Economy

Iran’s Islamic Revolutionary Guard Corps (IRGC) has warned commercial vessels to only use routes through the Strait of Hormuz approved by Tehran, reopening a point of friction in fragile negotiations between the United States and Iran over the future of the strategic waterway.

The warning came after Oman announced a new shipping transit route through the strait on Wednesday, saying it had coordinated the route with the International Maritime Organization (IMO) as maritime traffic slowly resumes following weeks of disruption.

The dispute remains one of the unresolved issues after a memorandum of understanding (MoU) was signed by the United States and Iran last week, which largely halted hostilities in the four-month US-Israel war on Iran and which launched a 60-day negotiation process aimed at reaching a broader peace agreement.

The MoU, which includes the reopening of the strait, followed months of severe disruption to shipping after Iran effectively closed it, and the US imposed a corresponding naval blockade on Iranian ports.

Both Washington and Tehran have declared the strait open to commercial shipping, but questions remain over whether Iran will seek greater control over vessel movements, whether it will impose transit or service fees on ships using the strait following the 60-day negotiating period, and whether disagreements over the waterway could derail efforts to reach a permanent agreement altogether.

Why is the Strait of Hormuz so important?

The Strait of Hormuz is one of the world’s most strategically significant waterways, with around one-fifth of global oil and liquefied natural gas (LNG) supplies normally being shipped through the narrow passage linking the Gulf to the Arabian Sea.

Bordered by Iran to the north and Oman and the United Arab Emirates (UAE) to the south, the strait is only about 50km (31 miles) wide at its entrance and exit, narrowing to about 33km (21 miles) at its tightest point. Despite its width, it is deep enough to accommodate the world’s largest oil tankers.

According to the US Energy Information Administration, about 20 million barrels of oil and petroleum products transited the strait each day in 2025, representing hundreds of billions of dollars in annual energy trade.

The route is used not only by Iran but also by Iraq, Kuwait, Qatar, Saudi Arabia and the UAE. It is also vital for global fertiliser exports, with roughly one-third of international fertiliser trade normally passing through the strait.

Because disruptions to shipping there rapidly push up global energy prices and destabilise US markets, control of the waterway has become one of Iran’s strongest sources of strategic leverage in its conflict with the US.

Why is Iran objecting to Oman’s new route?

The IRGC says Oman and the IMO announced the new shipping corridor without consulting Tehran. “Certain authorities have announced a new shipping route through the Strait of Hormuz without prior notification to or coordination with the Islamic Republic of Iran. The proposed route is unacceptable and poses serious safety risks,” the force said.

“The only authorised transit routes through the Strait of Hormuz are those designated by the Islamic Republic of Iran,” it said, adding that ships must maintain contact with the IRGC Navy while transiting the waterway.

Iran first issued its own map of acceptable routes through the strait in April, showing that ships should pass much closer to the Iranian coast than they had previously.

The IRGC’s warning came after a Liberian oil tanker passed through the strait on Thursday using a route much closer to Oman’s coastline.

Al Jazeera’s Resul Serdar, reporting from Tehran, said the IRGC appeared frustrated because the Omani route partially bypasses Iran’s direct control over shipping.

“The control of the Strait of Hormuz has been a huge leverage for Iran to put pressure on its adversaries and the global economy since the beginning of the war,” Serdar said.

Oman defended the corridor route it had announced, saying it was intended to restore safe navigation while complying with international law. Foreign Minister Badr Albusaidi said Oman remained committed to ensuring freedom of navigation through the waterway and stressed that “future arrangements related to the strait do not involve imposing any transit fees”.

What does the US-Iran agreement say about the strait?

In the MoU signed last week, Iran agreed that it would “make arrangements using its best efforts for the safe passage of commercial vessels with no charge, for 60 days only, from the Persian Gulf to the Sea of Oman and vice versa”.

While the agreement states that “the traffic of commercial vessels will immediately start”, it also acknowledges that demining operations will be required before normal shipping routes can fully resume, stating that “demining by the Islamic Republic of Iran will be instated within 30 days”. It also provides for discussions between Iran, Oman and other Gulf states on future arrangements for managing the waterway.

However, the memorandum does not specify what will happen after the initial 60-day period. Ali Vaez, Iran project director at the International Crisis Group, said the temporary rerouting of vessels had always been expected because of the mine-clearing operations outlined in the agreement.

“We always knew that if there was a deal, there would be several weeks of mine-clearing operations in the international shipping lane running through the middle of the Strait of Hormuz,” he said.

“During that period, vessels would have to transit through Iranian and Omani territorial waters instead.”

However, Vaez said the latest announcement by Iran was unexpected. “The important thing now is that the Iranians do not start taking fees or other tolls,” he said, “because that is not provided for in the memorandum of understanding.”

Asked whether the IRGC’s position differed from that of Iran’s government, Vaez said: “There is no distinction between the IRGC and the state. They are effectively one and the same. The IRGC is calling the shots.”

Can Iran charge ships fees?

International law generally protects the right of transit through international straits, including Hormuz, making it difficult for coastal states to impose unilateral transit fees on vessels simply passing through international shipping lanes, even where they are within territorial waters.

Last week, Iran announced it would waive planned fees through the strait for 60 days while talks with the US continue in Switzerland, suggesting charges may be introduced once the negotiating period expires.

Iran’s chief negotiator, Mohammad Bagher Ghalibaf, has signalled that Tehran views the post-war arrangement as fundamentally different from the status quo that existed before the conflict.

“Hormuz will never return” to its prewar status, Ghalibaf said.

The suggestion that Iran could charge fees was dismissed by US Secretary of State Marco Rubio this week. Speaking at the start of a regional tour in the United Arab Emirates, he said: “It’s an international waterway. No country is allowed to charge tolls or fees on an international waterway.”

Rubio added that he believed “all the countries in this region would agree”.

Speaking in Manama, Bahrain, after meeting with the Gulf Cooperation Council (GCC) – a bloc comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – on Thursday, Rubio also told reporters: “Iranians are saying one thing, but then something else is actually happening.

“It’s now obvious to us that … the Iranian system is going to produce all sorts of maximalist rhetoric. What we’re interested in is not their press conferences. What we’re interested in is whether or not ships are moving. If ships are moving as they should be moving, then that’s what we’re going to judge.

“If, on the other hand, this rhetoric is backed up by actual ships being threatened and ships are not moving, then that’s a violation of the agreement, and we’re going to have a problem with it.”

Rubio claimed there is no regional support for Iranian transit fees, saying, “There is zero support among Gulf countries for any sort of toll or fees charged for the use of international waters … that isn’t going to happen.”

His comments came after UAE presidential adviser Anwar Gargash said that new “geopolitical facts” could not be imposed on the Arab Gulf states as a result of what he described as the “treacherous aggression against them”.

Are ships returning – and which route are they taking?

Some commercial shipping through the strait has resumed, although traffic remains well below normal levels. Before the conflict, between 120 and 140 vessels typically transited the strait each day.

According to shipping analytics company Kpler, confirmed crossings rose to 70 vessels on Wednesday as demining progressed and more operators began using the Omani route.

“The US-Iran MoU framework and apparent lifting of the US blockade appear to have supported a short-term confidence boost, although IRGC warnings against use of the Omani route could create a new source of contention,” Kpler reported.

The company added that incomplete demining, continued “dark” routing by some vessels – when ships limit or switch off their tracking transponders – and unresolved questions over inspections, sanctions and future governance meant shipping had not yet returned to prewar conditions.

This comes as oil prices drop to the lowest level since before the Iran war, with Brent crude, the global benchmark, falling to a low of $72.24 a barrel on Thursday. This remains above the prewar price of $66, however.

The chart below shows how shipping through the strait before the war compares to its status in recent weeks:

Is a peace deal achievable?

The future administration of the Strait of Hormuz is only one of several issues still to be resolved before negotiators hope to reach a comprehensive agreement within 60 days, with another major sticking point being Iran’s nuclear programme.

International Atomic Energy Agency (IAEA) Director-General Rafael Grossi has said the agreement explicitly provides for international monitoring of Iran’s nuclear activities.

However, Kazem Gharibabadi, Iran’s deputy foreign minister for legal and international affairs, has said inspectors’ access to nuclear sites damaged during the conflict will only be considered as part of a final agreement.

Questions also remain over the fate of Iran’s enriched uranium stockpile, the sequencing of sanctions relief and the release of frozen Iranian assets, while regional tensions continue to pose additional risks.

Israeli forces remain deployed in parts of southern Lebanon occupied during the conflict, according to a Lebanese military source, while Israeli strikes have continued, despite the MoU explicitly calling for “a permanent end to the war on all fronts, including Lebanon”.

Vaez said visible progress would be essential if negotiations are to survive, noting, “Both sides have to see progress, whether that’s greater access for UN nuclear inspectors, sanctions relief, or resolving the issue of Iran’s uranium stockpile.”

He cautioned against viewing the interim agreement as a series of smaller deals. “Nothing is agreed until everything is agreed,” Vaez said.

