economic

A fragile ceasefire may have paused the US-Israeli war on Iran, but the economic cost is crippling the daily lives of Iranians. The US is blockading Iranian ports, while the price of goods skyrockets and businesses struggle to keep employees.

As Iran stares down the economic consequences of a prolonged blockade of the Strait of Hormuz, attention is shifting north.

With Gulf shipping lanes disrupted and oil exports constrained, Tehran may seek to depend less on the Gulf and more on a patchwork of railways, Caspian ports and sanctions-era trade networks linking it to Russia.

The importance of that relationship was underscored this week when Iranian Foreign Minister Abbas Araghchi travelled to St Petersburg for talks with Russia’s President Vladimir Putin, praising Moscow’s “firm and unshaken” support as the two sides discussed the war, sanctions and the future of the Strait of Hormuz.

But could Moscow really offer a lifeline for Iran’s beleaguered, war-torn economy, and would it even want to? We spoke to experts to find out.

Increasing but modest bilateral trade

Economic relations between Iran and Russia deepened after the US withdrew from a 2015 nuclear deal with Iran and other nations in 2018 and reimposed sweeping sanctions on Tehran.

Russia’s full-scale invasion of Ukraine in 2022 served to accelerate that trend as both countries found themselves increasingly cut off from the Western financial system. They turned to sanctions-evasion networks, alternative payment systems and non-Western trade corridors to keep goods, energy and money flowing.

Current trade is dominated by agricultural products – especially wheat, barley and corn – alongside machinery, metals, timber, fertilisers and industrial inputs. Tehran has also supplied Russia with low-cost Shahed drones, which Russia updated and has been using in its war on Ukraine.

“Trade turnover reached $4.8bn last year [2024], but we believe that the potential for our mutual trade is much greater,” Russian Energy Minister Sergey Tsivilyov told an intergovernmental commission on trade and economic cooperation between Moscow and Tehran in 2025.

Bilateral trade is reported to have increased by 16 percent during that period, driven largely by Russian exports of grain, metals, machinery and industrial goods.

But experts say that despite this increase, the overall trade relationship remains relatively modest compared with Iran’s trade with China or the Gulf countries.

Trade between the two is “not substantial, because both countries are producing almost similar products and the industries are similar”, Mahdi Ghodsi, an economist at the Vienna Institute for International Economic Studies, told Al Jazeera.

Alternatives to Hormuz

The backbone of Russia-Iran trade is the International North-South Transport Corridor (INSTC), a network of shipping lanes, railways, and roads linking Russia to Iran and onward to Asia, bypassing Western-controlled maritime routes.

Goods move from southern Russian ports, across the Caspian Sea to northern Iranian ports, including Bandar Anzali, before continuing by rail or truck.

The route has become increasingly important for Russian grain, machinery and industrial exports to Iran.

This route can serve as a “viable but partial lifeline”, Naeem Aslam, chief market analyst at London-based Think Markets, told Al Jazeera, adding that Russian ports in Astrakhan, on the Volga River delta near the Caspian Sea, and Makhachkala, on the Caspian Sea, are already “primed for a surge in grain, metals, timber and refined products”.

A western branch also runs through Azerbaijan, though a key missing rail link between Rasht and Astara in northern Iran remains unfinished.

In 2023, Moscow agreed to help finance the line, with Russia’s president calling the agreement a “great event” that “will help to significantly diversify global traffic flows”.

Easier in theory than in practice

Analysts say that, although these routes may provide a temporary solution, the Strait of Hormuz offers a scale and efficiency that rail and land corridors cannot easily replicate.

Although maritime trade has been highly volatile in recent weeks, “from a historical perspective it is simply the quickest and the most cost-effective way of transporting anything”, Adam Grimshaw, an economic historian at the University of Helsinki, told Al Jazeera.

“Roughly 90 percent of Iran’s international trade is maritime trade that goes through the Gulf, which can’t be quickly or immediately replaced through land access to Iran or through air transport to circumvent the American blockade”, Nader Hashemi, an associate professor at Georgetown University, told Al Jazeera.

Ghodsi said Russia might be able to offer a “lifeline” in the short term, as it did when it exported grain during Iran’s droughts, but in the long run, it simply “cannot substitute” the vast amounts of maritime trade.

Re-routing trade routes via land “takes time”, pushing up prices for consumers and creating more food waste as perishables rot en route.

Does Moscow want to help Iran?

Most analysts say throwing an economic lifeline to Iran is not in Russia’s interests.

“They’ve got their own economic problems,” John Lough, head of foreign policy at the New Eurasian Strategies Centre, told Al Jazeera, pointing to signs of stagnation inside Russia, pressure on reserves and growing frustration over the prolonged war in Ukraine.

