Oil and Gas

IRGC commander says oil flows through US-supervised route in Hormuz are ‘negligible’.

Crude oil exports from the Middle East have risen above pre-war levels on four of the seven days in the last week of September, provisional data from ship-tracking firm Kpler showed.

However, senior Islamic Revolutionary Guard Corps (IRGC) commander Ali Fadavi said in a televised interview on Sunday night that only three to four million barrels of oil per day (bpd) are now moving through the route, dismissing the amount as “negligible” when compared with pre-war traffic.

Fadavi said, for the first time, no US vessels were present in the Gulf, the Strait of Hormuz, the Sea of Oman or even the northern Indian Ocean and US warships are “100 percent vulnerable” to IRGC attacks.

Kpler data showed crude exports from the region exceeded pre-war levels on September 24 and between September 27 and 29, rising to 19.5-22.5 million bpd.

Around that time, Iran claimed success in attacking ships – including US Navy vessels – near the Strait of Hormuz, saying the strikes had forced Washington to move its warships further from the Iranian coast.

Before the US-Israel war on Iran began, exports averaged 18 million bpd between March 2025 and February 2026.

According to Kpler data, the overall tally for crude, oil products, chemicals and non-gas liquids averaged 22.4 million bpd in the seven days to September 30.

On October 1, the seven-day moving average for crude exports was at 18.5 million bpd. This includes transits via the Strait of Hormuz, the Red Sea, exports from terminals and ship-to-ship transfers in the Gulf of Oman.

The number of liquefied natural gas cargoes exiting the Strait of Hormuz also rose in September to its highest monthly level since February.

The figures exclude any vessels that might have crossed the strait with their automatic identification system transponders turned off to avoid detection.

The United Kingdom Maritime Trade Operations agency reported at least one attack a day in the Strait of Hormuz or in the Gulf of Aden since October 2.

On Sunday, Iran’s top negotiator and parliament speaker, Mohammad Bagher Ghalibaf, said the Strait of Hormuz would remain closed until the United States accepts Tehran’s seven-day plan to reopen the waterway.

United States President Donald Trump has said Europe has agreed to release a “massive amount” of their diesel stockpile, although no European parties have confirmed the claim.

Trump made the statement on his Truth Social account on Friday as he has heaped pressure on European countries to release diesel stockpiles to ease soaring prices caused by the US-Israel war with Iran and the resulting constriction of traffic via the Strait of Hormuz.

Trump had previously floated banning US diesel exports if European countries did not comply. The European Union had earlier on Friday said it “fully rejects” the threat.

More to come…

Carney declared the pipeline a project of national interest, smoothening its way to a single federal regulatory review process.

Canada will fast track the approval process for a new proposed crude oil export pipeline to its west coast that could generate billions in revenue and boost economic growth, Prime Minister Mark Carney has said.

Carney made the announcement on Thursday to fast-track the pipeline, which is a crucial part of his bid to diversify the economy away from the United States and help lessen the effect of US President Donald Trump’s tariffs.

Carney said Ottawa is officially listing the Pacific Link pipeline, which had been announced in July, as a project of national interest. That will ensure it proceeds through a single federal regulatory review process. He said Ottawa aimed to complete the process by September 1, 2027.

“A pipeline to the west coast is part of our mission to transform our economy, to double our non-US exports over the next decade … [and] to unlock our full potential as a global energy superpower,” he told reporters in Fort McMurray, hub of Alberta’s tar sands industry.

Ottawa says the 1 million barrel a day project would create 140,000 jobs and generate more than 20 billion Canadian dollars ($14bn) in gross domestic product (GDP) per year and 100 billion Canadian dollars ($70bn) in government revenue by 2060.

Canada currently has just one east-west oil export pipeline in Canada, the 890,000-barrel-per-day Trans Mountain pipeline. An expansion of that pipeline was completed in 2024, but it is already running at capacity.

For years, Canada has sent more than 90 percent of its crude oil exports to the US via pipeline. A new oil export pipeline could make Canada a major global energy supplier, as Asia’s top importers seek oil from outside the Middle East in the wake of the Iran conflict.

Filling the pipeline, however, would require new tar sands expansions of the type no company has undertaken in more than a decade.

The pipeline will be built by government-owned Trans Mountain Corp in coordination with Pembina Pipeline Corp. Alberta estimates it could cost between 35.2 billion Canadian dollars and 43.7 billion Canadian dollars ($24.7bn – $30.7bn).

The majority owners will be the federal government and the government of Alberta. Indigenous communities will be offered a minimum of 10 percent ownership interest.

Previous oil pipeline projects in Canada have faced strong opposition from environmentalists and Indigenous groups, resulting in the cancellation of some projects and leading to cost overruns and construction delays with others.

Alberta separatism

Carney made the announcement alongside Alberta Premier Danielle Smith in Fort McMurray in the heart of Canada’s tar sands, a move meant to mend relations with oil-rich Alberta as separatists push for a referendum on leaving Canada.

Alberta is holding a public vote on October 19 on whether to hold a referendum on leaving Canada. Smith has long complained that Carney’s predecessor, Justin Trudeau, hindered Alberta’s energy industry and fuelled separatist sentiment.

Smith said she would vote to keep Alberta in Canada and called the roughly 22 percent support for separation in a recent poll “still too high for my liking”.

“I don’t like the fact that many of our fellow citizens have given up on Canada,” Smith said, adding that the pipeline was an example of how “cooperative federalism can work in action”.

Asked what message Albertans considering separation should take from the announcement, Carney said it demonstrated that “Canada is working” and showed what the country could achieve by acting together.

The deaths appear to be the first at the hands of Somali pirates in more than a decade.

Pirates have killed five crew members on board a Palau-flagged oil tanker off the coast of Somalia before security forces rescued the ship, according to Somali authorities.

The deaths on the tanker, the MT Honour 25, were announced on Tuesday.

They appear to be the first deaths at ⁠the hands of Somali pirates in more than a decade and come amid a resurgence of Somali piracy that experts have attributed in part to the effects of the United States and Israel’s war on Iran.

The MT Honour 25, which authorities said was carrying 18,500 barrels of oil, was seized by pirates off Somalia on April 21.

The Information Ministry of Puntland, a semiautonomous region of Somalia, said in a statement that a rescue mission had freed the ship and captured 16 suspected pirates.

“Before the operation began, the pirates on board the ship killed five of the crew,” the statement said. “Among those killed were three from Pakistan, one from Myanmar and one from India.”

Four other crew members, three Pakistanis and one Indian, were injured, it said.

In a post on social media, the Puntland Maritime Police Force said the vessel was “safe” and under the government’s control. It said efforts were continuing to find others involved in the hijacking.

The rescue follows another operation last week in which the maritime police freed the Sibu 1, a tanker sanctioned by the US that Somali pirates had hijacked in August.

But 28 of the 41 pirates arrested in that operation later escaped while being transferred to jail, and several Puntland security officials accused local police of complicity.

At least 15 attacks have been reported off Somalia since April, according to officials.

A previous wave of piracy, from 2008 to 2014, disrupted one of the world’s busiest shipping routes, cost the global economy billions of dollars and resulted in hundreds of millions of dollars in ransom payments.

Indirect talks between the United States and Iran aimed at ending the seven-month-long war continue – most recently via Qatar as mediator on the sidelines of the United Nations General Assembly (UNGA) in New York – but the two sides still disagree about the agenda.

Iranian Foreign Minister Abbas Araghchi left New York on Tuesday after telling state-run Islamic Republic of Iran Broadcasting (IRIB) that he expects an official response to Tehran’s proposal to reopen the Strait of Hormuz by the end of the day. The proposal, which Iran said would see the strait reopened within seven days, was first passed to the US via Qatari mediators last week.

United States President Donald Trump was reported to have rejected that offer, under which Tehran would reopen the strait in return for Washington lifting its naval blockade, waiving sanctions, releasing an estimated $12bn in frozen Iranian assets and enforcing a wider regional ceasefire that includes Lebanon.