“They [the Iranians] are determined to reach a comprehensive agreement within 60 days. That’s a very ambitious timetable, but there has to be visible momentum or the process risks falling apart.”

However, Vaez said both Washington and Tehran have strong economic incentives to bring about a lasting peace. “The situation in the Strait had become one of mutually assured economic destruction,” he said.

“The United States was facing rising energy and oil prices ahead of the midterm elections … At the same time, Iran was already in a deep economic hole before this conflict began. The war only made that worse.

“It became a lose-lose dynamic, and both sides needed a way out.”

The price of Brent crude has reached its lowest since February 27, before the war started.

Oil prices have extended their decline to levels last seen before the start of the Iran war, as expectations of rising supply from the Middle East outweighed demand concerns.

Prompt-month Brent crude futures for August delivery fell $1.06 (1.44 percent) to $72.68 a barrel by 06:39 GMT, while US West Texas Intermediate (WTI) lost 76 cents (1.08 percent) to $69.58 a barrel.

Both contracts hit their lowest since February 27.

August Brent was trading lower than September, which was priced at $73.59, signalling ample short-term supply.

Brent had fallen by more than $3 on Wednesday as supply concerns eased, while WTI settled down nearly $3.

US Energy Secretary Chris Wright told a forum that flows through the Strait of Hormuz were close to those before the start of the Iran war, with at least 20 million barrels having exited the strait in the past 24 hours.

A return to complete normality would take a few weeks, however, because the strait needs to be cleared of mines, he added.

Rising Middle East supply, together with Iran set to boost sales after a temporary reprieve from US sanctions, drove down prices of physical crude oil cargoes around the world.

New routes

An initial accord last week to end the US-Israeli war with Iran, which began on February 28, has allowed the resumption of traffic through the strait.

The accord set up a 60-day period of negotiations to tackle tougher issues, such as Iran’s nuclear programme.

Wright said oil would continue to flow through the strait even if the deal did not hold, and that Iran would not be able to close it again.

Tehran has said it plans to impose what it calls maritime service fees, as opposed to tolls, while the United States argues it is an international waterway and therefore should not be charged.

Oman opened temporary routes on Wednesday to ease tanker departures from the strait, with the International Maritime Organization and Omani authorities coordinating movements.

On Thursday, Iran’s Revolutionary Guards warned against any crossings of the Strait of Hormuz without authorisation, saying vessels not complying “will be dealt with” and condemning the new routes.

Lawsuit claims Tesla’s Autopilot shortcomings led to fatal crash; family seeks $1m in damages and punitive measures.

The family of a Texas woman who was killed has filed a lawsuit against Tesla after a driver using a Model 3’s automated driving assistance system crashed into a suburban Houston home last week.

The complaint, filed on Tuesday, argues that Tesla should be held liable for the wrongful death of 76-year-old Martha Avila. The family alleges that the automaker, led by Elon Musk, failed to adequately warn drivers about alleged defects in its Autopilot and Full Self-Driving systems.

Avila’s daughter, Jennifer Barbour, and her husband, Justin Barbour, said the Model 3’s driver, Michael Butler, told law enforcement he engaged Autopilot before ploughing through the front wall of Avila’s home in Katy, Texas, the United States, on June 19, pinning her before she succumbed to her injuries at a nearby hospital, according to the complaint.

Video obtained by KHOU – Houston’s CBS affiliate — shows the car travelling at top speed over the front lawn of Avila’s home in the Houston suburb before slamming into the front room.

The driver told the Harris County Sheriff’s Office that he was using the technology at the time of the accident. The driver in the incident was not under the influence of alcohol and is cooperating with authorities.

Butler is also a defendant in the Barbours’ lawsuit. It is unclear whether he has a lawyer.

Musk, the world’s richest person, posted on X on Monday night: “FSD drives slowly through neighbourhood streets and this was a high-speed crash!”

Ashok Elluswamy, vice president of AI software at Tesla, posted on X in response, saying that “the driver manually overrode self-driving by pressing the accelerator all the way to 100% of the accel pedal in this residential area.”

The lawsuit filed in a Harris County, Texas, state court seeks more than $1m in damages, and punitive damages reflecting Tesla’s alleged “reckless disregard for a substantial risk of severe bodily injury”.

The National Highway Traffic Safety Administration (NHTSA) has been investigating the crash.

Since 2016, the NHTSA has opened nearly 50 special investigations of Tesla crashes believed to involve advanced driver assistance systems. About two dozen deaths were reported.

In March, the NHTSA escalated its probe into 3.2 million Teslas equipped with Full Self-Driving, on concern the system may fail to detect or warn drivers in poor visibility. In 2023, Tesla recalled about two million vehicles, nearly all of its electric vehicles on US roads, to better ensure that drivers pay attention when using Autopilot.

Tesla has said Autopilot enables vehicles to steer, accelerate and brake within their lanes, while Full Self-Driving lets vehicles obey traffic signals and change lanes.

The carmaker has also said both technologies require “fully attentive” drivers whose hands are on the wheel.

The incident comes as the Musk-owned company is rolling out robotaxis using automated software in several US cities this year and plans to invite Tesla owners across the country to put their cars into the fleet using the same system.

China’s LineShine overtakes US-based El Capitan as most powerful supercomputer, according to the TOP500 list.

China has displaced the United States on an influential ranking of the world’s fastest supercomputers, underscoring Beijing’s growing capability to compete with the world’s leading superpower in cutting-edge technology.

China’s LineShine is the most powerful system on the planet, overtaking the US-based El Capitan, according to the biannual ranking announced in Hamburg, Germany, on Tuesday.

LineShine, located at the National Supercomputing Centre in Shenzhen, achieved a performance of 2.198 exaflops, carrying out more than 2 quintillion calculations per second – a 20 percent lead over El Capitan, according to the latest TOP500 list.

LineShine’s position marks the first time a Chinese system has topped the list since Sunway TaihuLight did so in 2017.

El Capitan, based at Lawrence Livermore National Laboratory in California, had ranked as the top-performing system since November 2024.

Frontier, hosted by the Oak Ridge National Laboratory in Tennessee, ranked third, followed by Aurora at the Argonne National Laboratory in Illinois and Jupiter at the Jülich Supercomputing Centre in Germany.

Other countries represented in the top 20 include the UK, Japan, South Korea, Italy, the Netherlands, and Switzerland.

Unlike other supercomputers, LineShine runs entirely on general-purpose central processing units (CPUs), which have fewer processing cores and are slower at performing complex tasks than the graphics processing units (GPUs) indispensable to running AI models, such as ChatGPT and Claude.

LineShine is the first and only system to achieve more than 2 exaflops in performance using a CPU-only design, according to the TOP500 list.

The TOP500 list has been published twice yearly since 1993, when computer scientists Erich Strohmaier and Hans Meuer first compiled statistics on supercomputers around the world in preparation for a conference on the topic.

The list ranks supercomputers’ performance using the LINPACK Benchmark, which measures the amount of time it takes to solve a dense system of linear equations.

While the TOP500 list has been influential for decades, experts consider the ranking to have become less relevant since the advent of AI.

While corporate tech giants such as Microsoft and Amazon are at the forefront of today’s advances in AI, the list is largely made up of government and academic initiatives that volunteered their participation.

In a 2015 paper, researchers at Cornell University estimated that El Capitan achieved only 22 percent of the computational performance of xAI’s Colossus supercomputing facility in Memphis, Tennessee.

China and the US are locked in a fierce battle for global supremacy in leading technologies such as AI, with Washington and Beijing rolling out a slew of tit-for-tat sanctions and export controls to blunt each other’s advances.

The 2026 AI Index Report, released in April by Stanford University, found that China had “effectively closed” the AI model performance gap with the US.

While the US produces more top-of-the-line AI models, China holds the advantage in rolling out patents and industrial robot installations, the report said.

MACUNGIE, Pa. — President Trump visited a Mack Trucks facility in battleground Pennsylvania on Tuesday, attempting to shift attention to the U.S. economy in his first major public event outside the nation’s capital since he signed an interim agreement to end the Iran war.

The trip to Macungie, in the Allentown suburbs, came as Trump works to put the conflict — and the higher gasoline prices it caused — in the rearview mirror as the November midterm elections draw closer.

Trump had a private tour of the facility, but his speech often felt more like a reelection rally from two years ago than an effort to promote his second-term accomplishments.

The president listed longstanding political grievances, and made only passing mentions of promoting Republicans ahead of Election Day — while spending more time bragging about the UFC fight he staged on the White House lawn in honor of his own 80th birthday than he did the economy.

At one point, Trump even called UFC fighters Bo Nickal and Anthony Cassar to the stage and mused about whether he could beat either one of them in a wrestling match if he were to “work out for the next couple of months.”

It was Trump’s fifth second-term visit to Pennsylvania, a state whose support in 2016 and 2024 helped him to win the White House. The truck factory is in a district where incumbent Republican Rep. Ryan Mackenzie faces Democratic challenger Bob Brooks in November.

