risks

SpaceX is set for the largest stock market debut ever.

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Elon Musk’s rocket company begins trading on the Nasdaq on Friday under the ticker SPCX. The company priced its shares at $135 each, raising $75 billion (€64.5bn) and valuing the business at $1.75 trillion (€1.5trn) in the biggest stock market flotation on record.

The deal would comfortably eclipse Saudi Aramco’s previous record of $29.4bn, set in 2019 and later increased through an overallotment option.

SpaceX made an unusually strong push to attract retail investors, including those in Europe. According to Bloomberg, individual investors placed roughly $100bn (€86.6bn) in orders through trading platforms including Robinhood, Fidelity and SoFi during the IPO process.

That demand alone exceeded the company’s $75bn (€64.5bn) fundraising target, underscoring the level of interest from smaller investors ahead of the stock market debut.

Yet beneath the hype, several warning lights are flashing. Here are five risks investors should weigh before the SpaceX IPO goes live.

1. Is SpaceX worth $1.75tn?

At a valuation of $1.75tn (€1.5trn), investors would be valuing SpaceX at roughly 94 times its annual revenue, which was $18.7bn (€16.1bn) in 2025. By comparison, Nvidia — one of the market’s most highly valued technology companies — trades at less than a quarter of that level.

The investment research firm Morningstar, which values the company at $780bn (€675bn), called it “significantly overvalued” while Goldman Sachs data suggests sustaining the share price would require revenues above $100bn (€86.6bn) by 2030, implying a compound annual growth of more than 40%.

History offers a note of caution. Research by University of Florida professor Jay Ritter, often referred to as “Mr IPO”, found that while IPOs between 2012 and 2021 rose an average of 23.6% on their first day of trading, they returned just 10.6% over the following three years.

2. Fast-tracked into indexes and supported by a small float

SpaceX’s expected inclusion in major stock indexes has become a point of controversy. Investment officials from four large US states have urged Nasdaq and FTSE Russell to explain recent rule changes that could accelerate the company’s entry into widely tracked benchmarks.

Critics argue the move could expose passive investors to a highly valued stock sooner than expected, while the index providers say the changes reflect broader market developments.

The debate matters because relatively few SpaceX shares will initially be available for trading. Although SpaceX is valued at $1.75tr (€1.5trn), only around 3% to 4% of its shares will initially be available for public trading.

That means the company’s market value will be determined by trading in a relatively small portion of its equity. Reports suggest more than 75% of the $75bn (€64.5bn) offering has already been allocated to existing investors and insiders, leaving fewer shares available on the open market.

According to Morningstar, the limited float and strong demand for artificial intelligence-related stocks could help support the share price in the early stages of trading, even if the company is valued above what the research firm considers fair value. The firm argues that a clearer picture of investor demand may emerge once lock-up restrictions expire and more shares become available for trading.

Some analysts, however, believe the limited float could continue to support the stock. Estimates suggest between $22 billion (€19bn) and $27 billion (€23.4bn) of passive investment could flow into SpaceX once it joins the Nasdaq 100, creating additional demand from index-tracking funds.

3. Losses, not profits

SpaceX’s financial results may also give investors pause.

The prospectus shows that the company is growing rapidly but still losing money.

The company owns the Starlink satellite internet service, which generates most of its revenue and is its only profitable business. It also owns the artificial intelligence company xAI, which merged with SpaceX in February.

According to the filing, SpaceX carried an accumulated deficit of $41.3bn (€35.76bn) as of 31 March and reported a net loss of $4.27bn (€3.7bn) in the first quarter of 2026.

This compares with $528mn (€457mn) in the same period a year earlier.

Much of the recent loss stems from xAI. According to SpaceX’s IPO filing, the AI business recorded an operating loss of about $6.4 billion (€5.5bn) in 2025. The filing also showed xAI spent heavily in the opening months of 2026 as it expanded its AI infrastructure.

Morningstar argues the AI unit “poses a material threat of value destruction”, noting that Grok has yet to win meaningful market share against rival chatbots.

Supporters counter that the losses are a choice, not a structural flaw.

Revenue climbed 33% to $18.7bn (€16.2bn) in 2025, up from $14.1 billion (€12.2bn) a year earlier. The underlying launch and satellite business was profitable as recently as 2024. The deficits largely reflect heavy investment in AI infrastructure, spending that supporters say is already beginning to be offset by new compute contracts.

4. The AI growth gamble

Supporters argue investors are paying for future growth rather than current profits.

Starlink remains the company’s main source of revenue, while its artificial intelligence business is expected to play a larger role in the years ahead.