Under Iran’s proposal, wider peace talks, including discussions of its nuclear programme, would begin only then

Despite Trump’s public rejection, Araghchi says he has not yet received a formal response from Washington. Meanwhile, US media reports that Trump may well be willing to relax sanctions and unfreeze Iranian assets have been strongly denied by the US president.

Instead, US officials say, the US wants a deal that resolves all outstanding issues, particularly Tehran’s nuclear programme, in one go, rather than pursuing a gradual, step-by-step approach.

Here’s what we know about the talks:

Qatari mediators met Araghchi in New York on Monday to discuss how to advance Tehran’s proposal for reopening the Strait of Hormuz and then progressing to wider peace talks.

In a post on Telegram, Araghchi insisted that the talks focused solely on the Strait of Hormuz. He denied that the US had formally rejected the Iranian proposal.

“Despite what the US president said, I said that we were waiting for the official US response through the mediators … They [Qatar] had ideas, and we discussed them. They are going to raise this issue with the American side again, and then the final response from the American side will be conveyed to us through the Qatari mediator,” Araghchi said late on Monday.

Araghchi also said negotiations had become more “serious”, but cautioned that Tehran’s position has not changed.

“I state firmly that there has been no change in Iran’s position. Our conditions for opening the strait are clear. Our position on other issues is also clear. At present, there has been no discussion at all about flexibility,” he added.

Tehran’s proposal includes elements of the Islamabad memorandum of understanding (MoU), which was signed by both the US and Iran on June 17.

Is Trump willing to accept some Iranian demands?

A US official told The Associated Press news agency last week that Trump is not willing to make a final peace deal with Iran until the issue of its nuclear programme is addressed. According to the official, who has not been named, the US president would be willing, however, to grant Iran sanctions relief and release some frozen funds if progress is made on the nuclear file.

Then, on Monday, US-based news outlet Axios also reported that Trump had offered Iran sanctions relief in return for concessions on its nuclear programme. The report also cited US officials, one of whom told Axios that the indirect talks had been “positive and constructive”, adding that Tehran had indicated it was “flexible” on nuclear issues.

Trump, however, angrily denounced the story as a “hoax” in a post on Truth Social, the social media platform he owns. He said the story was “not true” and demanded Axios remove the article.

Iran has been heavily sanctioned for decades. The restrictions have severely affected Iranians’ quality of life, including their access to essential medicines and healthcare.

In August, the US announced yet more sweeping economic sanctions on Iran and countries that trade with it as it sought to apply more economic pressure to isolate the country from the global economy during the diplomatic deadlock in their war.

US Treasury Secretary Scott Bessent described the campaign as the “economic asphyxiation” of Iran.

It is difficult to quantify exactly how many Iranians have been killed by what Tehran views as “economic warfare”. However, a study published last year by the highly regarded medical journal The Lancet Global Health concluded that more than 564,250 people worldwide die annually as a result of US sanctions.

What does the US want?

In late February, just before the US launched its first strikes on Iran, the two sides were already holding talks hosted by Oman, which included the issue of Iran’s nuclear programme.

But before those talks could conclude, the US and Israel launched strikes, triggering the closure of the Strait of Hormuz, through which one-fifth of the world’s oil and natural gas is shipped in peacetime, by Iran. The closure of the strait has since become the primary point of contention between the two sides, when it had not been an issue before the war began. The strait is currently subject to blockades by both sides.

Throughout the war, Trump has repeatedly expressed his desire to strike a deal with Tehran. However, serious differences between the two sides will need to be resolved first, including the order in which issues are addressed for the purpose of peace talks.

Iran wants to establish its control of the Strait of Hormuz, have sanctions lifted and assets unfrozen, as well as ensure an end to US-Israeli strikes before it will go back to negotiating other issues, such as its nuclear programme. This was the order of events laid out in the MoU agreed between Iran and the US in June, but which quickly fell apart.

The US, however, wants everything to be on the table at the same time – it does not want to agree to anything relating to these Iranian demands before it addresses the other issues.

Scott Lucas, professor of US politics and international relations at University College Dublin, told Al Jazeera that Washington effectively wants Iran to surrender.

“The Strait of Hormuz has become a fundamental issue. The question here is, will both sides give? The memorandum of understanding clearly gave Iran a role in the management of the strait,” Lucas said.

“When the Trump administration pulled away from negotiating on the basis of the memorandum, they effectively went back to the idea of Iran having to completely allow passage through the Strait of Hormuz with no guarantees over it, in terms of not only what it means for Iran financially, but [also] in terms of Iranian security. The Iranian government is not going to agree to that, so we’re stuck in this limbo right now,” he added.

“Are the Trump folks going to come back to the talks on the basis of the memorandum of understanding or something that is a revised version of it, or are they going to try and break the government with economic warfare until at least after the US elections in November? That’s where we are right now.”

What does Iran want?

After half a century of bitter enmity with Washington, Iran wants to consolidate what it sees as the strategic gains it has made during a war it did not start. This specifically includes its newly established ability to close the Strait of Hormuz, sending global energy markets into a tailspin and placing additional pressure on the Trump administration.

Since US-Israeli strikes on Iran began on February 28, Hormuz has dominated talks aimed at ending the war and emerged as Tehran’s greatest point of leverage. Prior to the conflict, Iran did not exert control over the waterway and all commercial shipping passed through freely.

For this reason, Iran will not move on to wider peace talks until it has leveraged its control of the strait to get its demands met. “Our discussion is clear. Right now, it is only about the Strait of Hormuz,” Araghchi said late on Monday.

“The opening of the Strait of Hormuz is also subject to the fulfilment of a series of conditions that we announced to the other side.”

Ali Salehian, director of the Center for Intellectual Diplomacy at the Governance and Policy Think Tank in Iran, told Al Jazeera that Tehran does not believe Washington will honour any future deal as it did not honour what was agreed under the Pakistan-brokered June MoU.

“For Iran, the bottom line of every negotiation with Trump, considering all of his misbehaving and [military] targeting of Iran during negotiations, is the Islamabad MoU,” Salehian said.

“Tehran thinks that if the US doesn’t fulfil its commitments based on the MoU, there is no guarantee that any kind of future deal would be sustainable.”

What is likely to happen next?

It does not look likely that the diplomatic standoff will be eased anytime soon, analysts say.

Both the US and Iran have indicated throughout the war that they would prefer a diplomatic settlement to a continuation of the war. However, Trump has continued to threaten Iran with more strikes if it does not agree to a deal, and Araghchi told US news outlet NBC on Sunday that Tehran is also prepared to resume fighting, even though it has not abandoned diplomacy.

“We are fully prepared for the time for the war to be resumed, and I repeat, we stand firm in the face of any new aggression, even if it comes to a doomsday war,” he said.

Trump said last week that he expects a deal will be reached, but not until after the US midterms on November 3.

“For the moment, the Trump administration is going to try to make the Iranian government capitulate through economic warfare,” Lucas said.

However, a deep sense of distrust remains between the two sides. Senior Iranian officials believe Trump will restart the war after the midterms on a far greater scale and that Israel would also participate.

If that theory proves true, Tehran may well prefer the fighting to resume before November’s elections, as it would allow Iran to impose a greater cost on Trump.

“The reaction of the Iranians to that might be to actually trigger the war themselves, early, right before the midterm elections in order to maximise the pain that [it] will impose on the US president,” Trita Parsi, executive vice president of the US-based Quincy Institute for Responsible Statecraft, told Al Jazeera earlier this month.

Gold hits seven-week low; silver follows suit and records a nearly 5 percent loss.

Gold prices are falling as concerns of rising fuel prices stoke inflation worries on the back of the war between the United States and Iran.

Spot gold prices fell by 3.3 percent to reach a more than seven-week low at $4,146.51 per ounce on Monday.

Rising oil prices, a higher US dollar and Treasury yields stoked inflation concerns, creating further headwinds for the metal.

This is the lowest level for gold values since August 5. US gold futures also fell by 3.3 percent to $4,178.40.