“For more than 100 years, this legendary company has been making trucks right here in eastern Pennsylvania,” Trump said, “building the heavy duty machinery that keeps our economy rolling, our factories moving, and our industries roaring all across the nation.”

His visit coincided with rising prices that could color the verdict voters render on Trump’s stewardship in the fall. About one-third of U.S. adults approved of Trump’s approach to the economy, according to a June Associated Press-NORC Center for Public Affairs Research poll. That’s in line with last month for Trump on the issue.

The Iran war, which began Feb. 28, has also been a politically difficult issue for the president. Most Americans continued to disapprove of his handling of Iran, according to the June AP-NORC poll, which was being fielded as Trump announced a tentative deal with Iran and concluded just before the interim agreement was signed last week. It found that 65% of U.S. adults disapprove of how the president is handling issues with Iran, unchanged from May.

Still, while most Democrats and independents view Trump’s actions negatively, only about 3 in 10 Republicans are unhappy.

This is the kind of district that matters in November elections

Trump addressed a cheering crowd from a stage erected on the factory floor, flanked by two red, white and blue trucks and rows of workers in fluorescent safety vests under a large “American Workers First” banner.

It’s the kind of district that may prove pivotal to Republicans holding narrow control of the House, where a loss could hobble the president’s final two years in office.

Mackenzie, a freshman lawmaker, is looking to hold on to a district Democrats have targeted to flip. Brooks, president of the state firefighters’ union, has support from Democratic Gov. Josh Shapiro, who’s also seeking reelection this year.

Trump urged the crowd to support Mackenzie, saying of his trip, “I’m not doing this for my health.” But he devoted more energy to issues such as the U.S.-Mexico border, opposing transgender rights and decrying “Marxist” judges, while also referencing his administration’s efforts to lower prescription drug prices.

“We gotta win the midterms,” Trump said, in one of the few references he made to the midterms. Later, however, he suggested it wasn’t actually a “political season,” perhaps because he himself won’t be on the ballot in November.

On Iran, Trump suggested that the country would be smart and keep negotiating during the ceasefire. “Otherwise we’ll have to finish the job, which will take about, maybe less than a week,” he said.

An odd moment came when the president offered, “The ideology of the Muslims is slightly different than the ideology of the Catholics. We have the Catholics and the Muslims slightly different.” He didn’t elaborate.

Biden came to the same plant previously

Trump’s predecessor, Democrat Joe Biden, visited the same Mack Trucks facility in 2021 to highlight regulations aimed at promoting manufacturing jobs. Manufacturing employment peaked in 1979 at nearly 19.6 million jobs. It trended downward after the 2001 recession and the 2007-9 Great Recession. The figure now stands at 12.6 million as of May, according to the Bureau of Labor Statistics.

In 2025, the truck facility got hit by market uncertainty, including sweeping tariffs that Trump’s administration imposed, and about 170 people were laid off, according to Mack spokesperson Kimberly Pupillo. She added that by the end of last year, almost 150 people were recalled to work and anyone laid off last year was given the chance to return.

There are about 2,800 workers at Mack, Pupillo said.

At a pizzeria down the road from the truck facility, workers and diners said they’d heard about the president’s visit and recalled Biden’s trip to the plant.

George Carver, a retired elementary school principal, said he wasn’t a fan of Trump’s. “I’m looking for a president who’ll clean up this mess,” he said, meaning improve the economy and better handle the war in Iran and immigration.

“I’m looking for someone who’s gonna tell the truth — that could be a Democrat or Republican,” Carver said.

Trump’s visit underscores Pennsylvania’s status as a crucial swing state.

Trump made a trip to Mount Pocono in December 2025 to road test messages that he’s addressing affordability; in July 2025, he was in Pittsburgh to tout tens of billions of dollars of recent energy and technology investments in the state; in June 2025, he was in West Mifflin to tell steelworkers he was doubling the tariff on steel imports to protect the industry; and in March 2025, he attended the NCAA wrestling championship in Philadelphia.

Denise Green, a retired software trainer, was among a handful of people protesting the visit outside a McDonald’s across the street from the plant.

Green said she was a former Republican who became a Democrat in 2007 because her original party backed policies where “all the money” was going to the rich.

Green said her key issue was Social Security funding, which she said she’ll need but is worried could run out.

“It’s outrageous,” she said.

Catalini and Kim write for the Associated Press.

Coca-Cola and the Internal Revenue Service (IRS) of the United States will face off in a Florida court this week in the latest episode of a decades-long legal battle over the beverage giant’s tax liability on overseas profits.

The Atlanta, Georgia-based company and the US tax service will begin oral arguments on Thursday in a dispute that centres on transfer pricing – the practice of setting prices for transactions carried out between a company’s own affiliates – and could result in Coca-Cola facing a tax bill of about $20bn.

The case is being closely watched in corporate circles because the outcome will have implications for the amount of tax US-based multinational corporations must pay on income generated through their foreign subsidiaries.

What is the case about?

Coca-Cola is appealing a 2020 US Tax Court ruling that upheld the IRS’s finding that the soft drink giant underreported profits from transactions between its foreign subsidiaries.

In 2015, the IRS notified Coca-Cola that it owed billions in back taxes after concluding that the company had undercharged its units in Ireland, Brazil, Chile, Mexico, Costa Rica, Egypt and Eswatini, formerly known as Swaziland.

US multinationals often charge low licensing fees for their overseas units to minimise their reportable income in the US, which has a higher corporate tax rate than many of its peers.

“The IRS audited Coca-Cola because the company was earning astronomical profits in Ireland and a few other countries,” Alex Martin, an expert in transfer pricing at the tax consulting firm KBKG, told Al Jazeera.

The IRS first took Coca-Cola to court in 2015, but the origins of the dispute date back to 1996 when the two sides settled a tax audit for liabilities from 1987 to 1995.

Under the pricing formula agreed in that settlement, Coca-Cola’s foreign affiliates were allowed to retain a profit equal to 10 percent of their gross sales with the remaining income split evenly between the US headquarters and the overseas unit.

Coca-Cola argues that it should be able to continue to use this formula from 1996 while the IRS contends the terms of that settlement should have no bearing on the soft drink giant’s tax liabilities arising from audits in 2007, 2008 and 2009.

“The amount of potential exposure is about $20bn, so it is significant,” Reuven Avi-Yonah, an expert in taxation law at the University of Michigan Law School, told Al Jazeera.

Coca-Cola agreed to pay the IRS $6bn in back taxes and interest in 2024 while preparing its appeal but could be liable to pay up to $14bn more if the US Court of Appeals for the Eleventh Circuit sides with the government.

Coca-Cola argues that the IRS “misinterpreted and misapplied the applicable regulations” and has expressed its confidence that it will be successful in its appeal.

Why does the case have implications beyond Coca-Cola?

The case is important because it could serve as a template for the US government to raise more tax revenue from large multinational companies that generate huge profits overseas.

“The IRS designated this case for litigation because this litigation can provide a template for the IRS to audit other US companies with highly profitable subsidiaries,” Martin said.

Under the administration of former US President Joe Biden, the IRS ramped up its tax collection efforts against companies benefitting from transfer pricing arrangements.

In one of the most high-profile transfer pricing cases in recent years, the IRS announced in 2023 that Microsoft owed $28.9bn in back taxes, plus penalties and interest, on income derived from the distribution of software through its subsidiaries in Puerto Rico, Ireland and Singapore.

Microsoft said it disagreed with the IRS’s reasoning and would appeal to the tax service and, if that failed, go to court.

In 2024, the IRS announced that the short-term rental platform Airbnb and Newell Brands, a consumer products manufacturer, had underpaid their taxes to the tune of $1.33bn and $90m, respectively.

Airbnb and Newell Brands have both challenged the IRS’s determinations in the US Tax Court.

The Coca-Cola case is particularly significant because the IRS has historically fared poorly in litigating transfer pricing complaints, losing a string of cases against major corporations through the decades, including Bausch & Lomb, US Steel Corp and Hospital Corp of America.

“It is important because it is the first clear victory of the IRS in this kind of case involving profit shifting out of the US in many decades, so if it is upheld on appeal, more companies may be inclined to settle rather than litigate,” Avi-Yonah said.

Blast at Ras Laffan Industrial City caused by ‘technical malfunction’, Ministry of Interior says.

An explosion at Qatar’s main liquefied natural gas processing facility has injured 54 people and left 18 others missing, authorities have said.

The Qatari International Search and Rescue Group were deployed to conduct search operations for those missing following the “internal explosion” at Ras Laffan Industrial City, Qatar’s Ministry of Interior said on Monday.

The ministry did not provide information on the conditions of those injured in the incident, which it blamed on a “technical malfunction”.

Officials had said earlier that civil defence teams responding to the scene had not recorded any injuries.

The ministry said there was no leakage from the facility that would pose a danger to public safety.

QatarEnergy, which administers the industrial hub, said emergency response teams were immediately deployed after the explosion at the Barzan factory and brought a fire at the facility under control.

Ras Laffan Industrial City, located about 80km (50 miles) north of Doha, is home to the world’s largest LNG export facility, producing about one-fifth of global supply.