Bulls also point to SpaceX’s dominant position in rocket launches and satellite communications, arguing the company is uniquely placed to benefit from growing demand for connectivity, computing power and AI infrastructure.

SpaceX conducts more rocket launches annually than the rest of the world combined and counts over nine million Starlink subscribers, but its newest growth driver is the AI data-centre business acquired through the xAI merger.

Last Friday, Google agreed to pay SpaceX $920 million (€796.6mn) per month for compute capacity at xAI data centres, in a 32-month deal running from October 2026 through June 2029, and covering access to roughly 110,000 Nvidia GPUs.

That followed a May agreement under which Anthropic pays $1.25 billion (€1.08bn) a month to rent the entire output of the Colossus 1 data centre until May 2029, putting combined annualised compute revenue at around $26 billion (€22.5bn).

Bulls argue this contracted income, won in under four months, shows how quickly the company can monetise its infrastructure. Sceptics note that both contracts carry 90-day termination clauses after December 2026, and that Google itself has framed the arrangement as “bridge capacity” rather than a permanent commitment.

5. The Elon Musk-sized risk

SpaceX’s success is closely tied to Elon Musk, whose profile and track record have helped attract investors, customers and business partners. That creates what investors call “key-person risk” — concerns about how the company would fare if he were no longer leading it.

The company’s governance structure reinforces that dependence. Musk’s super-voting Class B shares give him around 85% of voting power, leaving outside shareholders with little influence over major corporate decisions. In practice, that means no one but Musk himself can determine whether he remains chief executive.

Critics also point to SpaceX’s incorporation in Texas, where only investors holding at least 3% of shares can bring derivative lawsuits. The Danish academic pension fund AkademikerPension has blacklisted the stock, describing the governance structure as “catastrophic”.

Supporters argue that dual-class share structures are common among US technology firms, including Meta and Alphabet. They say concentrated voting control allows founders to pursue long-term goals without pressure from short-term investors.

Musk’s prominence also brings political risk. US Senator Elizabeth Warren has urged the Securities and Exchange Commission to scrutinise the listing, warning that future index inclusion could expose millions of passive investors to the stock without them actively choosing it.

Others note that the SEC completed its review faster than expected, allowing the IPO process to move ahead without delay and suggesting regulators see no immediate obstacle to the listing.

Disclaimer: This information does not constitute financial advice, always do your own research on top to ensure it’s right for your specific circumstances. Also remember, we are a journalistic website and aim to provide the best guides, tips and advice from experts. If you rely on the information here, then you do so entirely at your own risk.

June 11 (Asia Today) — China’s renminbi, also known as the yuan, has strengthened sharply in recent months as Beijing seeks to elevate the currency’s global standing, but its rapid gains may create new risks for the Chinese economy.

The yuan recently reached its strongest level in three years and three months, prompting some Chinese media to describe the move as an advance by the currency. The trend is expected to continue for the time being.

According to recent reports by Chinese media, including National Business Daily, the yuan was poorly regarded until the end of the last century. Although the official exchange rate hovered around 8.2 yuan per dollar, the currency often traded at about 9 yuan per dollar on black markets in Beijing and other cities.

The yuan’s status began to change after China’s economy expanded rapidly in the early 2000s. After the 2008 global financial crisis weakened confidence in the U.S. economy, the yuan strengthened past 8 per dollar, then 7 per dollar, at times trading in the 6-yuan range.

The currency weakened again early last year and stayed around the 7-yuan level for about a year. Some analysts warned it could fall as low as 7.5 yuan per dollar.

Those concerns proved temporary. The yuan rebounded early this year and returned to the 6-yuan range. It strengthened further and traded around 6.77 yuan per dollar Wednesday, its highest level since Feb. 15, 2023, when it was at 6.8183 yuan per dollar.

Markets widely expect the yuan could strengthen further to around 6.5 per dollar. The currency was worth about 90 won at the end of the last century, but it now trades at about 225 won.

Several factors are driving the yuan’s gains. The prolonged war in the Middle East has increased demand for the yuan alongside the dollar, while China’s large trade surplus, supported by strong exports, has also lifted the currency.

A stronger yuan, however, is not necessarily good for China. It could become a burden for export-dependent companies by making Chinese goods more expensive overseas. Cheaper import prices could also deepen China’s chronic deflationary pressure, which remains a major concern for the economy.

Even so, Chinese economic authorities are not expected to intervene aggressively to slow the yuan’s rise.