Although gold is traditionally considered an inflation hedge, higher interest rates dent ⁠its appeal as investors prefer yield-bearing assets.

“There might be no notable direct impact on regular people due to that. However, investors who had turned to gold will see a hit, especially under the current high inflation rates,” Sherif Othman, CEO of the Maryland-based Poise Investment Advisors, told Al Jazeera.

“Gold does not yield interest, so when Treasury yields go up, investors turn away from gold, impacting its value”, he added.

The Fed lifted benchmark rates by a quarter ⁠percentage point earlier this month and flagged that at least one more hike is likely in the coming months.

The US dollar was steady near a two-month high, and oil prices spiked about 3 percent as US President Donald Trump rejected an Iranian offer ⁠to resolve the conflict and reopen the Strait of Hormuz.

Such factors triggered several policymakers to warn that inflation risks remain elevated and that interest rates may need to rise, with Cleveland Fed President Beth Hammack among the latest officials to reiterate that view.

Higher Treasury yields and the US dollar are “creating a perfect storm to push the metals prices sharply lower,” according to Jim Wyckoff, a market analyst at American Gold Exchange.

Spot silver also fell by 4.7 percent to $61.27 per ounce, platinum declined 2.9 percent to $1,726.30 and palladium lost 4.4 percent to $1,211.45.

Tehran, Iran – Hours after US President Donald Trump rejected a diplomatic solution put forward by Iran to reopen the Strait of Hormuz, explosions were heard in the waterway, according to Iranian media.

Reports of blasts near southern Iran’s Qeshm Island in the Strait of Hormuz suggested that multiple antiship missiles and drones were fired at vessels transiting the waterway against Tehran’s wishes.

While Iranian authorities did not confirm any attacks in the Strait of Hormuz that day, shipping continues to be attacked in the waters, including an Indian cargo ship last week, which killed a sailor.

The Islamic Revolutionary Guard Corps (IRGC) maintains that the strait is closed to any ship that does not coordinate with Iranian authorities. On Sunday afternoon, it released video of what it said was a second US underwater drone seized this month.

Tehran has issued instructions to shipping companies transiting the Strait of Hormuz to use a temporary route approved by Iranian authorities and pay relevant fees. But it has also said the strait will not fully reopen until the US blockade on Iranian ports ends.

Iran’s Persian Gulf Strait Authority announced on Saturday that it would blacklist any shipping charterer company which orders crews to use routes it considers to be unauthorised.

It also published what it described as an apology from an unnamed shipowner blaming commercial pressure from its charterer for trying to pass through the strait.

Washington still insists that its warships are successfully guiding oil tankers out of the strait via a different route. US Energy Secretary Chris Wright told Fox News on Sunday that the “running average” of crude oil in transit was nearly 13 million barrels per day.

A September 19 operational update by US Central Command claimed that its forces had helped move more than one billion barrels of crude out of the Gulf over roughly two months.

The US military also says its forces have redirected 122 commercial vessels to enforce the naval blockade of Iran’s ports, halting all Iranian crude exports.

Tehran has claimed that the US is providing false information regarding Strait of Hormuz traffic to project control over the key waterway. Shipping has been severely disrupted since the US and Israel started their war on Iran on February 28.

Andreas Krieg, associate professor at King’s College London, said Iran’s strategy of launching maritime attacks has spread the economic costs of the conflict beyond its borders.

While Iran has suffered economically from war damages, the US naval blockade and sanctions, it would be a mistake “to assume that reaching that threshold produces submission”.

“The next Iranian move is therefore likely to be an attempt to increase the pain experienced by the Gulf rather than simply absorb further American pressure,” Krieg said.

“That could mean more aggressive vessel interdictions in Hormuz, attacks on energy infrastructure, greater Houthi pressure around Bab al-Mandeb and pressure from Iranian-aligned groups against alternative Saudi export routes. We are already seeing how pressure on Hormuz, the Red Sea and Saudi infrastructure can interact.”

More escalation on the way

At the United Nations General Assembly in New York, Iran projected a message of defiance while also proposing to reopen the Strait of Hormuz within a week if its seven conditions were met.

They included lifting the blockade on Iran, the release of frozen Iranian funds and an end to attacks on all fronts, including Israel’s assault on Lebanon. The demands mostly amounted to a return to the June memorandum of understanding between the US and Israel.

Tehran has added that reopening the strait must be undertaken through a bilateral arrangement already finalised with Oman, the only other country with territorial waters in Hormuz.

US President Donald Trump told reporters he rejected the offer, but Iran’s Foreign Minister Abbas Araghchi said on Sunday they were adamant about the conditions and would await an official response through mediators, such as Pakistan, Qatar and Oman.

Abolfazl Shekarchi, chief spokesman of the Iranian armed forces, warned that if the US further intervenes in the Strait of Hormuz, “it will get slapped”.

“The Americans have no way out other than withdrawing from the West Asia region. The sooner they leave, the fewer losses they will incur and the region will certainly become safe after that,” he said.

Iranian army spokesman Mohammad Akraminia  said conditions were deteriorating so badly for the US that it might launch another “military aggression” on Iran.

Krieg said that as the US moves to isolate Iran via sanctions, Tehran, unable to respond with mutual financial measures against Washington, will be forced to rely on continued coercion in the Strait of Hormuz.

“The most likely level remains controlled attrition rather than an immediate return to the massive air campaign of the opening months,” Krieg said.

“Over the coming weeks, I would expect further attacks or attempted attacks on tankers, US-enabled shipping and regional infrastructure, followed by limited US strikes against IRGC maritime assets, coastal missile positions, drones or vessels involved in those operations. That tit-for-tat cycle has already re-emerged around Hormuz.”

The US president said he would end a so-called ‘EV mandate’ that steered consumers to electric vehicles.

United States President Donald Trump has announced new fuel economy standards that roll back requirements adopted under his predecessor, arguing they will lower automobile prices and encourage manufacturers to expand production in the US.

In a social media post on Saturday, Trump said the new standards would “TERMINATE” what he called former US President Joe Biden’s “EV (electric vehicle) mandate”, accusing the previous administration of imposing costly requirements on carmakers and steering consumers towards electric vehicles.

“These new Standards will take the waste out of building cars in America. That means LOWER PRICES, saving families thousands on a new, beautiful, and safe car,” Trump wrote.

The changes form part of a broader Trump administration effort to reverse Biden-era policies supporting lower-emission vehicles, increasing the gap between US policy and global trends favouring electric vehicles.

While Trump and US Republicans have used the term “EV mandate” to describe higher fuel efficiency requirements instituted under Biden, a Democrat, there are no federal guidelines or laws that require Americans to buy electric cars or bar the sale of ones powered by petrol.

At the centre are Corporate Average Fuel Economy (CAFE) standards. This system, established by the US Congress in 1975, requires automakers to meet average fuel economy targets across all cars and light trucks they sell, meaning that a brand that sells an inefficient vehicle would also have to sell a more efficient one to help comply with the government’s standards.

Under rules finalised by the Biden administration in 2024, the required fleetwide fuel economy was scheduled to rise from 39.1 miles per gallon (mpg) to about 50.4mpg by 2031. The administration said then the measures would reduce fuel consumption and emissions to combat climate change while helping motorists save money at the pump.

As a result, auto manufacturers have ramped up production of EVs to help meet the Biden-imposed fuel economy requirements. The Republican-controlled US Congress, however, gutted consumer tax incentives last year for electric vehicles as part of Trump’s One Big Beautiful Bill Act.

Trump did not provide details regarding what the new fuel economy standards would be. But in December 2025, he announced a proposal that would set the industry fleetwide average for light-duty vehicles at roughly 34.5mpg by 2031, more than 30 percent lower than the Biden-era rule.

In a reposting of Trump’s announcement, US Transportation Secretary Sean Duffy said an announcement would be “COMING MONDAY”.

Al Jazeera has reached out to the White House for comment.

Diesel prices have hit record highs as the tensions between the United States and Iran, along with the war between Russia and Ukraine, disrupt key oil and fuel trade routes.