While Moscow could offer symbolic support or limited humanitarian assistance, “now is not a good time” to invest in Iran, he said, referring to the US-Israel war on the country.

Replacing maritime trade with overland routes would be extremely difficult, despite years of discussion about alternative corridors linking the two nations, he said.

It also won’t necessarily help Iran’s economy, which needs all the export revenue it can get, experts say.

“Much of Iran’s economy revolves around the sale of oil, and with that blocked or prevented by the American blockade, Russia really can’t help in that regard”, Hashemi said.

Others are more optimistic, however.

“Propping [up] Iran locks in higher global oil prices that buoy Russia’s war economy, cements INSTC dominance for Asian trade, and keeps a key anti-Western ally alive – no downside for Moscow in a fragmented Gulf,” Aslaam said.

Africa has shown itself in the past week again as a continent of dramatic contrasts, in which moral leadership, political turmoil, and financial aspiration come into collision in a manner that would not only chart its own future but also that of the world. The continent is going through a time that is both precarious and radical, as the potent moral rhetoric of a papal visit gives way to an ever-worsening political persecution and systemic economic disparities.

A Moral Voice in a Fractured Continent

The visit of Pope Leo in some parts of Africa, such as Angola and Cameroon, has been one of the most intriguing this week. His message attracted crowds of more than 10,0000 people, and it was not only religious but also very political, declaring Africa a beautiful but wounded continent and demanding unity, justice, and an end to violence.

It is not only the size of the meetings but also the content of the message that is important. The Pope was outspoken in an attack on corruption, inequality, and exploitative governance systems—the problems that are at the core of most of the struggles in Africa today. His words about people being more important than corporate interests are well-received in a continent where natural resource wealth has not always translated into widespread prosperity.

This visit was, in a sense, a symbol of a greater fact: Africa is not merely economically or politically challenged; it is morally and structurally challenged. The unity cry in Angola, the nation that is yet to overcome the adverse effects of decades of civil war, is a symptom of the bigger continental necessity to mend the wounds of the past and deal with the inequalities of the present.

Political Tensions and Disappearance of Space of Dissent

As the moral pleas of unity reverberated in stadiums, political realities on the ground painted an even more disturbing scenario. The South African arrest of activist Kemi Seba is part of an increasing trend in some parts of Africa, where there is an increased crackdown on dissenting voices.

Seba, the anti-colonial and anti-Western rhetoricist and critic of Western influence, now risks extradition to Benin on charges of inciting rebellion. His detention highlights a broader conflict: the fight between state power and political activism in an area where the democratic institutions are not yet balanced.

This is not a one-time event. Governments all over the continent are striking a fine balance between ensuring stability and political expression. In other instances, this equilibrium is leaning towards control over being open, and this leaves one worrying about the future of democratic governance.

The consequences are not confined nationally. The political situation in Africa is a topic of keen interest to the rest of the world, not just due to its size and population but because it offers one of the final avenues of democratic growth in the 21st century. Political space is reduced here, causing ripples way beyond the continent.

Structural Gaps in Economic Promise

Africa is still a puzzle economically. On paper, the figures are encouraging. Recently, South Africa obtained the promise of billions of investments, which indicates a great interest of other countries in the areas of green energy, infrastructure, and digital development. But the facts speak otherwise. Of these promised investments, only around 42 percent have been translated into real economic activity—much less than world averages. This delivery gap is indicative of an ongoing problem: it is one thing to attract investment and another to implement it.

Simultaneously, the recent climate financing agreement of South Africa with Germany that provides hundreds of millions of euros of loans and green energy assistance reminds us about the increased role of the continent in the global climate plan. Africa is also being increasingly viewed not only as a beneficiary of aid but also as a prime actor in the shift to sustainable energy.

However, structural problems are quite rooted. The effectiveness of economic initiatives is still hampered by policy inconsistency, poor infrastructure, and governance issues. Even the most ambitious plans of investment have a chance of failing without these underlying problems being addressed.

The Overlooked Crisis: Environment and Illicit Economies

The other trend of importance this week has been the further increase in wildlife trafficking in Nigeria, even though the legislation has been taking measures to reduce it. A lack of complete legislation on wildlife protection has allowed the illegal trade to continue, with several seizures of endangered species over the past few months.

The problem is indicative of a larger problem: that of a nexus between environmental degradation and ineffective enforcement. Africa has one of the most biodiverse regions in the world, but it is rapidly being threatened by illegal trade, climate change, and the exploitation of resources.