Pan Gongsheng, governor of the People’s Bank of China, said during an economic news conference at the National People’s Congress in Beijing on March 6 that the yuan’s recent movement against the dollar reflected China’s stable economic recovery, weakness in the dollar index and a seasonal increase in corporate foreign exchange settlement.

Pan also said China did not need a yuan depreciation, signaling that authorities were comfortable with the currency’s strength.

The yuan’s transformation from a weak and undervalued currency into one with rising global influence has become increasingly difficult to ignore. But its continued ascent could create new pressure on China’s exporters and complicate Beijing’s fight against deflation.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260611010003994

Kazakhstan’s Energy Minister Yerlan Akkenzhenov said international partners are urging the country to increase oil exports as concerns grow over disruptions to energy supplies linked to tensions around the Strait of Hormuz.

According to Akkenzhenov, buyers are seeking the maximum possible increase in Kazakh oil shipments due to uncertainty surrounding one of the world’s most important energy transit routes. However, he noted that Kazakhstan faces infrastructure and production constraints that limit how quickly exports can be expanded.

To support higher output, Kazakhstan has postponed planned maintenance work at the Kashagan Oil Field until 2027. The country is also considering increasing crude shipments through the Baku Tbilisi Ceyhan Pipeline, potentially raising volumes from 1.5 million tons to 2.2 million tons annually and beyond.

The development comes as global energy markets remain sensitive to geopolitical tensions involving Iran and the Strait of Hormuz, a key route for international oil and gas exports.

Why It Matters

Kazakhstan’s growing importance highlights how global energy markets are seeking alternative supply sources amid rising geopolitical risks in the Middle East.

Any disruption in the Strait of Hormuz could affect a significant share of global oil shipments, prompting importers to diversify supply chains and reduce dependence on vulnerable routes. Kazakhstan, one of the world’s major oil producers, is increasingly viewed as a reliable alternative supplier.

The decision to delay maintenance at Kashagan signals that Kazakhstan is prioritizing production stability and export capacity at a time when energy security has become a major concern for consuming nations.

The move could also strengthen Kazakhstan’s strategic position in global energy markets, giving it greater influence as countries seek dependable suppliers outside conflict affected regions.

Key Stakeholders

• Kazakhstan – Seeking to expand exports while balancing OPEC+ commitments.
• Yerlan Akkenzhenov – Overseeing the country’s energy strategy.
• Kashagan Oil Field – One of the world’s largest oil fields and a key source of future production growth.
• OPEC+ members monitoring compliance with production agreements.
• Energy importing countries seeking alternative crude supplies.
• Oil traders and global energy markets responding to supply risks.
• Countries along the Baku Tbilisi Ceyhan Pipeline route that facilitate exports to international markets.

Future Outlook

Kazakhstan is likely to face increasing pressure from international buyers if instability around the Strait of Hormuz persists. While production constraints may limit immediate gains, the postponement of Kashagan maintenance suggests authorities are positioning the country to maximize output over the coming years.

The expansion of exports through the Baku Tbilisi Ceyhan pipeline could become increasingly important as energy consumers seek routes that bypass geopolitical hotspots. This would further enhance Kazakhstan’s role in global energy diversification efforts.

However, Kazakhstan must also balance market demand with its commitments under the OPEC+ framework. Any significant increase in production could attract scrutiny from fellow producers seeking to maintain supply discipline and price stability.

If Middle East tensions remain elevated, Kazakhstan is likely to emerge as one of the key beneficiaries of the global search for secure and reliable oil supplies.

With information from Reuters.

WASHINGTON — A Treasury inspector general report raises concerns about Immigration and Customs Enforcement’s ability to safeguard taxpayer information after ICE and the Internal Revenue Service agreed in 2025 to share taxpayer data for the purpose of immigration investigations.

The recently released report provides the first official accounting of the scale of the IRS-ICE information transfer and documents security concerns surrounding an arrangement that has been the subject of multiple lawsuits and significant controversy inside both agencies.

The Treasury Inspector General for Tax Administration found that the 2025 data-sharing agreement between ICE and the Treasury Department — which allowed ICE to submit names and addresses of immigrants in the U.S. illegally to the IRS for cross-verification against tax records — resulted in inconsistent formatting in ICE’s data and the IRS’ matching criteria, which led to errors.

The deal led the then-acting commissioner of the IRS to resign.

The report says that after the agreement was signed, ICE requested address information on more than 1.2 million people, and that the IRS ultimately provided last-known addresses for about 47,000 people.

The inspector general concluded that the IRS’ automated matching process was flawed. Inconsistent formatting in ICE’s data led to questionable matches, including in cases in which incomplete or inaccurate addresses were labeled as valid, the report says.