On Friday, the average price for a gallon (3.79 litres) of diesel was $6.50, up from $5.61 a month earlier, according to the American Automobile Association (AAA), which tracks fuel prices daily.

The spike has prompted the administration of US President Donald Trump and Republican lawmakers to consider restricting US diesel exports ahead of upcoming midterm elections.

A Reuters/Ipsos poll conducted in August found that 47 percent of voters said the cost of living was the single most important factor in deciding how they would vote in the midterms — more than twice the share who cited the next-most important issue, “democratic values and norms”.

A new Marist poll also found that Americans have more confidence in Democrats than Republicans to handle the economy, with 42 percent choosing Democrats compared with 34 percent for Republicans.

Amid that voter sentiment, US Energy Secretary Chris Wright said on Thursday that he was in touch with major oil refiners to gauge interest in a potential voluntary restriction on diesel exports, according to the Reuters news agency.

That followed remarks by Trump on Tuesday that he supported restricting diesel exports from the US, the world’s largest diesel exporter.

Energy analysts and industry groups have warned that an export ban could have unintended consequences, potentially pushing up fuel prices in the US and abroad.

Why are diesel prices so high?

Even though the US is the world’s largest diesel exporter, diesel is traded on a global market.

Disruptions to refineries in Russia and the Middle East have reduced the amount of fuel available worldwide, putting more pressure on US producers to fill the gap. In Russia, for example, drone attacks have damaged major refineries, forcing a cutback or halt in production.

“While US refineries are running at full tilt and higher than normal, the global gaps remain,” Rachel Ziemba, senior adjunct fellow at the Center for a New American Security, told Al Jazeera.

It comes as US diesel supplies are also shrinking. As of September 11, inventories had fallen to 107.9 million barrels, the lowest in more than four decades, according to the US Energy Information Administration.

With global supplies tightening, diesel prices have risen around the world — including in the US. Because American producers can sell their fuel into the global market, they are drawn to the soaring global prices rather than simply setting a lower price for domestic consumers.

Why is the US considering an export ban?

In Washington, DC, leaders have flirted with the idea of pushing US companies to stop or slow exporting diesel.

Republicans have been pushing for a slowdown or outright ban of exports in an effort to lower costs for consumers ahead of the pivotal midterm elections, where cost of living is becoming a critical issue.

Such a move, they hope, would reduce local diesel prices, which is significant as diesel is used in trucks to haul food and most products, Ziemba said, adding that US diesel exports are equivalent to about 40 percent of domestic consumption.

On Tuesday, Chuck Grassley, a Republican from Iowa, called on the president to put in place a temporary halt on exports.

“I encourage President Trump to put a temporary embargo on diesel exports through executive action,” Grassley said.

Republican Senator Dan Sullivan of Alaska made a similar call: “The cost of diesel is just too damn high. I’m calling for a temporary pause of American diesel exports so that we can rebuild our reserves ahead of winter,” Sullivan said in a statement on Tuesday.

In the House of Representatives, Congressman Tim Burchett of Tennessee introduced two bills that would restrict US diesel exports: One would impose a ban through January 2027, while the other would restrict exports if the national average price reaches $5 a gallon.

The administration has not made any official policy announcements, and the White House told Al Jazeera that the president is evaluating all options.

Oil and gas industry experts say that a ban could drive up prices rather than bringing them down.

“Diesel trades on a world market, just like corn. farmers don’t sell cheaper to Americans, and refiners can’t either since they buy crude at global prices. force a lower price and they’ll make less diesel. less supply means higher prices, not lower,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a post on X.

How would an export ban work?

A ban would prevent or restrict US refiners from selling diesel to buyers overseas, theoretically leaving more fuel available in the domestic market.

Analysts at Wood Mackenzie, a research and consulting firm, say that keeping more diesel stateside would ultimately fill up US storage tanks but also force refineries to cut production. That could affect other markets that rely heavily on US fuel, including Latin America and Europe, forcing them to compete with other global buyers for supplies and driving up prices for the global market.

Wood Mackenzie says China is the only major producer with enough spare refining capacity to potentially make up much of the shortfall.

“China is currently the only country with material spare refining capacity that could cover the loss of US refinery throughputs. However, China may well decide it is not in its interest to intercede,” analysts said.

Wood Mackenzie has warned that a ban could quickly fill US diesel inventories, forcing refiners to cut crude runs and potentially increasing US petrol imports.

That was also the view of an S&P Global analysis, which found that a complete ban could also mean that production would be reduced as storage capacity is filled up with unsold diesel. According to the analysis, that could lead to production cuts of as much as 750,000 barrels a day, which could put the US into being a net importer of petrol in the fourth quarter of this year.

Who would an export ban affect?

An export ban would affect US refiners and consumers, as well as countries that rely on US diesel.

“They [export bans] may provide temporary relief, but diesel is a global commodity. Treat one part of the system, and the effects travel elsewhere. Trade-offs are inevitable. Refiners are unlikely to cheer a blanket ban. Voluntary, controlled export reductions would generally be less disruptive in the short term,” Maksim Sonin, visiting scholar at Stanford University’s Precourt Institute for Energy, told Al Jazeera.

Disruptions to US exports could reduce the amount of fuel available on the global market. Wood Mackenzie analysts say countries in Europe and Latin America that rely heavily on US fuel could be forced to compete with other producers for supplies.

“If implemented, it would lead to European and Asian product prices increasing as the buyers of US fuel, mostly in Latin America, scramble to find new supplies, bidding up supplies. European crack spreads could widen, and overall we might see more disruptions,” Ziemba added.

“Given these issues, the US may opt for a mixture of carrots and sticks aiming to incentivise refineries to keep producing, perhaps including penalties if they cut production. There may be voluntary export quotas rather than a formal ban, and there may be exemptions for countries that provide crude oil to the US, like Mexico,” Ziemba said.

That could put pressure on consumers not only at the petrol pump but in the skies as well.

Airlines for America, an airline industry trade group, has also warned that an export ban could lead to higher prices for airlines and travellers, according to the Reuters news agency. The trade group did not respond to Al Jazeera’s request for comment.

The broader concern from analysts is that restricting exports could reduce US refinery production rather than simply redirecting diesel to US consumers, potentially putting upward pressure on fuel prices both domestically and internationally.

“It’s unlikely to help US consumers much given how it fails to solve underlying problems and could backfire if refineries hold on to production. The best way to address this is to end the conflicts prompting the shortages,” Ziemba said.

Iran says it has put forward a plan to the United States to reopen the Strait of Hormuz within seven days, as Qatar passes messages between the two countries at the United Nations General Assembly in New York.

Speaking on the sidelines on Thursday, Iran’s Foreign Minister Abbas Araghchi said the timetable could begin as soon as Washington accepted the proposal.

Both sides have described the indirect contact facilitated by Qatar in New York positively, but neither has indicated any diplomatic breakthrough as the war approaches its seven-month mark.

Analysts have told Al Jazeera a firm peace deal remains unlikely, with Iran still wanting to follow the approach set out in an earlier agreement, which would give it and Oman a main role in managing the strait before moving on to discussing terms for a broader peace deal.

For its part, the US, which has claimed to be “in total control” of the Strait of Hormuz, wants Iran’s nuclear programme to be the subject of discussions straight away.

Iran has previously made clear that it will not engage with broader peace talks, including addressing the issue of its nuclear programme, until the US naval blockade of its ports in and around the Hormuz strait is lifted, sanctions are repealed and the US provides a guarantee of an end to strikes, among other conditions.

Here’s what we know.

What has Iran proposed?

Araghchi told reporters in New York that Iran had presented its plan to the US through intermediaries. “If certain conditions are met, the Strait of Hormuz would be open on the end of the seventh day and [peace] talks would restart,” he said.

He did not give details but said the proposal resembles the June 17 memorandum of understanding (MoU) signed by Iran and the US, which briefly eased the conflict before breaking down. “The moment they accept this plan, from the next day, this timetable can start, and after seven days, the strait will be open,” he said.