The inability to adequately deal with such problems not only damages the ecosystems but also weakens the governance and the stability of the economy. In places where there is poor regulation, illegal economies flourish and, as a result, establish parallel economies that undermine state power and promote corruption.

Africa: Moment between Opportunity and Uncertainty

Collectively, what happened this last week shows a continent at a crossroads. On the one hand, there is an increasing international appreciation of the significance of Africa, be it in climate policy, economic investment, or geopolitical strategy. Conversely, internal threats persist to restrict its ability to exploit these opportunities to their full potential.

The message of unity and justice that the Pope is calling for is the spirit of this moment. Africa is not poor in resources, talent, and potential. The greater challenge it confronts is alignment itself, leadership and citizens, economic growth and social equity, and global engagement and local realities.

Conclusion: A Turning Point, Not a Passing Moment

The events of this week do not represent one-off headlines, but they are evidence of larger trends that are defining the future of Africa. The continent is not just responding to the global events—it is steadily becoming one of the main arenas where the global issues are acted out.

The doubt now arises whether Africa will be able to utilize this moment of attention to become a changed continent. Will investment be translated into development? Will politics become more open? Do ethical demands of cohesion result in practical change?

The responses are unclear. Nevertheless, there is one thing that is clear: Africa is never at the periphery of world affairs any longer. It is here in the center, and what occurs here during times of this kind will make the continent and indeed the world.

VANCOUVER — Canadian Prime Minister Mark Carney said in a video address released Sunday that Canada’s strong economic ties to the United States were once a strength but are now a weakness that must be corrected.

In the 10-minute address, Carney spoke about his government’s efforts to strengthen the Canadian economy by attracting new investments and signing trade deals with other countries.

“The world is more dangerous and divided,” Carney said. “The U.S. has fundamentally changed its approach to trade, raising its tariffs to levels last seen during the Great Depression.

“Many of our former strengths, based on our close ties to America, have become weaknesses. Weaknesses that we must correct.”

Carney said tariffs imposed by President Trump have affected workers in the auto and steel industries. He added that businesses are holding back investments “restrained by the pall of uncertainty that’s hanging over all of us.”

Many Canadians have also been angered by Trump’s comments suggesting Canada become the 51st state.

Carney said he plans to give Canadians regular updates on his government’s efforts to diversify away from the U.S.

“Security can’t be achieved by ignoring the obvious or downplaying the very real threats that we Canadians face,” he said. “I promise you I will never sugarcoat our challenges.”

It’s not the first time Carney, who served as a central bank governor, first at the Bank of Canada and later with the Bank of England, has spoken about a shift in world power.

During a speech in January at the World Economic Forum in Davos, Switzerland, he received widespread praise for condemning economic coercion by great powers against small countries.

His remarks brought a rebuke from Trump.

“Canada lives because of the United States,” Trump said after the speech. “Remember that, Mark, the next time you make your statements.”

There was no immediate White House reaction Sunday to the address.

Carney’s comments came days after securing a majority government following special election wins and as the opposition Conservatives push him to deliver a U.S. trade deal, which was among his promises in last year’s election.

A review of the current version of the North American Free Trade Agreement among Canada, the U.S. and Mexico is scheduled for July.

In his address, Carney said he wants to attract new investments into Canada, double the size of clean energy capacity and reduce trade barriers within the country. He also emphasized Canada’s increased defense spending, reduction in taxes and efforts to make housing more affordable.

“We have to take care of ourselves because we can’t rely on one foreign partner,” he said. “We can’t control the disruption coming from our neighbors. We can’t control our future on the hope it will suddenly stop.

“We can control what happens here. We can build a stronger country that can withstand disruptions from aboard.”

Carney said simply hoping the “United States will return to normal” is not a feasible strategy.

“Hope isn’t a plan and nostalgia is not a strategy,” he said.

Carney said Canada has “been a great neighbor,” standing with the U.S. in conflicts including Afghanistan, plus two World Wars.

“The U.S. has changed and we must respond,” he said. “It’s about taking back control of our security, our borders and our future.”

Morris writes for the Associated Press.

President Lee Jae Myung held summit talks with Indian Prime Minister Narendra Modi on Monday, focusing on deepening economic ties and strengthening the countries’ strategic partnership amid the war in the Middle East.

The two leaders were earlier expected to discuss ways to bolster cooperation in artificial intelligence, defense, and the shipping and shipbuilding industries, while expanding the scope of bilateral manufacturing cooperation beyond electronics and vehicles.

They also likely discussed enhancing coordination on global supply chains and energy security as their countries, both heavily reliant on imported energy, grapple with the fallout from the war between the United States and Iran.