Representatives from the Treasury Department and the IRS did not respond to a request for comment.

The plan to cross-verify tax and immigration data is part of President Trump’s agenda to secure U.S. borders and his nationwide immigration crackdown, which has resulted in deportations, workplace raids and the use of an 18th century wartime law to deport Venezuelan migrants.

However, this is not the first time it’s been revealed that tens of thousands of taxpayers’ information was revealed to ICE.

In February, a federal judge said the IRS broke the law by disclosing confidential taxpayer information to ICE, referring to the same 47,000 disclosures that the inspector general points out.

U.S. District Judge Colleen Kollar-Kotelly found that the IRS had erroneously shared the taxpayer information of thousands of people with the Department of Homeland Security as part of the 2025 agreement.

No recommendations were made in the new inspector general report, according to a letter by Nancy A. LaManna, deputy inspector general for inspections and evaluations.

“However, we plan to share some concerns we identified during our review with the DHS Office of Inspector General,” her letter says.

Hussein writes for the Associated Press.

President Trump signed an executive order on artificial intelligence Tuesday, less than two weeks after postponing a White House ceremony over his concerns that a similar policy could dull America’s edge on AI technology.

The order establishes a framework for the federal government to vet the national security risks of the most advanced AI systems for up to a month before their public release. The government will be able to work with trusted partners “that will have early access to covered frontier models to promote secure innovation and strengthen the cybersecurity of critical infrastructure,” the order says.

It was not immediately clear to what extent the order differed from the one he declined to sign on May 21.

Trump canceled an Oval Office event with tech industry executives last month because he did not like what he saw in the earlier version of the order’s text. “We’re leading China, we’re leading everybody, and I don’t want to do anything that’s going to get in the way of that lead,” Trump told reporters at the time.

That directive was characterized as a voluntary collaboration with participating U.S.-based tech companies, including Anthropic, OpenAI and Google.

O’Brien writes for the Associated Press.

Technology stocks led a broad market rally across China and Hong Kong on Tuesday as investors poured into artificial intelligence related companies despite continuing uncertainty surrounding developments in the Middle East.

The strongest gains came from major technology firms including Tencent and Meituan, helping push Hong Kong’s technology index to one of its biggest daily advances in months. The rally reflected growing investor confidence in China’s technology sector, particularly in artificial intelligence, even as markets monitored fragile diplomatic efforts and ceasefire discussions involving regional conflicts.

The performance highlights an increasingly important theme in global markets: investors are weighing geopolitical risks against the powerful growth narrative surrounding artificial intelligence and technology innovation.

Background

Chinese technology stocks have experienced a volatile few years marked by regulatory scrutiny, slowing economic growth, property market challenges, and shifting investor sentiment.

However, the global artificial intelligence boom has provided a fresh catalyst for the sector.

As major technology companies race to develop AI models, digital assistants, and enterprise applications, investors have increasingly focused on firms capable of benefiting from the next phase of technological transformation.

At the same time, geopolitical developments continue to influence market sentiment. Escalating tensions in the Middle East, concerns about energy prices, and broader uncertainty in global financial markets have periodically weighed on risk assets.

Against this backdrop, Tuesday’s rally suggests that technology driven growth expectations remain a dominant force in investor decision making.

What Happened?

Major Chinese and Hong Kong equity indices posted strong gains:

• Hong Kong’s Hang Seng Index rose 2.5 percent.
• The Hang Seng Tech Index surged 4.7 percent.
• China’s STAR 50 Index gained 1.6 percent.
• The ChiNext Index climbed 2.7 percent.
• The CSI300 advanced 1.5 percent.
• The Shanghai Composite Index increased 0.4 percent.

Technology stocks were the primary drivers of the rally.

Tencent shares jumped more than 10 percent following reports that the company is moving closer to launching an artificial intelligence agent integrated into WeChat, China’s largest social media and messaging platform.

Meituan also gained strongly after investors reacted positively to signs that intense competition in China’s food delivery industry may be beginning to ease.

The rally extended beyond technology, with artificial intelligence related shares and non ferrous metal companies also recording significant gains.

Tencent’s AI Push Captures Investor Attention

Why Tencent’s Move Matters

The strongest market reaction centered on Tencent.

Reports suggesting that the company is nearing the launch of an AI agent for WeChat generated excitement because of the platform’s enormous user base of approximately 1.4 billion people.

If successfully deployed, such an AI assistant could become one of the largest consumer facing artificial intelligence applications in the world.

