turkiye, Saudi Arabia and Israel.

Iran’s rent-distributing multi-tier exchange rate system is still at play, with the government proposing allocating a rate for customs duties, import valuation and budget accounting tables, and another closer to the open market rate used for oil revenue realisation.

An earlier subsidised exchange rate, which was far lower than the open market rate, has now been abandoned. Any excess cash resulting from this is expected to be doled out to low-income Iranians in the form of electronic coupons that can be used to buy essential items like food.

For the first time, the budget is drafted in new rials as four zeros are expected to be removed from the ailing national currency by the time the budget is operational for next year.

After years of back and forth, the parliament in October approved the government plan to lop off four zeros. The move is only cosmetic and will not help with the runaway inflation, but proponents argued it was necessary after years of currency devaluation.

Budget spells grim outlook

Several major factors have already been raising alarm over how bad the economic situation could become next year.

Iranians online reacted poorly to the fact that the government predicts wages will be far outpaced by inflation and tax collection. Others were concerned that eliminating the subsidised rate for essential goods could cause another price shock in the short term.

Many shared a video of Pezeshkian from last year running for president, when he said during a televised interview that the stark disparity between wage increases and inflation is a “grave injustice” being done to the Iranian people.

“Unfortunately, so long as we do not resolve the structural issues, we are making labourers and government workers poorer by the day while those with money get bigger and bigger,” Pezeshkian said at the time.

“This inflation is an additional tax on the poor and the disenfranchised.”

But successive governments have failed to eliminate budget deficits or rein in banks teetering on the brink of insolvency, therefore relying on the central bank to print more money to run the country and, in turn, exacerbate inflation.

Earlier in December, the government proceeded with increasing the price cap of petroleum despite repeated assurances it had no plans to that effect this year. The move has already led to increased transport costs, which will end up taking inflation higher.

There are now four price tiers for petroleum, with the cheapest and lowest quality that is available to most Iranians costing up to 50,000 rials per litre (about $1.19) and higher quality imported fuel delivered this week at 800,000 rials per litre ($19).

Hamid Pourmohammadi, who heads the Plan and Budget Organization of Iran, insisted that the government has devised a 20-point plan to be unveiled soon that will reduce pressure on the livelihoods of Iran’s 90 million population.

“The government is trying to adopt an active approach to address the economic challenges of the people, businesses and economists, so there is no perception of complacency in these economic conditions,” he said.

Ramallah, occupied West Bank – The Palestinian economy is undergoing a severe downturn, driven by Israel’s continued assault on Gaza, intensified restrictions on movement and trade in the occupied West Bank, and a sharp decline in both domestic and external financial resources.

As the Palestinian government struggles to manage an escalating fiscal crisis, official data and expert assessments warn that the economy is approaching a critical threshold – one that threatens the continuity of state institutions and their ability to meet even basic obligations.

A joint report by the Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA), published in the Palestinian Economic Monitor for 2025, found that the economy remained mired in deep recession throughout the year.

According to the report, gross domestic product (GDP) in Gaza contracted by 84 percent in 2025 compared with 2023, while GDP in the occupied West Bank declined by 13 percent over the period. Overall GDP levels remain far below their pre-war baseline, underscoring the fragility of any potential recovery and the economy’s inability to regain productive capacity under current conditions.

The report documented a near-total collapse of economic activity in Gaza, alongside sharp contractions across most sectors in the West Bank, despite a modest improvement compared with 2024. It also recorded a decline in trade volumes to and from Palestine compared with 2023, while unemployment in Gaza exceeded 77 percent during 2025.

Withheld revenues and mounting debt

Palestinian Economy Minister Mohammed al-Amour said Israeli authorities are withholding approximately $4.5bn in Palestinian clearance revenues, describing the move as a form of “collective punishment” that has severely undermined the Palestinian Authority’s (PA’s) ability to function.

“The total accumulated public debt reached $14.6bn by the end of November 2025, representing 106 percent of the 2024 gross domestic product,” al-Amour told Al Jazeera.

The minister said the debt includes $4.5bn owed to the International Monetary Fund, $3.4bn to the Palestinian banking sector, $2.5bn in salary arrears to public employees, $1.6bn owed to the private sector, $1.4bn in external debt, and $1.2bn in other financial obligations.