In March, the Qatari government announced that the industrial hub had sustained “significant damage” after being targeted by Iranian missile and drone attacks.

QatarEnergy invoked the force majeure clause in some of its contracts to free itself from its supply obligations following the attacks, affecting customers ⁠in Italy, Belgium, South Korea ⁠and China.

Ship tracking data shows sharp fall in transits as US and Iranian officials hold talks to save fragile peace framework.

Shipping in the Strait of Hormuz has plunged following Iran’s announcement that it has closed the waterway once again over Israel’s strikes on Lebanon, according to ship tracking data.

A total of 12 vessels crossed the strait on Sunday, down from 35 transits the previous day, an analysis by maritime intelligence company Windward showed on Sunday.

Five of eight vessels entering the strait had their Automatic Identification Systems turned off, according to Windward.

“The current traffic profile: dark, sanctioned, Iranian-linked, resembling the late-blockade baseline more than a functioning open strait,” Windward said in a post on X.

Maritime traffic in the strait had been showing signs of recovery since US President Donald Trump and Iranian President Masoud Pezeshkian on Wednesday signed a memorandum of understanding on ending the US-Israel war on Iran.

Twenty-five vessels transited the strait on Thursday, the highest number since mid-April, according to data from maritime intelligence provider Kpler.

Iran’s Islamic Revolutionary Guard Corps on Saturday declared the waterway shut, citing Israeli “crimes” in Lebanon and the failure of the US to maintain a ceasefire in the country.

US Central Command (CENTCOM) on Saturday denied that Iran had closed the strait, which normally carries about one-fifth of global oil and liquified natural gas supplies, saying that safe passage through the waterway remained “intact”, with 55 merchant ships transiting that day.

The cause of the discrepancy between the transit figures provided by CENTCOM and commercial ship tracking providers is unclear.

US and Iranian negotiators on Sunday held make-or-break talks in Switzerland as the conflict in Lebanon threatened to derail efforts to turn their 60-day ceasefire extension into a permanent peace deal.

In a briefing to Iranian media after the talks, Iranian Ministry of Foreign Affairs spokesman Esmaeil Baghaei said the sides had discussed the safe passage of ships through the strait, and “a mechanism was set up, which is important”.

Despite renewed tensions between Washington and Tehran and signs of slowing traffic in the strait, oil prices moved lower on Monday morning in Asia.

Brent crude, the primary international benchmark, was down about 0.9 percent as of 01:30 GMT, at just below $80 a barrel.

Asia’s major stock markets opened higher, with key indices in Japan, South Korea and Taiwan making substantial gains.

Tokyo’s Nikkei 225 and Seoul’s Kospi were up 1.8 percent and 1.5 percent, respectively, while the Taiex in Taipei surged 2.6 percent.

Hong Kong’s Hang Seng Index bucked the rally, dipping 0.7 percent.

Tests confirm a migratory brown skua found in ‌Western ‌Australia had the virus.

Prime Minister Anthony Albanese says Australia will do “whatever we can” to curb H5N1 bird flu after the first mainland case was confirmed in a seabird, which means the virus has now spread to every continent.

Tests confirmed a migratory brown skua found in ‌Western ‌Australia’s Cape Le Grand National Park had the deadly virus, authorities said on Saturday, and a giant petrel found in the same area was also suspected to be infected.

“This is concerning,” Albanese told reporters in Sydney, adding his government would do “whatever we can to restrict any spread”.

Previously, Australia had been the only continent without a confirmed mainland case, although the virus was detected in late 2025 on Heard Island, a sub-Antarctic territory about 4,100km (2,550 miles) from the mainland.

Agriculture Minister Julie Collins said the virus had not yet been detected in Australia’s poultry or agriculture sector.

“We all knew we couldn’t be bird flu-free forever,” she said.

Human infections remain rare, but the highly pathogenic avian influenza has led to the culling of hundreds of millions of birds globally in recent years, disrupting food supplies and driving up prices.

WASHINGTON — Most Americans continue to disapprove of how President Trump is handling Iran, while his overall presidential approval holds steady, according to a new AP-NORC poll that was conducted as he suggested a deal with Iran had been reached.

The poll points to just how unpopular the war, which began Feb. 28, has been with Americans even as the Republican president turned abruptly from threatening Iran to reopening negotiations. Support for his handling of the war remains lopsidedly partisan. About two-thirds, 65%, of U.S. adults disapprove of how Trump is handling issues with Iran. But while the vast majority of Democrats and independents view Trump’s actions negatively, only 28% of Republicans are unhappy.

Americans’ views on how the president is handling Iran are roughly in line with his overall job approval, which stands at 37%, unchanged from an Associated Press-NORC Center for Public Affairs Research poll conducted in May.

The new survey was conducted June 11-17, just after Trump called off threats to escalate the war with Iran. The poll was fielded as Trump announced a deal with Iran and authorized an end to the U.S. naval blockade in the Strait of Hormuz, concluding just before the deal was signed Wednesday.

Approval of Trump’s actions on Iran has been low over the past few months. But in interviews, some Republicans also weren’t pleased with the outcome of this week’s agreement, which gives Iran an immediate benefit, allowing it to sell its oil freely again.

The deal also reopens the strait without tolls for two months, restarts talks between the U.S. and Iran over Tehran’s nuclear program and calls for Tehran to dilute its stockpile of highly enriched uranium.

David Farrington, a 79-year-old Republican-leaning independent in Fort Worth, Texas, “doesn’t have any love lost” for Iran, but he’s frustrated the agreement focused on the strait and didn’t deliver more on the country’s nuclear weapons program.

“Any agreement regarding the strait is hardly what I would consider a recognizable concession on the part of Iran,” Farrington said. “So, I consider that some fluff that attempts to make this agreement look better when it’s not.”

Trump’s approval on Iran remains flat

Only about one-third of U.S. adults approve of how Trump is handling Iran in the new poll, in line with May.

Donald McBride, a 28-year-old independent in Plano, Texas, is frustrated that Trump has not maintained his campaign promise to keep America out of foreign wars. McBride voted for Trump but he opposed going to war with Iran.

“I would like the war to end,” he said. “The original objective of the war was to end the Iranian regime, and that’s just not possible. I don’t really know why we’d continue fighting.”

The poll suggests most Americans want action in Iran to wrap up. Even with an agreement on the horizon, 53% of U.S. adults said American military action against Iran had “gone too far,” only a slight decline from 59% in March.

About 4 in 10 Republicans, though, said in the latest poll that action has been “about right,” and 37% said it had not gone far enough.

Joan Jones, a 64-year-old independent in northwest Florida, believes the United States’ actions in Iran have been necessary to address the threat Iran posed.

“Those attacks are ultimately to protect us from nuclear attacks,” Jones said. “I think we have to go through that … and eliminate that worry so we don’t have that hovering over us.”

Few approve of Trump’s approach on Israel

About one-third, 34%, of U.S. adults approve of how Trump is handling Israel.

Tensions have been rising between Israeli Prime Minister Benjamin Netanyahu and Trump as the president criticizes recent Israeli attacks in Lebanon, which jeopardized negotiations between Washington and Tehran.

James Huffman, a 69-year-old Republican in Medway, Ohio, thinks Trump is taking the wrong strategy when it comes to Netanyahu.

“Netanyahu is not going to do everything Trump wants. He’s going to do what he wants,” Huffman said. “I just don’t think it’s effective.”

Only about one-third approve on the economy

About one-third of U.S. adults approve of Trump’s approach to the economy. That’s in line with last month, and continues a challenging stretch for Trump on the issue.

Jones, the Florida independent, is more optimistic than most. She said she can hardly leave the house some hours without getting stuck in the traffic of tourists headed to the beach on vacation. She also spots lines around the block for Starbucks, McDonalds and Chick-fil-A in her community — all signs to her that the economy is doing well overall.

“I think President Trump’s policies are contributing to a better economy,” Jones said.

Other Republicans are more skeptical, a troubling sign for a president who prides himself on his business acumen. Only 69% of Republicans approve of how he’s handling the economy, slightly lower than the 78% who approve of how he’s handling the presidency overall.

Patricia Bailey, a 42-year-old Republican in Parkersburg, West Virginia, sees an economy where prices have gotten out of control. “I just said the other night, ordering pizza is for rich people,” she said. Bailey voted for Trump but added, “He’s kind of let me down a little bit.”

Even if high prices preceded Trump, Bailey doesn’t think he’s lived up to his pledge to improve the economy.

“I think he got so distracted with the war that he forgot some old promises,” she said.

Sanders and Thomson-Deveaux write for the Associated Press.

The AP-NORC poll of 3,040 adults was conducted June 11-17 using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for adults overall is plus or minus 2.8 percentage points.

United States President Donald Trump has taken to social media to boast about the state of the economy amid a looming peace deal between the US and Iran, which yesterday signed a memorandum of understanding (MoU) to end the US-Israel war on Iran.