The development is significant because AI competition is increasingly shifting from standalone chatbots toward integration within existing digital ecosystems.

Companies that already possess massive user networks may have advantages in scaling AI services rapidly.

The Strategic Importance of WeChat

WeChat occupies a unique position within China’s digital economy.

The platform combines messaging, payments, shopping, business services, entertainment, and social networking into a single ecosystem.

Integrating AI directly into this environment could significantly enhance user engagement while creating new revenue opportunities through advertising, commerce, and premium services.

Investors appear to be viewing Tencent’s AI ambitions as a potentially transformative growth driver.

Why Meituan’s Gains Matter

Signs of Competitive Stabilization

Meituan’s rise may appear surprising given its latest quarterly loss.

However, investors focused less on earnings and more on indications that subsidy driven competition in China’s rapid delivery sector is beginning to moderate.

For much of the past year, food delivery companies have engaged in aggressive pricing battles designed to capture market share.

While beneficial for consumers, these strategies have pressured corporate profitability.

Evidence that the competitive environment is stabilizing could improve future earnings prospects across the sector.

Shift Toward Profitability

Investors often reward companies when they believe industry conditions are becoming more rational.

For Meituan, expectations of reduced subsidy spending may be viewed as a pathway toward stronger margins and improved financial performance.

The AI Investment Narrative Continues

Artificial Intelligence Remains a Global Theme

One of the most important lessons from Tuesday’s rally is that artificial intelligence continues to dominate market thinking.

Despite geopolitical uncertainty, investors remain eager to identify companies positioned to benefit from AI adoption.

This trend is not limited to the United States.

Chinese technology firms are increasingly being evaluated based on their ability to develop competitive AI products, infrastructure, and services.

Zhipu AI’s Listing Plans

Another development attracting attention was the announcement that Zhipu AI intends to pursue a domestic stock market listing in Shanghai.

The move highlights growing confidence among Chinese AI firms and demonstrates the sector’s increasing importance within China’s capital markets.

A successful listing could further strengthen investor interest in domestic AI development.

The Middle East Factor

Why Investors Remain Cautious

Although technology optimism drove markets higher, geopolitical developments remain a significant source of uncertainty.

Investors continue monitoring negotiations involving the United States, Iran, Israel, and regional actors.

Potential disruptions to energy markets remain a key concern because rising oil prices can increase inflation pressures and slow economic growth globally.

Markets Are Balancing Two Competing Forces

Current market behavior reflects a balancing act.

On one side are geopolitical risks, including conflict, energy market volatility, and diplomatic uncertainty.

On the other side is enthusiasm surrounding technological innovation and artificial intelligence.

Tuesday’s rally suggests that, at least for now, investors believe technology driven growth opportunities outweigh immediate geopolitical concerns.

Analysis: Why China’s Technology Sector Is Regaining Momentum

The significance of Tuesday’s rally extends beyond a single trading session.

It reflects a broader reassessment of China’s technology sector.

For several years, investors viewed Chinese technology companies primarily through the lens of regulatory risk, slowing growth, and geopolitical tensions.

Today, artificial intelligence is changing that narrative.

Investors increasingly see Chinese firms as participants in a global technological transformation rather than merely domestic internet companies.

Tencent’s gains illustrate this shift particularly well.

The market reaction was not driven by short term earnings or cost cutting measures. Instead, it was driven by expectations regarding future technological capabilities and growth potential.

Another important factor is capital flows.

China remains one of the few major emerging markets attracting investment across equities, bonds, and currencies simultaneously. This provides a supportive backdrop for asset prices even when external risks remain elevated.

At the same time, investors should not ignore underlying challenges.

China’s economy continues to face pressures from weak consumer demand, property sector difficulties, and slower growth compared with previous decades.

Artificial intelligence enthusiasm may boost valuations, but sustained market strength will ultimately require broader economic improvement.

Nevertheless, Tuesday’s performance suggests that global investors increasingly view China’s technology sector as a key participant in the AI revolution rather than merely a recovery story.

Future Scenarios

Scenario One: AI Momentum Continues

Technology companies successfully launch new AI products and attract additional investment.

This could drive further gains across China’s technology sector and strengthen market sentiment.

Scenario Two: Economic Weakness Limits Gains

Artificial intelligence enthusiasm remains strong, but broader economic challenges constrain corporate earnings and consumer spending.

Technology stocks continue rising, though at a slower pace.

Scenario Three: Geopolitical Risks Reemerge

Escalating tensions in the Middle East or worsening global economic conditions trigger risk aversion.

Investors shift away from growth assets, leading to increased market volatility.