“These pressures have had a direct impact on the overall performance of the public budget,” al-Amour said, contributing to a widening deficit and sharply reduced capacity to cover operational spending and essential commitments.

All of that has led al-Amour to conclude that the Palestinian economy is undergoing “its most difficult period” since the establishment of the PA in 1994.

Official estimates show GDP contracted by 29 percent in the second quarter of 2025, compared with 2023, while GDP per capita fell by 32 percent over the period. These figures align with a recent report by the United Nations Conference on Trade and Development (UNCTAD), which concluded that the Palestinian economy has regressed to levels last seen 22 years ago.

In response, al-Amour said the government was implementing an “urgent package of measures”.

“The government is rolling out a series of actions that include strengthening the social protection system, supporting citizens’ resilience in Area C [of the West Bank], and backing small and medium-sized enterprises and productive sectors, particularly industry and agriculture,” al-Amour said.

Official data show a sharp drop across nearly all economic activities. Construction contracted by 41 percent, while both industry and agriculture declined by 29 percent each. Wholesale and retail trade fell by 24 percent.

The tourism sector has been among the hardest hit. Following the start of Israel’s genocidal war on Gaza in October 2023, the Ministry of Tourism reported daily losses exceeding $2m, as inbound tourism nearly collapsed. By the end of 2024, cumulative losses were estimated at approximately $1bn.

The Palestinian Economic Policy Research Institute (MAS), citing PCBS data, reported an 84.2 percent drop in hotel occupancy in the West Bank during the first half of 2024 compared with the same period a year earlier. Losses in accommodation and food services alone amounted to roughly $326m.

Despite the downturn, al-Amour said the Ministry of Economy is focusing on sustaining the private sector, substituting Israeli imports across seven key sectors, developing the digital and green economies, and improving the business environment. He noted that about 2,500 new companies continue to be registered each year.

Tourism collapsing

Samir Hazbun, a lecturer at al-Quds University and board member of the Palestinian Federation of Chambers of Commerce and Industry, said repeated crises have hollowed out the economy.

“Over the past five years, all economic sectors have entered successive crises, starting with the COVID-19 pandemic and followed by the war on Gaza,” Hazbun said. “Tourism, one of the most important sectors, has been especially affected, exhausting the local economy and weakening its ability to recover.”

Hazbun said preliminary estimates indicate tourism has suffered direct losses exceeding $1bn, alongside extensive indirect losses resulting from the paralysis of hotels, souvenir shops, travel agencies, tour guides and street vendors.

He added that hotel investments alone are estimated at $550m, with no financial returns for owners, forcing many workers out of the sector due to the absence of job security and safety nets.

Economic expert Haitham Daraghmeh described Palestinian debt as “accumulated debt that increases monthly”, owed to banks, suppliers, contractors, and the telecommunications and health sectors.

“The withholding of clearance revenues is no longer a temporary financial crisis; it has become a factor of complete economic paralysis,” he said.

With external aid frozen and domestic revenues at historic lows, Daraghmeh warned that the government was “no longer able to cover salaries or operational costs”.

“The government is operating like an ATM, with no real capacity for investment or economic stimulus,” Daraghmeh added.

Economic warnings

Daraghmeh said World Bank reports warn that continued failure to pay salaries and meet obligations could trigger comprehensive economic collapse. While some countries, including France and Saudi Arabia, have pledged support, he said none of that assistance has materialised.

He outlined three possible scenarios; the most likely is a continued gradual decline, driven by ongoing revenue withholding and shrinking resources. The second involves international intervention to prevent total collapse, particularly at a decisive political moment. The third scenario could see a conditional breakthrough, tied to European demands for financial reform, anticorruption measures, curriculum changes and elections.

Taken together, the data and expert assessments suggest the Palestinian economy is approaching a dangerous tipping point. Analysts warn that without an end to revenue withholding, renewed international financial support, and a shift in the political context, the economy risks sliding from prolonged crisis into outright collapse.

The question facing Palestinian officials and economists alike is how long the system can endure under siege-like conditions – and whether political and economic shifts will arrive in time to halt what many now describe as a slow and deliberate economic unravelling.