Under the June agreement, Iran undertook to allow ships to pass through the strait without paying tolls for 60 days – that was the period of time given for peace talks to take place. But the MoU left open what would happen after that period.

Araghchi did not say whether the same arrangement formed part of his new proposal. Nor did he spell out what Washington would have to do before the seven-day timetable began, how either side would verify those steps, or what rules would govern shipping once the strait reopened.

It is highly unlikely Iran would be offering to cede control of the Strait of Hormuz, analysts say.

Urban Coningham, a research fellow at the Royal United Services Institute, told Al Jazeera that Tehran is unlikely to receive the sanction relief it has previously demanded and, therefore, sees the strait as its primary ticket to helping it recover from the war economically.

“Hormuz is a clear Iranian red line,” he told Al Jazeera. “The Iranians will not get reparations for the war, so control of the strait is the only way they can recover economically. I cannot see them backing down from that.”

Why does the June agreement matter?

The MoU signed in June set out an immediate halt to military operations on all fronts, including in Lebanon, where Israel has launched strikes and occupied part of the country, and triggered a 60-day period for negotiations on a lasting peace settlement. It included US waivers for Iranian oil exports and provisions to restore maritime traffic through the strait.

It deferred other issues, including the future of Iran’s enriched uranium stockpile, to broader peace talks.

But the agreement unravelled the following month amid renewed confrontation over shipping routes through the strait.

Coningham told Al Jazeera that Iran’s latest proposal follows this earlier model: “Open the strait within seven days, then start talks on the nuclear file.”

But “the US does not want to compartmentalise the issues, it wants them discussed as one package”, he said.

How else does this new proposal place pressure on the US?

Coningham also sees a political calculation in making the offer publicly at the UN as Americans contend with high fuel prices. “By explicitly saying this may be the only chance before the midterms, Iran is putting pressure on Trump over oil and gas prices and the strait,” he said. “It is a tactic to put more pressure on the US.”

The strait, which runs between Iran and Oman, is a vital route for oil and gas exports from the Gulf. Disruption to shipping has driven up energy prices far beyond the region, giving both governments an economic reason to reach an agreement despite their differences.

With the US midterm elections approaching, a deal to get it reopened could give Trump a chance to bring down fuel prices before voters go to the polls – potentially giving the Republican Party a much-needed electoral boost before the midterms.

Trump has presented the electoral calculation differently, however. In his address to the General Assembly on Tuesday, he accused Iran of waiting to see how his Republican Party performs in November and predicted a deal would happen after the vote. He also threatened to “annihilate the Islamic Republic” if there was no agreement.

Trump claimed the election did not affect his own decision-making on Iran: “The only thing that does is that Iran will never have a nuclear weapon.”

That leaves an open question about whether the prospect of lower energy prices is enough to persuade his administration to accept Iran’s proposed order of talks. Coningham doubts it. “Trump is prepared for this to go on through the midterms,” he said. “The same problem remains where the proposal does not answer questions about the nuclear file.”

Where do broader US-Iran peace talks stand?

Araghchi met US envoy Steve Witkoff and Trump’s son-in-law Jared Kushner on Tuesday in talks mediated by Qatar. The Iranian foreign minister described the exchange as productive and said messages continued to pass between the sides.

US Secretary of State Marco Rubio said it would be wrong to describe the meeting as a major breakthrough, however.

Burcu Ozcelik, a senior research fellow for Middle East security, told Al Jazeera that the major blockage for Washington and Tehran is that each is making different assumptions about how much pressure they can exert on the other. The Trump administration is unlikely to revive the failed MoU, she said, because it assesses its naval blockade and tighter sanctions as working.

“The US appears to believe it can wait this out until Tehran is prepared to make meaningful concessions,” Ozcelik said.

“But Iran remains defiant despite indications that it is hurting economically.”

The red carpet was rolled out, and a trade truce was extended. Yet, beneath the pomp and pageantry of Chinese President Xi Jinping’s state visit with US leader Donald Trump on Thursday, Washington and Beijing remain locked in a much deeper strategic rivalry.

Xi arrived in Washington, DC on Wednesday evening for talks on Thursday, and Trump was there to meet him personally on the tarmac.

The meeting was the first state visit by a Chinese leader to the US in 11 years. But it is also the third time in less than a year that the two men have met face to face, as the two powers remain uneasily gridlocked in competition over AI, rare-earth metals, the question of Taiwan, and the Iran war.

Overhanging it all is the paused, but simmering, trade war between their two nations.

Almost as soon as Trump began his second term in the White House in January 2025, up went tariffs on Chinese goods as he accused China of facilitating the flow of fentanyl, a deadly drug, to the US. Beijing responded with its own levies, then restricted exports of valuable rare-earth metals which are crucial for the development and manufacture of everything high-tech, from smartphones to fighter jets. At one point, tariffs were heading towards 150 percent before being paused to allow time for talks.

Finally, the two leaders called a truce on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea on October 30, and they met once more, in May, when Trump travelled to Beijing.

As Xi landed in Washington on Wednesday this week, the Trump administration announced that the two countries had agreed to extend an October 2025 truce which had offered some respite from the punishing tariffs, produced an agreement from China to buy more soyabeans from the US and delayed the ban on rare-earth exports from China until January 10. The prospect of a much-longed-for trade deal appeared to be in the air when US Treasury Secretary Scott Bessent told Fox News he had met Chinese ‌Vice Premier He Lifeng before Xi’s visit to “see if we could ⁠do a bigger deal as opposed to just a series ⁠of smaller things”.

But analysts have, for the most part, shot down such hopes. Beyond tariffs, they say, the simmering conflict between the two powers now encompasses new US sanctions on buyers of Russian oil – namely China – and sweeping investment and research restrictions, never mind the intensifying race for dominance in artificial intelligence.

“The two-month extension isn’t a bridge to a grand bargain – it’s a temporary sandbag holding back a structural flood,” Beijing-based Einar Tangen, a senior fellow at the Center for International Governance Innovation, told Al Jazeera.

Theatrics or continued thaw in tensions?

In fact, the truce is little more than “transactional theatre” – an attempt at good optics before the upcoming US midterm elections – Tangen said.

Trump’s deeply unpopular war on Iran has already inflicted severe damage to his chances in that vote. Democrats are leading in the polls amid concerns about the rising cost of energy, triggered by the war which the US started. Trump ultimately needs wins on other issues.

The current truce with China serves a purpose, therefore, but is fragile enough to be undone the moment political utility shifts for Trump, Tangen said.

“Success in January won’t be measured by what is solved, but by whether the knot is left tight enough to hold, but not kill,” said Tangen.

Phillippe Le Corre, professor of international relations and Asian studies at France’s ESSEC Business School, said the length of the truce extension indicates clearly that a more permanent deal remains out of grasp.

“The extensions are getting shorter and shorter, which means they haven’t found a common ground on many issues,” Le Corre told Al Jazeera.

“The two-month extension is a terrible outcome for the US. Nothing is resolved, and many Damocles’ swords are still hanging over Washington’s head,” he added.

Trump’s entire China policy, Le Corre argued, is in fact short-sighted. “That is bringing the world a lot of uncertainty,” he said.

Some analysts are more hopeful, but not much. Sun Chenghao, a fellow at the Center for International Security and Strategy at Tsinghua University in Beijing, described the extension of the trade truce as a “useful interim step”. It shows that both sides want to preserve the recent easing of tensions, which is meaningful progress, he said.

“From China’s perspective, a sustainable agreement needs reciprocal benefits and greater policy predictability,” Sun told Al Jazeera. “Additional purchases cannot indefinitely compensate for uncertainty over tariffs, technology restrictions and market access.”

The extension’s value, however, will depend on whether it produces “concrete commitments” from Beijing and Washington, Sun added.

A game of ‘economic chicken’

There is motivation to get a deal done, analysts say. Any escalation in the US-China trade war will be costly for both sides.

But there is some way to go. A Congressional Research Service report in July 2026 noted that Chinese goods exported to the US still face tariffs of 36.5 percent, while US goods entering China are taxed at 31 percent.