What’s Next?

Investors will closely watch Tencent’s progress in launching AI features for WeChat and monitor adoption rates if the product is introduced.

Attention will also focus on upcoming earnings reports, AI related announcements, and developments surrounding Zhipu AI’s planned listing.

Beyond technology, markets will continue evaluating geopolitical developments in the Middle East and their potential impact on energy prices and global investor sentiment.

The interaction between technological optimism and geopolitical uncertainty is likely to remain one of the defining themes for financial markets throughout the coming months.

Conclusion

Tuesday’s rally demonstrates that artificial intelligence remains one of the most powerful forces shaping global investment decisions. Strong gains in Tencent, Meituan, and other technology companies highlight growing confidence in China’s ability to participate in the next phase of AI driven innovation.

While geopolitical risks continue to create uncertainty, investors appear increasingly willing to look beyond short term tensions and focus on long term technological opportunities. Whether this momentum can be sustained will depend not only on AI breakthroughs but also on the broader health of China’s economy and the stability of the global geopolitical environment.

With information from Reuters.

The Middle East has been a difficult region to deal with in oil markets. When it comes to energy geographies, the region has proven to be a disproportionately significant part of the world’s energy resources, with export facilities traversing a handful of maritime routes and political situations that have been tense, if not outright volatile, at times. The change in 2025 and into 2026 isn’t the nature of the forces but rather the confluence of overlapping pressures: ongoing sanctions enforcement, multiple theaters of conflict, OPEC+ tensions that are more public than ever in previous years, and disruptions to shipping in the Red Sea, which now seem to have become a semi-permanent part of the shipping route landscape.

There is no background information for commodity traders, market analysts, and energy investors. It’s a real-time, constantly evolving dynamic that can make all the difference in the day-to-day performance of prices, and it’s particularly important when prices are sliding around rapidly, and the stories behind them are changing just as fast.

The Behavior of Prices and the Risk of Middle East Supplies

Traders who follow crude oil price live data are the first ones to witness this. Real-time feeds are a reflection of more than just the fundamental supply-demand elements, but the market’s real-time assessment of the value of geopolitical risk and how much it “should” be worth at any given moment. A news event, which is a minor detail in a more stable environment, can cause future prices to move $5 or more in less than an hour. The consistent and tough question – and it is a tough one – is, which events actually have physical supply implications and which ones are sentiment-driven moves that die in a session or two?

The Strait of Hormuz

About 20-21 million barrels per day of crude oil and petroleum products go through the Strait of Hormuz, which is about 20% of the world’s oil consumption. No readily available bypasses can be found that can absorb that flow at a similar cost. There are partial alternatives, including the IPSA pipeline and Saudi Arabia’s East-West pipeline, but they would not even come close to filling the deficit should the Hormuz be closed en masse.

Source

It is a strait between Oman and Iran. Geography makes it so that any serious disruption in U.S.-Iran relations or of security conditions in the Gulf in general puts Hormuz back on the market’s agenda. Traders are all familiar with this: when there is a lot of Iranian tension, the futures positioning will always reflect the chokepoint risk, even if there is no incident per se.

Production Outages That Don’t Make the Front Page

Key Risk Factors Shaping Market Sentiment in 2026

Active Conflict Zones and Exposure to Infrastructure

The Persistent Iranian Supply Question

Infrastructure Concentration Risk

OPEC+ Internal Dynamics

Non-State Actor Activity and Shipping Friction

How the Market Prices Geopolitical Risk

Risk Premium in Practice

Geopolitical risk premiums in times of heightened Middle East tension have varied from around $4 to $10 per barrel, depending on the market participants’ views on the probability of actual physical supply disruptions in the case of Brent crude, according to S&P Global Commodity Insights. That’s a fairly broad window for economic trading, and it has a tendency to close up very fast when the tension subsides and without a supply event, which is the more common scenario.

The geopolitical risk premium factors analysts may consider are:

• The nearness to active conflict, producing fields, or the working export terminals.
• Production capacity that would be available to make up for the loss of production elsewhere.
• The availability and magnitude of the IEA’s strategic stockpiles to be tapped.
• Current tanker market conditions and the viability of an alternative route.
• Diplomatic messages sent by governments in the area, including the United States and other great powers
• Past examples of similar events, which have had identifiable supply impacts.

It is not easy to give exact weights to these inputs. Part of the reason for the price action to seemingly be different with comparable geopolitical events can be due to different analysts forming different conclusions from the same events.