In a post on his social media platform Truth Social, the president claimed that “OIL IS FLOWING” and added that “THE STOCK MARKETS ARE ROARING, JOBS ARE AT RECORDS, AND PRICES ARE DROPPING (AFFORDABILITY!)”

While some of his claims are accurate, others are misleading. Al Jazeera takes a look:

‘Stock Market Just Hit A RECORD High’

That is true specifically for the Dow Jones Industrial Average. That index hit a record high of 51,999.67 for its close on Tuesday amid the potential of a ceasefire and a rally for the newly listed SpaceX.

The Dow slipped from that high on Wednesday amid the US Federal Reserve’s announcement that it would maintain the benchmark interest rate in the target range of 3.5-3.75 percent, and closed down on Wednesday at 51,494.99. The Dow has since jumped 0.35 percent in midday trading on Thursday at 51,671.

The Nasdaq Composite Index and S&P 500 both slipped.

However, this may not directly impact the 38 percent of Americans who do not invest in the stock market.

“The idea that the stock market is doing well does not reflect people’s experiences. There’s a saying that the stock market is not the economy, and that’s an important thing to keep in mind,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University, told Al Jazeera.

And that lived experience is at the petrol station and at the grocery store.

‘Prices are dropping’

Petrol prices have started to tumble in the last few days. The average price of a gallon of petrol (3.78 litres) on Thursday is at $3.99, according to the American Automobile Association (AAA), which tracks daily gas prices. That’s down from a high of $4.48 in May, but still well above $2.98, where prices were on February 28 when the US and Israel first struck Iran.

Despite the deal, experts believe that a petrol price decline will plateau for general consumers as the US strategic petroleum reserve, which earlier this week reached its lowest level since 1983, is refilled, all while oil extraction and shipping bottlenecks weigh on supply chains.

“The persistence of the price spikes is the key issue. Transportation, rerouting, insurance premiums, and manufacturing costs don’t normalise overnight, so even when oil stabilises, the cost base across the supply chain will stay elevated,” Tammy Kulesa, director of product marketing for supply chain execution at Blue Yonder, a supply chain management firm, said in remarks provided to Al Jazeera.

Mark Jones, professor of political science at Rice University in Houston, Texas, says prices will not return to prewar levels until the last quarter or close of 2027.

“Even once everybody believes the truce is going to hold [and] there’s no danger going through the Strait of Hormuz, those tankers take months to reach their final destination and come back,” Jones told Al Jazeera. “So the ability to replenish the stocks is going to take until, I think, the early fall [third quarter].”

Consumer inflation, which has jumped at the fastest pace in three years and is at 4.2 percent, has driven prices up on several key goods and has weighed on consumers. While energy prices have risen by nearly eight percent in the last two months alone, prices at the supermarket have jumped by 0.1 percent in May from the month prior after a 0.7 percent increase in April, with the highest increases in goods like bakery products, cereals, nonalcoholic beverages, as well as fruit and vegetables.

“There are real problems facing a lot of people. Prices are high, and wages have not kept up with prices. So people’s real purchasing power has fallen,” Klein said.

Supermarket chains have taken notice. Kroger, the largest supermarket chain in the US, said on Thursday that it will cut prices on thousands of products within its roughly 3,000 stores nationwide. This comes amid increased pressure from Costco and Walmart for value shoppers.

“Customers are being more deliberate with their spending and at times, shopping us selectively. We’re getting too many promotional trips and not enough of the full basket,” Kroger CEO Greg Foran said in a statement.

‘Jobs are at records’

Jobs are not at record levels, despite Trump’s assertions.

The US economy added 172,000 jobs in May. The highest during the second Trump term was 214,000, in March. By comparison, on average, 300,000 jobs were added monthly under his predecessor, former US President Joe Biden, a Democrat, with some months much higher – including July 2021, when the economy added 943,000 jobs, albeit that was on the back of the COVID-19 pandemic as businesses rushed to hire after massive layoffs.

Under Trump, there have been several months of limited job growth that have been hyper-focused on specific sectors like healthcare. On average, employers added only 15,000 jobs a month in 2025. Meanwhile, the US economy lost 92,000 jobs this year in February.

Layoffs are also on the upswing. Job cuts jumped 16 percent between April and May, marking the most layoffs since May 2020 during the height of the pandemic, according to Challenger, Gray and Christmas, with artificial intelligence (AI) as a driving force behind the cuts. Slightly more than 97,000 people lost their jobs in May.

‘Oil is flowing’

Overnight, 12.5 million barrels of crude oil travelled through the Strait of Hormuz, through which roughly a fifth of the world’s oil is normally shipped, according to US Vice President JD Vance. However, data from Kpler shows that travel through the strait is still low, with six verified crossings on June 17.

With the strait starting to open, oil prices tumbled to their lowest levels since the early days of the war as the temporary deal to end fighting and pull back sanctions elevated pressure on global supply.

Brent crude futures LCOc1 dropped $0.78 or one percent to $76.51 in midday trading.

Shipments of liquefied natural gas (LNG) have also ramped up, and a QatarEnergy LNG vessel has returned to Ras Laffan, where it has loaded more than 209,000 cubic metres, according to Kplr.

The value of Iran’s currency has risen by more than 15 percent against the US dollar, and its stock market has shattered records in the wake of the memorandum of understanding agreed between the United States and Iran on Sunday.

However, Iranians suffering for years from extremely high inflation and a plunging rial have found little economic relief as the prices of basic goods, such as food, remain high despite the diplomatic breakthrough.

The Iranian economy has suffered due to decades of US sanctions. The economic crisis was exacerbated after the US and Israel launched a war against Iran on February 28. As subsequent US naval blockade on Iranian ports further added to the misery of Iranians.

In Ferdowsi Street, the beating heart of Tehran’s foreign exchange market, the scene on Thursday was a stark departure from the panic of recent months. Exchange office boards flashed rapidly changing numbers as foreign currencies, led by the dollar, took a sharp dive.

“We closed our doors just hours before the official announcement of the US-Iran understanding at a rate of 1.8 million rials to the dollar,” Amir, a 35-year-old exchange office worker who asked to remain anonymous, told Al Jazeera. “Now it has fallen to 1.54 million rials, and we expect further declines.”

Amir noted a significant increase in sales volumes although buyers remained scarce as many anticipated the rial would strengthen further, potentially dropping to 1.4 million to the dollar or lower.

The recent gains mark a sharp turnaround. After the outbreak of the war, the exchange rate jumped to a historic peak of 1.9 million rials (190,000 tomans) to the dollar in March before settling at about 1.685 million just before recent attacks carried out despite a ceasefire.

A disconnect in the grocery aisles

Despite the rial’s recovery, a walk through Tehran’s grocery stores reveals a starkly different reality. For Iranians grappling with the economic fallout of crippling sanctions and the US naval blockade, the diplomatic thaw has yet to lower the cost of living.

Reza, a 42-year-old Tehran resident, told Al Jazeera that prices for daily staples like milk, cheese, cooking oil and flour remain unchanged. “They say the dollar dropped, but my shopping basket costs the same as last week,” he said. “This means the agreement hasn’t reached our pockets yet.”

From behind the cash register, 55-year-old shop owner Ramin echoed his customer’s frustration. He explained that while the government continues to distribute subsidised goods like bread, the fluctuations of the free-market dollar do not immediately impact basic food prices.

The value of the dollar on the free market varies from the official exchange rate.

Pointing to a shelf of imported goods, another shopkeeper named Karim noted that items like shampoo, toothpaste and laundry detergent are still locked at inflated prices.

“Distributors say they bought these goods two months ago at the old dollar rates,” Karim explained. “Prices will remain high until the old stock runs out and new goods enter at the lower exchange rates.” He estimated it would take at least two weeks for the market to adjust, meaning Iranians will continue to face compounding inflation in the interim.

Euphoria on the trading floor

While Main Street struggles, Tehran’s stock market is experiencing an unprecedented boom amid expectations of improved economic conditions. The trading floor has been awash in green since the initial leaks of the Washington-Tehran agreement emerged.

On Monday, the main index jumped by a record-breaking 161,000 points in a single session, marking the highest-ever influx of cash from individual investors.

By Tuesday, the market continued its staggering ascent, climbing another 112,000 points to cross the psychological barrier of 5 million, ultimately settling at a historic high of 5.1 million.

Saeed, a 40-year-old investor, called it a “historic day”. He noted that investors are rushing to buy shares in the energy and petrochemical sectors, betting heavily on the resumption of exports and the reopening of global markets.

However, Saeed remained cautiously optimistic. “The stock market is often driven by rumours,” he warned. “I don’t want to repeat the experience of the 2015 nuclear deal when the market soared and then collapsed after the US withdrawal.”

He was referring to US President Donald Trump’s 2018 withdrawal from the agreement, under which Iran agreed to restrictions on its nuclear programme in exchange for sanctions relief.

Stagnation in real estate and electronics

The wait-and-see approach in effect has paralysed other sectors of the economy. In central Tehran’s electronics hubs, 38-year-old shop owner Reza reported that while the prices of imported appliances have dropped in tandem with the dollar, sales have stalled because customers are holding out for steeper discounts.