Any higher, and they will raise import and manufacturing costs in the US, squeeze margins and increase pressure on consumer prices, said Sun. They would also hurt US farmers and industrial exporters, he added, just as the US faces pressure from the rising costs of its war on Iran, which have pushed it into a record national debt of $40 trillion two years earlier than expected.

“Washington is playing a high-stakes game of economic chicken with a $40 trillion debt load, an inflationary sword of Damocles, zero fiscal cushion to absorb a truce collapse and a dependence [on] Chinese industrial and manufacturing inputs,” Tangen said.

US consumers and the economy in general will find it tough to survive yet another inflationary shock from renewed tariffs “at a time when the federal budget already operates like a high-wire Ponzi scheme”.

Then there is the AI race, which no one can afford to lose. According to Jon Bateman, a senior fellow at the Carnegie Endowment for International Peace, a partial “decoupling” of US and Chinese technology ecosystems is under way. US policymakers have pushed to become less dependent on Chinese tech and “to secure America’s technological future in the context of a rising China”, Bateman writes.

But that will not help if there is a collapse in valuations of companies in the AI sector, which currently drive global stock markets. An AI valuation collapse, Tangen warned, “could trigger a financial tsunami that makes 2008 look tame – making technological decoupling meaningless as the world is plunged into a depression”.

Despite the trade war and Trump’s tariffs, China’s trade with other countries has risen sharply, with the country registering a $1.2 trillion global trade surplus last year. But an escalation of the trade war with the US would nevertheless spell increased pressure on export orders, employment in exposed industries and business confidence, said Sun.

Beijing does hold one crucial ace card – it is sitting on 60 percent of the world’s known deposits of rare-earth minerals, said Le Corre. It processes 90 percent of them, too. These are the metals that all countries need supplies of for semiconductors, technological components and the manufacture of weapons, to name but a few. Last year, China began to make use of that leverage by restricting exports of five of the 12 rare-earth metals it mines in April. Then, in October, it prepared to restrict seven more – until the trade truce happened. Plans for the export restrictions are not shelved, however, merely on hold.

“[China] understood this over the past year and they are certainly not going to give up on this,” said Le Corre.

“Washington is hostile, but it is hooked,” Tangen said. “You cannot threaten China with secondary sanctions on energy while desperately needing its rare-earths to fuel your military-industrial base.”

A drawn-out path to durability

The path to a lasting US-China trade deal will be long and rocky. First, any new tariff reductions will need more coverage and duration, said Sun.

For a deal to last, it would also require “more predictable licensing and actual deliveries of rare earths and critical minerals; restraint in expanding technology restrictions; and market access reflected in regulatory approvals and completed transactions”, he said.

A durable agreement also needs regular consultations and a process for resolving complaints. If all this can be hammered out then, just maybe, there might be a chance, Sun said.

Tangen and Le Corre were less optimistic, however. “The US view of China as an existential threat has to change before there can be solutions,” said Tangen.

Le Corre, meanwhile, said that while China is a long-term planner, “durable is a word that can hardly be associated with Trump.”

The existing trade truce also risks breaking down if there are new unilateral tariffs, broader technology or mineral restrictions, or disputes over whether commitments have been fulfilled, said Sun.

Tensions over Taiwan, which China claims as its own territory, but for which the US approved an $11.1bn arms sale in December last year, could also trigger a breakdown in trade relations, the analysts said.

“Taiwan remains the ultimate low-probability, catastrophic-impact tail risk – where a single round of arms sales can snap a multibillion-dollar trade truce in an instant,” Tangen noted.

Tehran, Iran – Amid dire fuel shortages and mounting economic challenges, the Iranian government is seeking cost-saving measures for government workers and other citizens to deal with the crisis.

On Saturday, the government set office attendance hours for 8am to 1pm from September 23 to the end of the current Iranian year (late March 2027), with the remaining contractual hours to be completed remotely.

Agencies must also designate one day a week when employees and managers travel to work by public transport. In recent days, government ministers have released videos showing themselves using the metro to commute to work as part of the campaign.

Metro and bus rapid transit (BRT) systems will also be free of charge until mid-November in a bid to encourage commuters to leave their cars at home. Worn-out government vehicles will also be replaced with electric, gas-powered or hybrid alternatives, although this is expected to take years to implement.

The reopening of universities is expected to be staggered and partial, with some lessons shifted online by authorities.

Government-linked offices are required to switch off heating and turn off lights after working hours, while schools, universities, healthcare facilities and operational services are to follow separate arrangements to be announced later.

President Masoud Pezeshkian signed a directive on September 12 instructing government agencies to facilitate remote work for suitable employees to save on petrol, electricity and natural gas costs for the state.

“We have begun consumption savings with the government,” Pezeshkian said earlier this month. This is seen as effectively framing remote work and other measures for government workers as in line with other energy-saving measures that the government has asked of the rest of the population.

Resource-rich Iran has dealt with energy crises before, rooted in mismanagement and dated infrastructure, when similar cost-saving measures were implemented. But the added pressure of war with the United States and Israel has forced the government to think of creative solutions to energy shortfalls.

In early September, the cash-strapped government raised the price of fuel for the third tier of quotas for a second time in less than a year, meaning that people will pay double for any petrol use beyond 110 litres (29 gallons) per month. Imported vehicles and some other categories of cars are also limited to the most expensive tier of fuel.

For the first five months of the current Iranian year, which ended on August 22, average daily petrol production was 122 million litres while consumption was at 132 milion litres, highlighting a shortfall in supply versus demand. In the first half of the sixth month, the gap between production and consumption was around the same, at a 10 million litre shortfall.

The US naval blockade of Iran’s southern ports in place since July has halted fuel imports that previously helped balance the gap. The blockade has also stopped Iran from exporting its oil via supertankers transiting the Strait of Hormuz, affecting its foreign currency income. Crude stored on open waters beyond the blockade line is still being gradually sold to China.

Oil and gas facilities, petrochemical companies and major fuel depots were also bombed by the US and Israel, impacting production and distribution. Oil Minister Mohsen Paknejad said in early September that “a significant portion of production capacity has now been restored, and the process is continuing”.

As rampant inflation continues to squeeze most Iranians, data released this week by the Statistical Center of Iran also highlighted the damage the war with the US has dealt to the economy.

Iran experienced a massive 10.1 percent year-on-year fall in real gross domestic product (GDP) and a 26.4 percent fall in oil and gas extraction between late March and late June 2026, the centre’s data showed.

Including oil, industries and mining were down 14.7 percent, while construction was down by 6.4 percent, services overall by 4.8 percent, and transport, storage and communications by 17 percent.

The government has not released any information on how many workers are estimated to be affected by the remote work directive, or how it expected efficiency to be impacted.

But after decades of mismanagement, corruption and inefficiency among government-linked organisations, some Iranians believe it highlights a wider issue of state inefficiency.

“My unpopular opinion is that if 85-90 percent of government sector personnel are fired and 70 percent of ministries closed down, absolutely no problem will occur in the country,” a user named Mohsen wrote on X.

Zabihollah Salmani, a deputy head of the Administrative and Employment Organisation of Iran, told reporters during a press conference in August that more than 2.43 million were on its payroll.

If council, fire brigades, social security and non-government organisation workers were included, this would bring the number to more than four million people. The average monthly pay for government personnel at the end of the previous Iranian year in late March 2026 was around 240 million rials ($104 at the current exchange rate).

Asked by reporters how many of these employees could potentially be taken off the payroll without hurting output, Salmani said, “We do not yet have these figures.” He added that agencies were being asked to submit that information.

About 1,075,000 people are on the payroll of the Education Ministry, including teachers and trainee staff, while 600,000 employees work under the Ministry of Health and its affiliated networks, according to official figures.

Amir-Hossein, a young man working at a research centre linked with the government-funded University of Tehran, said that since the start of the month, he had been assigned two days of remote work. Working hours were set for 7am-1pm before, but are to be shifted to 8am-1pm starting from Wednesday, per the government.