Historical Supply Disruptions and Price Responses

The 2025-2026 entry is a more diffuse form of market pressure than those acute events listed above. It is not one particular incident, but rather sanctions enforcement and Iranian volumes kept low and shipping activity in the Red Sea continuing to cause friction in the transport system, which has kept transport costs elevated. The World Economic Outlook from the IMF pointed out that this type of persistent supply constraint is likely to have a longer-lasting impact on medium-term price expectations than acute supply shocks, which markets have historically been able to absorb and turn around in relatively short periods of time. Thus, a slow-burning risk premium can be more ‘sticky’ than a dramatic risk premium.

Broader Market Implications

Strategic Reserve Releases (SRRs) as a Counterweight

Geopolitical Risk Analysis: What It Does and Doesn’t Accomplish

Conclusion

Disclaimer

Western governments are pouring tens of billions of dollars into critical minerals projects as they attempt to reduce dependence on China for materials essential to clean energy, defence technology and advanced manufacturing.

But industry executives, analysts and investors are increasingly warning that poorly coordinated state-backed investment could create severe oversupply problems similar to past commodity booms that ended in market crashes.

The concerns come as countries including the United States, Australia, European Union and Japan accelerate efforts to build strategic reserves and expand production of rare earths and other critical minerals.

Governments Ramp Up Critical Minerals Spending

The United States has committed more than $20 billion toward critical minerals development through multiple financing programmes, including Project Vault, a strategic stockpiling initiative worth around $10 billion.

Australia has also allocated at least A$13 billion to support critical minerals projects and reserves through several government-backed programmes.

These investments are designed to secure supplies of metals used in electric vehicles, semiconductors, renewable energy systems, aerospace equipment and military technologies.

Particular attention has focused on rare earth elements, a group of 17 metals essential for producing powerful magnets used in advanced defence systems and high-tech manufacturing.

Although the global rare earths market was valued at only about $6.4 billion in 2024, combined Western financial commitments to rare earth projects have already exceeded that figure.

Fears Grow Over Potential Oversupply

Mining executives and analysts warn that aggressive subsidies and overlapping national strategies could eventually flood global markets with excess supply.

Brett Beatty of Resource Capital Funds said the biggest danger lies in governments pursuing independent strategies without coordination.

According to Beatty, simultaneous efforts to rapidly increase production could create volumes far beyond global demand, ultimately crushing prices and undermining the very industries governments are trying to build.

Analysts drew comparisons to historical commodity gluts, including Europe’s “butter mountains” of the 1980s, Russian aluminium oversupply and Australia’s wool crisis, where subsidies and state support distorted markets and triggered sharp price collapses.

Rare Earth Market Could Face Surplus Pressures

Consultancy Project Blue warned that several rare earth markets are already on track to move into surplus over the coming years due to expanding state-backed production.

However, analyst David Merriman said governments may still be able to avoid major imbalances if they carefully adjust subsidies, stockpiling programmes and guaranteed purchasing arrangements.

Industry leaders say current stockpiles remain relatively small, limiting immediate risks of market disruption.

Lynas Rare Earths CEO Amanda Lacaze recently said rare earth stockpiles around the world remain modest and are not yet large enough to destabilise markets.

Australian Resources Minister Madeleine King also argued that today’s critical minerals policies differ significantly from past commodity intervention failures because they are more targeted and linked to long-term industrial supply chains.

Global Coordination Emerging Among Western Allies

Concerns about duplication and oversupply are pushing Western governments toward greater policy coordination.

The Group of Seven is reportedly discussing the creation of a permanent secretariat focused on coordinating critical mineral strategies and ensuring continuity between rotating national presidencies.

Industry experts say such coordination could help prevent destructive competition between allied nations while supporting more stable investment planning.

Lessons From Congo and Indonesia

Governments outside the West have already experimented with aggressive intervention in mineral markets.

The Democratic Republic of the Congo boosted cobalt prices by introducing export quotas and stockpiling measures designed to increase mining revenues.

While the policy initially lifted prices, analysts warn prolonged restrictions could encourage manufacturers to seek alternative materials or suppliers.

Similarly, Indonesia dramatically expanded its dominance in nickel production after banning exports of raw nickel ore in 2020 to force domestic processing investment.

Indonesia’s production surged within just a few years, but authorities have since struggled with falling prices and oversupply, forcing Jakarta to tighten mining quotas and centralise export controls.

These examples highlight the difficulty governments face in balancing national industrial ambitions with long-term market stability.

Analysis

The global race for critical minerals is increasingly becoming a strategic contest shaped as much by geopolitics as by economics.