A similar freeze has gripped the housing market. Nasrin, a 36-year-old real estate agent in northern Tehran, observed that a recent price surge that accompanied the initial truce has now given way to stagnation. Many property owners are clinging to inflated prices, seemingly unaware that the market dynamics have shifted, bringing property transactions to a virtual standstill.

‘Not a magic wand’

For macroeconomic experts, the mixed market signals are entirely expected. Hossein Selahvarzi, the former head of the Iran Chamber of Commerce, Industries, Mines and Agriculture, cautioned that the new agreement is “not a magic wand” capable of instantly fixing years of structural issues in the economy.

While the war severely damaged Iran’s infrastructure, Selahvarzi emphasised that the roots of the country’s economic malaise were firmly planted well before the bombing began.

“War is the enemy of investment, production, trade and public welfare,” Selahvarzi told Al Jazeera. He warned against the analytical mistake of believing that a peace memorandum alone would revive the economy.

“Ending the military confrontation does not necessarily mean the beginning of economic prosperity,” he said, stressing that restoring stability to the business environment remains the country’s most urgent priority.

“What we have before us is a limited and fragile opportunity to correct course and rebuild the economy, and this opportunity could be lost quickly if not managed correctly.”

For half a century, a handful of wealthy Western democracies wrote the rules of the global economy.

But the world order is becoming crowded, and even as the Group of Seven (G7) remains one of the world’s most influential clubs, a challenger has emerged.

BRICS has expanded, and says it wants a bigger voice for the Global South. This bloc of nations speaks for nearly half the world’s population – and accounts for a growing share of global output, energy and raw materials.

In the space between the two, a third force is gathering pace: the so-called middle powers, nations too big to ignore and unwilling to pick a side.

A controversial proposal to tax California billionaires to fund healthcare has tenatively qualified for the November ballot, setting the stage for a more intense and expensive battle over whether the state should squeeze the ultra-rich.

Supporters say the proposed tax is crucial to compensate for federal healthcare funding cuts, approved by President Trump and the Republican-controlled Congress, that will harm millions of the state’s most vulnerable residents.

In April, supporters of the billionaire tax submitted nearly 1.6 million signatures, roughly double the number needed to qualify. The California secretary of state’s office on Wednesday declared that enough valid signatures were submitted. The initiative will officially qualify for the Nov. 3 ballot on June 25 unless the proponents withdraw it beforehand.

The initiative would impose a one-time tax of up to 5% on taxpayers and trusts with assets valued at more than $1 billion, with some exceptions, such as property. The levy could be paid over five years. Ninety percent of the revenue would fund healthcare programs, and the remaining funds would be spent on food assistance and education programs. The proposal would cost the state’s richest residents about $100 billion if a majority of voters support it.

Opponents of the measure say the proposal is an ineffective attempt to address the long-term effects of the healthcare cuts and would destroy California’s economy and budget.

The state budget in California is already largely dependent on income taxes paid by its highest earners. Because of that, revenues are prone to volatility, hinging on capital gains from investments, bonuses to executives and windfalls from new stock offerings, and are notoriously difficult for the state to predict.

The proposal already triggered a fierce debate, accentuating the divide between the rich and poor in a state that’s expensive to live in.

The Service Employees International Union-United Healthcare Workers West and other supporters of the billionaire tax say that it would raise $100 billion, offsetting federal funding cuts to healthcare as well as funding education and state food assistance.

But supporters face strong opposition from billionaires with deep pockets. Tech executives and other business leaders oppose the idea and have threatened to move to other states. Opponents say taxing billionaires would harm California’s economy while not addressing underlying financial issues.

The proposal also has divided politicians within the Democratic Party. California Gov. Gavin Newsom spoke out against the billionaire tax, expressing fears that billionaires would move out of the state. But U.S. lawmakers such as California Rep. Ro Khanna and Vermont Sen. Bernie Sanders have backed a billionaire tax, saying the rich should pay their fair share to fund essential services.

Business executives have already poured millions of dollars into groups that oppose the billionaire tax or are promoting alternative solutions to wealth inequality.

Tech executives, venture capitalists and business leaders have donated roughly $118 million to a nonprofit called Building a Better California, according to data on the secretary of state’s website. Most of the funding comes from Google co-founder Sergey Brin, who has given more than $82 million to the group. Executives from DoorDash, Ripple, Stripe and other companies also have contributed.

The group says it supports policies such as expanding access to affordable housing, protecting innovation, requiring government transparency and securing more stable education funding.

PayPal and Palantir co-founder Peter Thiel has contributed $3 million to the California Business Roundtable, which opposes the tax. Former Google Chief Executive Eric Schmidt donated $1 million to that group as well.

California would probably collect tens of billions of dollars from the wealth tax if it passed, but it could also lose other tax revenue, a December letter from the state legislative analyst’s office said. The office also mentioned that it’s tough to predict the exact amount the state would collect because of factors that can affect a billionaire’s wealth such as fluctuating stock prices.

California billionaires who were residents of the state as of Jan. 1 would be affected by the ballot measure if it passes. Some wealthy residents announced plans to moves out of state. On Dec. 31, venture capitalist David Sacks announced that he was opening an office in Austin, Texas, the same day Thiel publicized his firm had opened a new office in Miami.

Brent crude drops as much as 1.6 percent, while key stock indices in Japan, South Korea and Taiwan climb.

Oil prices have dropped following the United States and Iran’s signing of an interim peace agreement, resuming a slide interrupted by US President Donald Trump’s warning that he could restart his military campaign.

Brent crude fell as much as 1.6 percent on Thursday morning in Asia, returning the international benchmark to almost exactly where it was 24 hours previously.

Brent futures for delivery in August stood at $78.23 as of 04:00 GMT, only about 7 percent higher than before the US and Israel launched their war on Iran on February 28.

After several days of declines, Brent briefly spiked above $81 a barrel on Wednesday after Trump warned that the US could “go right back to dropping bombs” on Iran if it doesn’t “behave”.

Asian stock markets rallied on Thursday on renewed optimism for an end to nearly four months of disruption to global energy supply chains.

Japan’s benchmark Nikkei 225 and South Korea’s Kospi both hit all-time highs, gaining 1.8 percent and 1.4 percent, respectively.

Taiwan’s Taiex rose as much as 1.3 percent.

Hong Kong’s Hang Seng Index bucked the trend, dropping 1.7 percent.

US stock futures, which are traded outside of regular market hours and often foreshadow the next day’s performance, climbed, with those tied to the benchmark S&P 500 and the tech-heavy Nasdaq Composite climbing about 0.8 percent and 1.3 percent, respectively.

Pakistani Prime Minister Shehbaz Sharif, who mediated the negotiations between Washington and Tehran, said on Wednesday that the US-Iran memorandum of understanding (MoU) had entered into force with “immediate effect”.

Sharif said Iran would “instantly reopen” the Strait of Hormuz and the US would “immediately” lift its naval blockade of Iranian ports, though it was not immediately clear if the announcement had any effect on boosting maritime traffic in the critical waterway.

Shipping in the strait has been reduced to a fraction of peacetime levels due to the threat of Iranian missiles, drones and mines, as well as the US blockade.

While more than 500 vessels are estimated to be waiting to exit the Gulf through the strait, shipping companies have expressed concern about the lack of clarity on how to ensure the safety of their vessels and crews in the channel.

In a statement earlier this week, the Baltic and International Maritime Council (BIMCO), one of the world’s largest associations for shipowners, said the US and Iran had yet to provide information about “key aspects such as timings and safe routes”.

“Due to lack of details and a history of overly optimistic reassurances, we believe the security situation for the shipping industry remains volatile, and we still consider it very risky for ships to commence transits at this point,” Jakob Larsen, chief safety and security officer at BIMCO, said in a statement on Monday, responding to the initial announcement of the MoU.

“We advise shipowners to continue doing thorough risk assessments and appeal to all parties to put the safety of seafarers first.”

Brent crude drops to lowest price since early March before signing of framework deal to end US-Israel war on Iran.

Oil prices are continuing to drop, as hopes rise for a return to stability in global energy markets before the signing of a framework agreement on ending the United States-Israel war on Iran.

Futures for Brent crude due for delivery in August dipped nearly 1 percent on Wednesday, extending declines of about 5 percent on each of the previous two days.

The international benchmark stood at $78.24 a barrel as of 08:00 GMT, the lowest price since March 3, three days after the start of the war.

After rising more than 50 percent during the conflict, the price of crude on Wednesday afternoon in Asia was only about 7 percent higher than before the US and Israel launched attacks on Iran on February 28.

“The immediate prognosis, it seems, is optimistic and assumes no significant setbacks,” Tamas Varga, an analyst at PVM Oil Associates in London, said in a commentary.

“Over the last four trading sessions, Brent, for example, has fallen by $17 [per barrel], a discernible vote of confidence that the worst, at least as far as supply disruptions are concerned, is behind us,” Varga said.