His work can be done on his laptop, but might require some coordination on the phone or short commutes to other centres, he said. Overall, the remote work lifestyle has been beneficial.

“Sometimes I get more work done than I would have at the office,” he told Al Jazeera, asking not to use his full name due to security reasons.

As Amir-Hossein regularly uses online ride-hailing services to commute to and from his job, working from home has been financially beneficial for him.

An Iran-based economist who spoke to Al Jazeera on background said the government measures are essentially crisis control at best, and not a long-term solution to the problem.

Amid the US-Israel war on Iran, the country’s economy has suffered a sharp contraction, with its crucial oil and gas sector taking the biggest hit as the United States tightens its economic and military pressure on Tehran.

Data released by the government-administered Statistical Center of Iran showed gross domestic product (GDP) shrank by 10.1 percent year-on-year between March 21 and June 20, the first quarter of the Persian calendar.

The period covers the opening months of the US-Israel war on Iran, which began on February 28.

The economic downturn has come as Iran struggles to export its oil, one of its most important sources of foreign currency, while also contending with high inflation, a weakening rial, and disruptions to trade and industry.

Here is what you need to know:

What does the economic data say?

The headline GDP number masks an even steeper decline in Iran’s energy industry. Crude oil and natural gas activity contracted by 26.4 percent compared with the same period a year earlier. GDP excluding oil, by comparison, fell by 4.6 percent.

The damage has spread beyond the energy sector. Industry and mining contracted by 14.7 percent, services declined by 4.8 percent, and manufacturing contracted by 2.5 percent. Agriculture was the exception, growing at 2.3 percent.

Those figures come amid an already difficult economic situation in the country. Earlier this month, Iran’s 12-month average inflation reached 69.9 percent, while food, beverage, and tobacco prices rose at nearly twice that rate. Official unemployment climbed to 9.1 percent in the spring.

The rial, meanwhile, fell from about one million to the US dollar a year earlier to more than 2.2 million in early September.

What is the latest with Iran’s oil exports?

Iran’s ability to sell crude has been dramatically curtailed by the US naval blockade, imposed for most of the war.

Iranian crude and condensate loadings collapsed from about two million barrels per day in March to roughly 740,000bpd in July and just 220,000-255,000bpd in August, according to estimates from Kpler and Vortexa.

TankerTrackers.com told the Reuters news agency that 29 tankers, carrying 36.11 million barrels of crude, were trapped in the Strait of Hormuz. Meanwhile, Vortexa estimated total Iranian crude afloat had fallen from 135 million barrels at the end of July to 107 million barrels by late August.

Is Trump winning the economic war on Iran?

By several economic measures, Washington’s pressure campaign is inflicting damage on Iran’s economy.

On September 6, total trade had fallen by 25 to 35 percent, President Masoud Pezeshkian said, with imports hit harder than exports. The US blockade of the Strait of Hormuz has made it hard for ships carrying imports to reach Iranian ports.

Tehran has also explicitly linked the end of the war to economic relief. Iran’s security chief Mohsen Rezaei told Al Jazeera on Saturday that its conditions include “the release of our frozen funds and an end to the naval blockade”.

In addition to the naval blockade, US Treasury Secretary Scott Bessent last month announced an economic pressure campaign against Iran, pledging to target its financial interests across the world. He said the US would target all of Iran’s sources of revenue, including oil, to prevent other countries and companies from doing business with Tehran.

The US-Israeli attacks and Iran’s retaliations have disrupted Tehran’s trade with one of its main economic partners, the United Arab Emirates.

The UAE last month announced an indefinite trade embargo on Iran after accusing its forces of carrying out several ballistic missile attacks, which Tehran denied, calling it a “false flag operation” by Israel and the US.

Chris Beauchamp, market analyst at IG Group, said, “Most wars are contests of stamina more than anything else.”

“The 10 percent drop in Iranian GDP is a sign that the US is succeeding in putting pressure on its foe. But the question rests, as it has done since March, on whether Iran can weather the fall in economic activity better than the US can stand the surge in energy costs,” he told Al Jazeera.

“For a regime prepared to do anything to stay in power, this news will make little difference, so long as the security forces remain loyal,” he added.

What is the latest with diplomatic efforts to end the war?

While Iran has taken a defiant stance against US economic and military pressure, it has indicated repeatedly that it remains open to diplomatic means to end the nearly seven-month-old war.

On Saturday, Rezaei told Al Jazeera that Iran conveyed a formal set of conditions to Washington through Qatari mediators for ending the war.

Iranian state media outlet IRNA reported on Monday that Pakistani Interior Minister Mohsin Naqvi was set to visit Tehran, without specifying the agenda or other details.

Mediators Qatar and Pakistan have been working to re-establish negotiations between the two sides since their memorandum of understanding (MoU) expired last month.

Meanwhile, Iranian Foreign Minister Abbas Araghchi will stop briefly in Qatar before going to New York for the UN General Assembly, IRNA reported.

Iran has repeatedly said it remains ready for any new strikes by Washington.

Rezaei said on Saturday Tehran did not rule out a new US strike against Iran, calling the possibility “very much on the cards” based on his country’s military assessments.

Mark Pfeifle, a Republican strategist and former White House and national security official, said Iran and the US are still willing to strike a deal.

“Sometimes in diplomacy it’s what’s taken off the table,” he told Al Jazeera.

Pfeifle said when Rezaei reiterated his demands for talks with the US, he spoke of “ending the blockade, releasing the frozen funds [and] stopping the attacks”.

“But he left off reparations and reconstruction money, which tells me that there’s a concrete sign that amongst all the rhetoric, which is still very strident, that the pressure campaign that the US is putting on Iran is having some effect,” he said.

“And it tells me that both sides are still looking for room to negotiate in the coming weeks.”

The outage marks at least the sixth one this year after a United States-imposed energy blockade went into effect.

Cuba has worked to restore power after suffering a significant blackout that left many parts of the country in the dark.

The state-run company in charge of operating the country’s electrical system, Union Electrica (UNE), said nearly half of its customers in the capital of Havana had regained power on Saturday.

“The re-establishing is being done gradually, as conditions permit,” UNE posted on social media.

The latest blackout, at least the 12th since late 2024, first affected five of Cuba’s eastern provinces, including Havana, before spreading across the whole island. It is at least the sixth this year alone.

Cuban authorities told the Reuters news agency on Friday the collapse was the result of a failure in high-voltage transmission lines in the central part of the country. UNE said “unstable weather conditions” also played a role.

For years, Cuba’s ageing infrastructure and fuel shortages have led to sporadic blackouts. But power outages have become more frequent after the United States, in a bid to put political and economic pressure on the country’s government, imposed an energy blockade in January.

United Nations human rights experts have condemned the US oil blockade, calling it a violation of international law and warning ‌that ‌Cuba risks becoming a “silent Gaza” as shortages and blackouts grow ever more critical.

Some of the island’s residents said they were already out of power when Friday’s blackout happened.

“Yesterday, I’d gone without power for 24 hours. They turned the lights on for an hour, and then the grid collapsed,” Havana resident Frank Lorenzo, 23, told Reuters.

Others, like Lidia Fernandez, told the news agency AFP that a lack of fuel makes it difficult to power backup generators, which run on imported diesel.

“It’s one thing after another: no water, no gas for cooking, no electricity,” the 36-year-old teacher said.

Fernandez added, “Honestly, I don’t know how we haven’t gone crazy.”

Italy’s defence minister warns of severe economic fallout if Bab al-Mandeb becomes impassable, bypassing EU delays.

Italy will deploy warships to ensure safe passage for its commercial vessels through the Bab al-Mandeb strait, Defence Minister Guido Crosetto said, adding that Rome would not wait for a joint decision from the European Union.

“We have the capabilities to protect the passage,” Crosetto said, warning that if the waterway became impassable, the economic consequences would be severe.

The Italian defence minister said that Rome “must not allow bureaucratic delays in decision-making to exacerbate an already complex situation”.