In an interview with The Times of India published earlier in the day, Lee stressed the need for South Korea and India to work together to ensure safe passage through the Strait of Hormuz, a critical route for oil and natural gas, and make joint efforts to stabilize global supply chains.

It marked their third in-person meeting since Lee took office in June 2025.

Ahead of the summit, Lee paid tribute at Raj Ghat, a memorial dedicated to Mahatma Gandhi, and planted a commemorative tree with Modi at Hyderabad House.

Copyright (c) Yonhap News Agency prohibits its content from being redistributed or reprinted without consent, and forbids the content from being learned and used by artificial intelligence systems.

The world is reckoning with the biggest oil supply disruption in history, one that has sent energy prices soaring, rattled stock markets and exposed the deep vulnerabilities of economies still hooked on fossil fuels. While millions face higher fuel and energy bills, top oil and gas companies are reportedly profiting about $30m per hour since the war began.

This week on UpFront, Redi Tlhabi speaks with renowned economist Mariana Mazzucato about what a genuine green industrial strategy looks like, why the World Bank has fallen short, and how her concept of the “common good economy” offers a new compass for governments navigating crises.

He was asked if now is a good time to open an ISA or not

Martin Lewis has offered some advice on how you could organise your savings. He explained the practical tip amid the current uncertainty surrounding the economic impact of the Iran conflict.

The major war has already triggered a surge in oil prices, with fears of long-term consequences for food production and global economic growth.

Mr Lewis was questioned on his BBC podcast about whether now is an opportune moment to open a stocks and shares ISA, given that markets are struggling. When share prices fall, it can present a prime opportunity to invest, as your funds could increase in value when the market bounces back. But if prices decline further, the worth of your holdings could also drop. In response, Mr Lewis outlined the general principle to bear in mind.

He said: “If you’re talking about investing for a long term money that you don’t need for five years and you’re going to do that in a nice spread of investments, like a global tracker fund or an S&P tracker or FTSE tracker, then you just have to accept that you will never know when the perfect time to put money in is.”

£1,000 savings tactic

Nevertheless, he did reveal one strategy you could use to reduce the risk posed by market volatility. Mr Lewis said: “Let’s just imagine you’re putting £10,000 in a stocks and shares ISA, and you’re putting it away for a long time.

“You could put £10,000 in now but you could arrange with the provider that it sits in its cash part. You can hold it in cash, within a stocks and shares ISA, for the moment.

“You could say I’ve got £10,000, over the next 10 months, I’d like you to buy £1,000 a month of that tracker fund that I’m putting my investment into. It’s called pound-cost averaging.

“Because you’re drip feeding the money in, that helps smooth out the short-term volatility of buying at the right moment. So if you’re worried about that volatility, you might want to adopt that tactic.”

Mr Lewis continued in saying that in reality nobody can predict the optimal time to invest. He said: “They are unknowable in the short term, but in a broad spread of investment over the long term, on the balance of probabilities, investing will outperform saving.

“So don’t let the volatility put you off, but you might want to spread the time that you’re putting the money in.”

Major changes to ISA allowances

Savers may also want to note that major changes to ISA allowances are on the horizon. Currently, you can deposit up to £20,000 each tax year, which can be divided as you wish between cash ISAs and stocks and shares ISAs.

From April 2027, you will only be permitted to save up to £12,000 as you choose. The remaining £8,000 will only be available for deposits into investment-based accounts.

Savers aged 65 and over will be exempt from the new regulations, retaining the existing £20,000 allowance. ISAs are entirely tax-free, with no tax liability on any interest earnings or investment gains within these accounts.

WASHINGTON — If the U.S. and Iran aren’t able to soon come to a deal to end the war or extend the ceasefire that expires next week, the Trump administration is setting the stage to shift its war campaign toward a more economic-focused effort aimed at choking Tehran into submission rather than relying on bombs alone.

Treasury Secretary Scott Bessent told reporters at a White House briefing Wednesday that the U.S. plans to ramp up economic pain on Iran, and said the new moves will be the “financial equivalent” of a bombing campaign.

The threat of secondary economic sanctions on countries doing business with people, firms, and ships under Iranian control — including allies like the United Arab Emirates and competitors like China — represents an escalation of sanctions that the U.S. is already employing.

Bessent said the administration has “told companies, we have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure. And the Iranians should know that this is going to be the financial equivalent of what we saw in the kinetic activities.”