Vandana Hari, the founder of the Singapore-based oil market analysis provider Vanda Insights, said that while the announcement of the US and Iran’s memorandum of understanding (MoU) has brought relief to markets, the “hardest part, on delivering the pledges and promises, is yet to come”.

“Crude’s slide is entirely sentiment-driven,” Hari told Al Jazeera.

“The market is front-running the prospective reopening of the Strait of Hormuz and likely pricing in the best-case scenario for the normalisation of flows, which means the potential hiccups from logistics to renewed geopolitical tensions are not being adequately factored in,” Hari said.

While many details of the MoU due to be signed on Friday remain unclear, Iran is expected to end its near-total closure of the Strait of Hormuz in exchange for the US lifting its blockade of Iranian ports, among other concessions.

The full reopening of the strait would be a crucial step towards restoring confidence in energy supply chains, after nearly four months of turmoil arising from the war.

Maritime traffic in the strait, which flows between Iran and Oman, has been reduced to a trickle due to the threat of Iranian missiles, drones and mines, reducing the global oil supply by an estimated 14 million barrels each day.

Even if the war does end, global energy flows are expected to take months to fully recover.

More than 500 vessels are estimated to be waiting to exit the Gulf through the strait, while the process of ensuring the channel is free of naval mines is likely to take weeks at a minimum.

Stephen Cotton, the general-secretary of the International Transport Workers’ Federation, said the signing ceremony scheduled to take place in Geneva, Switzerland, would be “at best the beginning” of a process of normalisation.

“The backlog of stranded vessels and the need for crew changes and rest mean a realistic return to normal shipping patterns is weeks, if not months, away,” Cotton said in a statement on Monday.

US Department of Justice claims NAACP lawsuit threatens ‘national, economic, and energy security’.

The United States government has intervened on the side of Elon Musk’s xAI in a legal dispute over a $20bn data centre, claiming that efforts to block a related power project threaten national security.

In a court motion filed this week, the Department of Justice requested the dismissal of a lawsuit accusing xAI of illegally operating dozens of natural gas turbines erected to power the Colossus 2 data center in Memphis, Tennessee.

The National Association for the Advancement of Colored People (NAACP), the largest civil rights group for African Americans, filed the lawsuit in April under the 1963 Clean Air Act, which allows citizens to seek injunctions and civil penalties against alleged polluters.

The NAACP alleges that xAI built the turbines, located in nearby Southaven, Mississippi, without obtaining the necessary permits, exposing hundreds of thousands of residents to harmful pollutants linked to “increases in asthma, respiratory diseases, heart problems, and certain cancers”.

The lawsuit notes that a “much larger share” of residents are Black compared with the US general population.

In its motion, filed in a US District Court on Monday, the Justice Department accused the NAACP of threatening “national, economic, and energy security by seeking to shut off the power supply for artificial intelligence innovation that supports the Department of War’s military operations”.

The motion also claims that the US Constitution vests the power to seek civil penalties “conclusively and preclusively” in the executive branch, including the “discretion to decide when such an enforcement action is unwarranted or inconsistent with federal enforcement priorities”.

Adam Gustafson, the top prosecutor at the Justice Department’s environment and natural resources division, said in a statement that the government would “not sit idly by while private organisations use environmental laws to undermine our national security”.

xAI, which is a subsidiary of Musk’s SpaceX, did not immediately respond to a request for comment.

Earthjustice, an advocacy group representing the NAACP in the lawsuit, condemned the intervention as a “massive power grab” by President Donald Trump’s administration.

“Trump’s Justice Department wants to shield Elon Musk’s data center company, xAI, from being held accountable for its illegal pollution – and it’s attempting to grab power from impacted communities, the courts, and Congress to do so,” Laura Thoms, director of enforcement for Earthjustice, said in a statement.

“There is no moral or legal precedent for this.”

Ann Carlson, a professor of environmental law at  UCLA School of Law, described the Trump administration’s argument as a “brazen attempt” to limit enforcement of the Clean Air Act.

“It’s based on a radical notion that the executive branch can dismiss lawsuits brought by citizen groups that Congress has authorised based on no rationale at all,” Carlson told Al Jazeera, adding that the Justice Department’s position would let “polluters off the hook even for blatant violations of the law.”

“This motion is also just one of many ways in which the administration is undermining efforts to protect air quality,” Carlson said.

The Trump administration has cultivated close ties with Musk, the world’s richest man, tapping the tech titan as a temporary cost-cutting tsar and using xAI’s flagship model Grok in the Pentagon’s drive to become an “AI-enabled fighting force”.

In testimony in support of Monday’s motion, Cameron Stanley, the Pentagon’s top official for AI, said that Grok had been used to launch more than 2,000 munitions at 2,000 targets within the first 96 hours of the US-Israel war on Iran.

If Grok cannot be deployed and upgraded due to “limitations in energy supply or limited reserve compute capability”, numerous tools used by the Pentagon would be “severely impacted”, Stanley said in a declaration made under oath.

WASHINGTON — Ever since Kevin Warsh was nominated by President Trump in late January to lead the Federal Reserve, a question has lingered: Will he seek to raise interest rates to tame inflation or cut them as Trump has long demanded?

On Wednesday, Warsh may provide the first hints of an answer when he oversees his first Fed policy meeting as chair and holds a news conference afterward. Bond markets, which can swing sharply on a chair’s pronouncements, will be watching particularly closely for any signs of which way he leans.

“We expect the press conference to be pivotal,” Jonathan Pingle, an economist at investment bank UBS, wrote in a note. “This will be Kevin Warsh’s first public appearance as Chair. … We do not really know what his policy views are.”

Economists say Warsh will likely aim for a neutral approach, largely because he is taking over the Fed at a challenging time. Rising inflation has made it all but impossible for the Fed to cut interest rates anytime soon, which could stimulate growth and further raise prices. Hiring has improved noticeably since the beginning of the year, removing another key rationale for rate cuts. And the other 11 policymakers on the Fed’s rate-setting committee — including Warsh’s predecessor, former chair Jerome Powell — are split on whether an increase in the Fed’s key rate will be needed or if it can stay unchanged.

High inflation puts Fed in tough spot

Oil prices have fallen sharply on news that the U.S. and Iran have reached an initial deal to end their war, which could eventually cool inflation. Yet it’s unclear whether a permanent agreement can be reached.

“The right thing to do now is wait and see,” said William English, an economist at the Yale School of Management and a former top Fed economist.

Inflation has jumped to a three-year high of 4.2%, the government said last week, mostly because of higher gas prices. Even Trump has backed off a bit from his relentless demands for lower rates, and instead has argued that rate hikes — which the Fed undertakes to cool the economy and slow inflation — aren’t necessary.

In an interview earlier this month on NBC’s “Meet the Press,” Trump said, “Kevin is fantastic and I want him to do whatever he wants,” but added, “there’s no reason to raise rates.”

On Wednesday, the Fed is widely expected to keep its key rate at about 3.6%, where it has remained since last December. When the Fed reduces its rate, over time it can lower other borrowing costs for things like mortgages, auto loans, and business loans.

Changes likely to dash hopes for those seeking lower rates

Still, some changes are expected, which will disappoint those hoping for lower borrowing costs: The Fed is likely to drop language that suggests its next move will be a rate cut, and instead adopt wording that is more neutral. Several Fed policymakers in recent weeks have said that the Fed’s most likely next move is a hike, rather than a cut.

The central bank is also scheduled to release its quarterly economic projections, which include forecasts for how the Fed’s key rate will change over the next three years, on Wednesday. In March, those projections suggested the Fed would cut its rate once this year. Yet on Wednesday they will likely show no change in 2026, with maybe one or two cuts next year, economists say.

Warsh has criticized the projections for providing too much “forward guidance” to financial markets and leading Fed officials to stand by their forecasts for too long, even as the economy changes. Fed watchers will look closely to see if Warsh participates in the quarterly projections. If he doesn’t submit his own forecasts, it could be a sign he will seek to get rid of them entirely in the coming months.

Warsh to bring a new approach to Fed leadership

Outside of policy, Warsh is expected to bring a different style to the Fed than Powell, according to people who’ve worked with him. He wants Fed policymakers to give fewer speeches, have more debates behind closed doors and will likely avoid commenting on the daily ups and downs of the economy. Powell was relatively plainspoken and straightforward, while Warsh has suggested he sees the famously oracular Alan Greenspan, the Fed’s chair from 1987 to 2005, as a model.

“He’s just going to say less, because he doesn’t find that stuff very helpful,” said Robert Tetlow, a former senior policy adviser at the Fed.

Randall Kroszner, an economist at the University of Chicago who served on the Fed’s governing board from 2006 to 2009, when Warsh was also a governor, said the new chair would likely focus on bigger-picture questions, such as how AI will impact the economy. He will avoid thornier issues, such as whether tariffs raise inflation, which Powell was willing to address.

By avoiding such hot-button issues, the Fed could attract less negative attention from the White House, Kroszner said.

“He’s going to stay away from those,” Kroszner added. “If the Fed is to maintain its independence, it needs to maintain its focus.”