Bab al-Mandeb links the Red Sea to the Gulf of Aden, forming one of the world’s busiest shipping corridors between Europe and Asia and a critical route for oil, gas and container traffic heading to and from the Suez Canal.

Roughly 12 to 15 percent of global trade has historically passed through the narrow waterway, which separates Yemen from Djibouti and Eritrea on the African side and is only about 30km (19 miles) wide at its narrowest point.

The strait’s importance has grown sharply since Iran effectively seized control of the Strait of Hormuz earlier this year amid its war with the United States and Israel, choking off the world’s most important oil chokepoint and pushing much of the Gulf’s crude exports towards alternative routes.

Saudi Arabia, in particular, has increasingly relied on pipelines and Red Sea shipping to bypass Hormuz altogether, making the Bab al-Mandeb strait one of the last major arteries still open to Gulf oil reaching global markets.

Control of the strait has been contested for years, as Yemen’s government, Houthi rebels and, at times, forces in the region have held stretches of its coastline at different points since the war in Yemen began in 2015.

The significance of the strait has been hit dramatically in the past few weeks, when the Iran-backed Houthi movement launched a rapid offensive that brought the entirety of Yemen’s western Red Sea coast under its control, including several strategically located islands.

The advance has given the Houthis effectively unrestricted access to the waterway, a development seen as a major setback for international shipping, given the group’s history of attacking vessels it associates with the US or its allies in the region.

The US and the European Union have already carried out military operations aimed at better protecting merchant ships from Houthi attacks in the area, though those efforts have struggled to fully secure the route as fighting in Yemen has escalated.

New Delhi says it has ‘made clear’ its determination to ‘protect its trade and economic interests’.

India has warned the United States that new measures to levy tariffs over the purchase of Russian oil could impact ⁠bilateral ties, hours after the US Congress approved a bill that would give President Donald Trump new abilities to punish buyers of Russian oil.

The US House of Representatives on Wednesday passed a sweeping sanctions and tariff bill intended to increase economic pressure on Russia over its invasion of ⁠Ukraine.

The bill targets Russia’s energy and defence sectors, President Vladimir Putin and other senior officials, as well as Moscow’s so-called shadow fleet of tankers used to circumvent Western sanctions.

It also authorises President Donald Trump to impose stiff tariffs of up to 100 percent on countries, including India, to reduce their dependence on Russian oil and gas, and⁠ extend sanctions on Iran.

The bill has been sent to Trump to sign into law.

India’s foreign ministry said on Thursday that it “remains firmly committed to ensuring energy security for its 1.4 billion people”.

The Indian foreign ministry said that it had noted the bill’s passage, adding that New Delhi had raised the issue with various US interlocutors in recent months, and had “very clearly articulated” the potential implications for the bilateral relationship and the international energy market.

“The Indian side has also made clear its determination to take all necessary measures to protect its trade and economic interests,” it said in a statement.

The government would work closely with trade and industry bodies to deal with the legislation’s implications, it added.

India, the world’s third-biggest oil importer, is among the biggest buyers of Russian oil, which is seen as helping Moscow replenish its budget since it launched its full-scale invasion of Ukraine in February 2022 and was hit with ⁠sweeping Western sanctions.

New Delhi has repeatedly sought to resist pressure to reduce its oil trade with Russia, saying its large population and economy need secure, affordable and reliable energy supplies.

The symbolic move comes as Argentina escalates its claim over the British-administered territory.

An Argentinian judge has ordered the suspension of a British-Israeli oil project near the Falkland Islands in a purely symbolic move as Argentina escalates its claim over the British-administered territory.

Wednesday’s interim ruling issued by a court in Argentina’s southernmost province, Tierra del Fuego, follows a lawsuit filed by 1982 war veterans and environmental lawyers earlier this month.

The plaintiffs sought to block Britain’s Rockhopper Exploration and Israel’s Navitas Petroleum from the Sea Lion oilfield, located about 220km (137 miles) from the islands.

The judge ordered the companies to “refrain from initiating, pursuing, carrying out or having carried out any material actions” that would involve drilling, installing infrastructure or extracting hydrocarbons, according to a ruling seen by the AFP news agency.

Additionally, the suspension applies “until such time as the environmental impact assessment procedure has been conducted before the national authority competent in environmental matters”.

The judge gave the parties 10 days to provide information, including details about the status of the project, its contractors and its financiers.

President Javier Milei’s administration has also taken legal action against the project, arguing it violates a United Nations resolution calling for both sides to desist from unilateral actions in the islands until their dispute is resolved.

The court order comes just a day after Argentina announced it would file further legal complaints against companies exploring for oil near the islands, intensifying its campaign against businesses operating in the British overseas territory.

Britain and Argentina fought a brief but bitter 10-week war in 1982 over the South Atlantic islands, known to Argentines as the Malvinas.

The 1982 war ended with an Argentinian surrender after 74 days of conflict that killed 649 Argentines and 255 British troops, as well as three Falkland Islanders.

Buenos Aires has doubled down on its claim over the Falkland Islands after US President Donald Trump said Washington was open to reviewing its historically neutral stance on the territory.

London maintains the islands are British and rejects the jurisdiction of Argentinian courts in the Falklands.

The islanders themselves voted overwhelmingly in 2013 to remain British.

But Argentina rejects that outcome, arguing that the principle of self-determination does not apply to a population it considers implanted by Britain after 1833.

DEVELOPING STORYDEVELOPING STORY,

The 25 basis-point hike is the first raise in three years and comes ahead of critical midterm elections in the United States.

The United States Federal Reserve has said it will raise interest rates by a quarter of a percentage point as inflation, driven by soaring fuel prices amid the US-Iran war, continues to weigh on the economy.

The Fed, which is the central bank of the US, said on Wednesday that it will hike interest rates by 25 basis points to 3.75 percent to 4 percent.

It is the first hike in more than three years and comes just weeks before the US midterm elections, despite repeated demands from US President Donald Trump to lower rates.

“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Fed said in a statement on Wednesday.

“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.”

After Wednesday’s hike, Fed officials expect one more rate increase this year, according to their quarterly projections.

CME FedWatch, which tracks the likelihood of monetary policy decisions, forecast a 92.3 percent chance of the Fed increasing rates to 3.75 to 4 percent. A week ago, that forecast was a 40 percent chance of a quarter-percent rate increase.

But in the days since, a slew of data shifted those expectations.

For one, consumer prices jumped in August by 0.4 percent, the highest increase in four months. On an annual basis, prices rose 3.4 percent, matching the increase recorded in July, while the job market remains healthy.

Since then, benchmark crude oil prices have continued to soar as strikes in the US-Israel war on Iran have intensified. Brent crude hovered near $109 per barrel on Tuesday.

The average price for a gallon (3.8 litres) of petrol is $4.36, up 14 cents in the past week, and up from $4.06 in the last month, according to the American Automobile Association (AAA), which tracks daily petrol prices.

Diesel, on the other hand, was at $6.31, the highest recorded average and roughly double from a year ago. That, in turn, is expected to further stoke prices as diesel is used in trucks to haul everything from fruits and vegetables to steel and cement.

At the same time, the benchmark 10-year Treasury yield broke above the psychologically important 5 percent threshold on Tuesday, hitting 5.02 percent, its highest level in 19 years. The yield serves as a benchmark for borrowing costs, including car loans and home mortgages, and is a bellwether for inflation.

“The economy is in an unusual place,” Michael Klein, professor of international economic affairs at Tufts University’s Fletcher School and executive editor of EconoFact, a nonpartisan economic and social policy publication, as unemployment remains at a comfortable level while higher prices continue to stick, sending inflation beyond the Fed’s target of 2 percent.

“There [has been] a lot of pressure on Chairman Warsh to raise interest rates because of inflation coming in high, and that has been compounded by concerns about Trump’s pressure” as the president has continued to demand that interest rates be lowered, Klein said.

“Higher interest rates tend to weaken the economy… but if the market believes that there’s going to be a rate increase, it’s priced in already as prices move on news, so this won’t be news,” Klein said, adding that should help steady yields.