Treasury Department warns China, Hong Kong, the UAE and Oman

The warning comes the day after the Treasury Department sent a letter to financial institutions in China, Hong Kong, the UAE, and Oman, threatening to levy secondary sanctions for doing business with Iran, and accusing those countries of allowing Iranian illicit activities to flow through their financial institutions.

It’s part of an economic playbook that President Trump still can use to pressure Iran to accept U.S. proposals to limit its nuclear ambitions, a person familiar with the administration’s thinking told the Associated Press. The person spoke on the condition of anonymity because they were not authorized to discuss private discussions on the record.

Privately, the argument being made to Trump is that the Iranians think they can weather the storm — but if they cannot pay their loyalists, that could pressure Iran to the table.

And some in the administration believe there are still more economic targets that can be hit that would put the economic hurt on Iran, including bonyads, the charitable trusts that account for a significant percentage of the Iranian economy.

Bessent told reporters that two Chinese banks have received warnings about handling Iranian money. Trump is preparing to visit Beijing next month for talks with Chinese President Xi Jinping.

Bessent also said that Iran’s Gulf neighbors are now willing to look at freezing Iranian money in their banks because of Iran’s aggression during the war.

Daniel Pickard, a sanctions attorney, said imposing secondary sanctions could result in “diplomatic and economic blowback” from allies that could hurt efforts to build coalitions against Tehran.

“A lot of our trading partners have been outspoken in regard to their opposition to the conflict in Iran,” Pickard said. “Most economic sanctions professionals would agree that when you get more people on the team, the chances of your economic sanctions being effective are greater.”

On Wednesday, the U.S. imposed sanctions on an oil smuggling network connected to the deceased senior Iranian security official Ali Shamkhani, who was a close advisor to the former Supreme Leader of Iran. Sanctions include dozens of individuals, companies, and vessels involved in secretly transporting and selling Iranian and Russian oil through front companies, many of which are in the UAE.

“Treasury will continue to cut off Iran’s illicit smuggling and terror proxy networks,” Bessent said in a statement. “Financial institutions should be on notice that Treasury will leverage all tools and authorities, including secondary sanctions, against those that continue to support Tehran’s terrorist activities.

The administration believes the momentum has shifted

Trump administration officials have also signaled growing confidence that the ceasefire and a blockade of shipments from Iranian ports in the Strait of Hormuz have shifted momentum in Trump’s favor.

Iran has endured tens of billions of dollars in damage during the bombardment to the country’s infrastructure — including setbacks to its oil industry, the heart of its fragile and long-isolated economy — that could take years to repair.

Vice President JD Vance on Tuesday said Trump “doesn’t want to make, like, a small deal. He wants to make the grand bargain.”

“That’s the trade that he’s offering,” Vance said. “If you guys commit to not having a nuclear weapon, we are going to make Iran thrive.”

The president’s deputy chief of staff, Stephen Miller, offered a more caustic assessment of the moment, suggesting that Trump had “played the checkmate move” on Iran by implementing the blockage in the strait.

“If Iran chooses the path of a deal that’s great for the world, that’s great for everybody. If Iran chooses the path of economic strangulation by blockade, then the world will pass Iran by,” Miller said in a Fox News appearance Tuesday evening. “New energy routes will be established. New supply chains will be established. Other nations throughout the region — throughout the world, and especially America — will power the world and Iran will become a footnote.”

Some Republicans are skeptical that more sanctions will work

Some Republicans believe that any tactic to exert more pressure on Tehran is worth trying.

“I would support anything,” said Sen. Thom Tillis (R-N.C.). “If the administration came up with the ideas, I would support all of the above. More pressure, the better.”

Others were skeptical, noting that Tehran was already facing a litany of economic penalties that had little impact on its behavior.

“I’m not sure if it’s sanctions that’ll do it. I think we’re putting some pretty heavy sanctions on right now,” said Sen. Mike Rounds (R-S.D.), a member of the Banking and Armed Services Committees. “I personally am just not optimistic that we actually can fix this thing without a regime change.”

Trita Parsi, executive vice president of the Quincy Institute, a think tank that has been critical of Trump’s decision to launch the war, says that Trump had been “politically cornered and strategically constrained” before he announced the ceasefire. But now, Parsi argues, Trump may have altered the difficult dynamic and created a situation where “Iran now appears to need an agreement more than the United States does.”

“The window now open offers Tehran a chance to convert battlefield leverage into lasting strategic gain,” Parsi wrote in a new analysis. “To let it close would mean forfeiting not just incremental progress, but the possibility of reshaping its economic and geopolitical position. By contrast, the United States, having already secured a tenuous exit ramp through the ceasefire, has less at stake in the short term.”

Hussein, Madhani, Weissert and Kim write for the Associated Press.