While seeking Trump’s nomination, Warsh called for “regime change” at the Fed and criticized the central bank for not preventing the 2021-22 inflation surge, when prices jumped 9.1% in a year, the biggest spike in four decades.

Yet Kroszner said Warsh will likely to seek to build consensus around changing things like the Fed’s communications policies, rather than imposing them. So far, former Fed officials say he hasn’t sought to fire top staff.

“He’s not there to break things,” Kroszner said.

During his Senate confirmation hearing in April, Warsh said he would focus on quelling inflation.

“Inflation is a choice, and the Fed must take responsibility for it,” he said then.

If he acts on that sentiment by keeping rates unchanged — or even raising them — Trump could end up disappointed in another Fed chair. He often threatened to fire Powell, whom he also appointed, for not cutting rates deeply enough.

“There’s at least a risk here that six months down the road, Trump is fulminating about how he didn’t get what he wanted from Warsh, and he’d like to fire Warsh,” English said.

Rugaber writes for The Associated Press.

BEIRUT, Lebanon, June 16 (UPI) — Lebanon’s economy, shattered by the 2019 financial collapse, has suffered another major shock from the Israel-Hezbollah war, which has disrupted recent recovery efforts and hit the tourism sector — the country’s main revenue generator — particularly hard.

The war, which began in October 2023 when Hezbollah opened a support front for Gaza, escalated as Israel intensified its attacks and the Iran-backed regime resumed fighting in solidarity with Iran last March after 15 months of inactivity. It further deepened Lebanon’s economic crisis and left the country grappling with its repercussions.

Direct and indirect losses are initially estimated at $20-30 billion, reflecting extensive destruction and mass displacement caused by the conflict, along with severe disruptions to economic activity. Inflationary pressures have also intensified due to the closure of the Strait of Hormuz.

Nearly every sector of the economy has been affected.

The escalation in March dramatically expanded the scale of destruction, with more than 70 villages in southern Lebanon reduced to ruins by advancing Israeli troops. Entire neighborhoods were leveled, while businesses, public infrastructure, schools, hospitals, and roads suffered extensive damage.

Beirut’s southern suburbs and parts of the Bekaa Valley in eastern Lebanon were also heavily targeted by Israeli airstrikes, resulting in similar devastation.

Beyond the heavy casualty toll of 3,826 killed and 11,851 injured since March 2, the widespread physical destruction, and the displacement of 1.2 million people forced to flee their homes and villages under Israeli evacuation orders, the war has also resulted in significant indirect losses.

Unemployment rose as job losses mounted, while recession and inflation eroded household purchasing power, making people poorer.

The tourism sector was also badly hit, and the economy is expected to contract by between 7% and 10% in 2026 if the war continues, according to estimates by Finance Minister Yassine Jaber.

More critically, the recent escalation came as the reform-minded government of Prime Minister Nawaf Salam had begun putting the country on a path to recovery, and the economy was starting to pick up.

Despite the war — largely concentrated in southern Lebanon at that time — 2025 ended on a positive note, with the World Bank reporting modest GDP growth of 3.5 percent and a rebound in tourism.

A key highlight was a visit by Pope Leo XIV, which raised hopes and called for peace, alongside approximately 1.63 million visitors; an increase of 44.6% compared with the previous year.

“That showed that demand for Lebanon was returning… The escalation in March interrupted that momentum,” Tourism Minister Laura Khazen Lahoud told UPI.

Lahoud explained that the collapse became visible in cancellations, empty restaurants, very low hotel occupancy, and travel agencies shifting from selling trips to managing cancellations.

According to figures released by the relevant syndicates, travel and tourism activity declined by around 80%, while hotel occupancy in Beirut fell to roughly 7-10%, occasionally reaching 12%.

Tourism activity became concentrated in “a very small number of spots,” where hotels sought to attract displaced people seeking refuge in safer areas, according to Lahoud.

Charles Arbid, President of Lebanese Economic Social and Environmental Council, explained that the country was in “a state of stagflation,” with little economic activity or production, inflation reaching 20%, and businesses closing down or partially operating.

“This is a catastrophic economic situation, following a prolonged period of weak growth and the accumulation of structural economic problems,” Arbid said in an interview with UPI, referring to the drop in government revenues due to the inability to pay taxes and the complete halt of economic activity in southern Lebanon.

He was particularly concerned about the impact of the war on the population, as many were losing their jobs and depleting their remaining savings to cope with the spiraling inflation.

He said Lebanon is facing “a social and societal crisis,” exacerbated by the massive displacement, and would need a “Marshall Plan” for reconstruction, rehabilitation of its crumbling infrastructure, securing the return of the displaced to their villages, and supporting economic recovery.

In the meantime, many are struggling to keep their businesses afloat and secure an income.

Mohammad Farid, who has been displaced three times with his wife and son from their home in Beirut’s southern suburbs since 2024, has not given up despite suffering heavy losses: $250,000 after an Israeli strike destroyed a solar panel project he had co-partnered in the village of Ansar in southern Lebanon, and about $100,000 from two shops badly damaged in Israeli strikes in Beirut’s southern suburbs.

Farid and his wife, Malak, had started a new business, Oilganic, specializing in cold-pressed organic oils shortly before the 2023 war erupted, importing oil press machines from China and renting their first shop.

Their business began to flourish, expanding into online sales and building a strong reputation.

“That came to a halt when the war extended to our area, forcing us to leave and then return after a truce was reached, rent a new shop, and see it destroyed again months later,” Farid told UPI.

They were again displaced, taking refuge at their friends’ house in the mountains, where they resumed production on a smaller scale using small oil-press machines.

“We are doing our best so as not to lose our clients,” Farid said, determined to grow his business and relocate to his native border village of Naqoura in southern Lebanon after the war ends. “I want to go back to the south, rebuild our house, and continue my oil business there. This is our land, and we will never give it up.”

A glimmer of hope for ending the longest and most devastating war between Israel and Hezbollah emerged after the United States and Iran reached a memorandum of understanding, which was due to be signed in Geneva on Friday.

The agreement includes a full ceasefire in Lebanon, which has not yet been fully observed by either side.

A cessation of hostilities, or even a durable de-escalation, could bring much-needed relief, starting with salvaging part of the summer tourism season, largely relying on Lebanese expatriates and the diaspora.

Lahoud said the diaspora would help sustain the sector but noted that a very large segment of the diaspora, whether in West Africa or northern Europe, originates from southern Lebanon and would be less likely to visit this year.

She explained that the tourism sector has survived repeated shocks, but emphasized that “businesses cannot absorb losses indefinitely,” with hotels, restaurants, travel agencies, transport companies, event organizers, and seasonal workers remaining under real pressure.

As the region is being reshaped by major developments, Lebanon is looking to close the chapter of war and move into a period of peace, engaging in U.S.-mediated direct negotiations with Israel for the first time.

Arbid appeared confident that Lebanon “is heading into a better phase,” one that would require a new political understanding and security stability.

“That would pave the way for reconstruction and recovery… It will be a long journey, but we will make it in the end,” he said.

Benchmark S&P 500 rises 1.7 percent, while tech-heavy Nasdaq jumps 3.1 percent.

US stocks have rallied on hopes that the tentative deal to end the US-Israel war on Iran will restore stability to energy supply chains roiled by months of disruption in the Strait of Hormuz.

The S&P 500 rose 1.7 percent on Monday, taking the benchmark index within touching distance of its all-time high.

The tech-focused Nasdaq Composite jumped 3.1 percent, aided by a 19.6 percent gain by SpaceX, which on Friday made the biggest market debut in history and minted the world’s first trillionaire in Elon Musk.

The blue-chip Dow Jones Industrial Average climbed 0.9 percent, closing at a record high.

Brent crude futures, the primary benchmark for global oil prices, fell nearly 5 percent to just above $83 a barrel, the lowest price since the first week of the conflict.

Asian stock markets were largely flat on Monday morning, after surging the previous day on the back of US President Donald Trump’s announcement of his deal with Tehran.

As of 01:30 GMT, Japan’s benchmark Nikkei 225 was 0.01 percent lower, while South Korea’s Kospi, the best-performing major index this year, was down 0.06 percent.

In Taiwan, the TAIEX was up 0.2 percent.

Hong Kong’s Hang Seng Index was down 0.07 percent.

Jay Goldberg, a senior analyst for tech-related equities at the Chicago-based Seaport Research Partners, said the announcement of the US-Iran deal had tilted investors’ risk balancing act towards buying into the market.

“To oversimplify, the debate has been: AI spending is strong, but there’s a war going on,” Goldberg told Al Jazeera.

“The war is over, it seems, so that side of the argument falls away. Investors are now feeling better about taking on more risk,” Goldberg said.

While Washington and Tehran’s framework has raised hopes for a return to stability in global energy markets, it is expected to take months before energy flows fully return to normal, due to the massive backlog of vessels around the Strait of Hormuz and the need to ensure the waterway is safe from Iranian naval mines.

According to the International Shipping Chamber, about 500 ships are still waiting to pass through the strait, which normally carries about one-fifth of global supplies of oil and liquefied natural gas.