Western governments view supply chain independence as essential after years of relying heavily on China for processing capacity and rare earth production. The push is not simply about commercial competition — it is tied directly to national security, technological leadership and energy transition goals.

However, the very scale of state intervention now unfolding raises the risk of creating distorted markets. If multiple governments simultaneously subsidise production, guarantee prices and build stockpiles without coordination, supply could rapidly outpace actual industrial demand.

That scenario would likely trigger sharp price declines, weaken private investment and potentially create another boom-and-bust cycle in the mining sector.

At the same time, the market dynamics of critical minerals differ from traditional commodities. Many of these materials are essential for emerging technologies, and demand is expected to rise significantly over the next two decades as countries expand renewable energy infrastructure, battery production and semiconductor manufacturing.

This means governments are not only competing to secure supply today but also positioning themselves for future industrial dominance.

Another key challenge is that refining and processing capabilities remain heavily concentrated in China. Even if Western countries succeed in expanding mining output, they may still depend on Chinese infrastructure unless domestic processing networks are developed alongside extraction projects.

The growing emphasis on “friend-shoring” and allied supply chains reflects an attempt to address this vulnerability.

Industry experts also point to a more sustainable model emerging through byproduct extraction. Instead of building entirely new mines based purely on high prices, companies are increasingly looking to recover critical minerals from existing industrial operations, reducing the risk of uncontrolled supply growth.

Projects involving Alcoa, Sojitz and Trafigura illustrate how governments and corporations are experimenting with lower-risk approaches to expanding supply.

Ultimately, the success of Western critical minerals strategies may depend less on how much money governments spend and more on whether they can coordinate policies, manage supply carefully and build integrated processing ecosystems capable of competing with China over the long term.

With information from Reuters.

Here’s everything UK holidaymakers need to know before heading there this summer, from entry requirements to taxi use and dress code

Turkey remains a firm favourite amongst British holidaymakers, with thousands of people flying out to the country each year. Anyone planning a trip there this year is strongly advised to familiarise themselves with all current travel guidance and any warnings in place.

The UK Foreign, Commonwealth and Development Office (FCDO) provides a wealth of information on its website, covering countries across the globe. It’s an invaluable resource for anyone with holidays booked or considering travelling abroad, reports Chronicle Live..

If you’re heading to Turkey, there are several important things to be aware of. We’ve outlined the key travel warnings and advice below.

The Foreign Office states: “If you choose to travel, research your destinations and get appropriate travel insurance. Insurance should cover your itinerary, planned activities and expenses in an emergency.” It also cautions: “Your travel insurance could be invalidated if you travel against advice from the Foreign, Commonwealth and Development Office (FCDO).”

Warning over Turkey- Syria border

The FCDO advises against all travel to within 10km of the border with Syria due to ongoing fighting and an increased risk of terrorism. The FCDO states: “Fighting in Syria continues in areas close to the Turkish border and there is a heightened risk of terrorism in the region. Due to the ongoing conflict in Syria, roads in Hatay Province leading towards the border may be closed at short notice.”

Entry requirements

To enter Turkey, your passport must have an ‘expiry date’ at least 150 days beyond the date you arrive and at least one blank page. If you’re entering at a land border, ensure officials stamp and date your passport at the border crossing.

The FCDO says: “Check with your travel provider that your passport and other travel documents meet requirements. Renew your passport if you need to. You will be denied entry if you do not have a valid travel document or try to use a passport that has been reported lost or stolen.” You can visit Turkey without a visa for up to 90 days within any 180-day period, for business or tourism purposes.

Political situation

The Foreign Office states: “Regular demonstrations and protests are currently taking place in Istanbul and other cities across Turkey. Demonstrations may become violent. The police response has included use of tear gas and water cannons.

“Events in Israel and Palestine have led to heightened tensions in the region and in locations across Turkey. Demonstrations continue to occur outside diplomatic missions connected to the conflict in major cities, particularly Israeli diplomatic missions in Ankara and Istanbul. Avoid all demonstrations and leave the area if one develops. Local transport routes may be disrupted.”

Drink and food spiking

The FCDO warns: “Be wary of strangers approaching you to change money, or to take you to a restaurant or nightclub. If strangers offer you food and drink these could be spiked. Buy your own drinks and always keep sight of them.”

Holidaymakers are being cautioned that there have previously been instances of severe illness caused by alcoholic beverages containing methanol in popular tourist destinations across the globe. The FCDO says: “In Turkey, including Ankara and Istanbul, people have died or suffered serious illness after drinking illegally produced local spirits and counterfeit bottles of branded alcohol.

“Even small amounts of methanol can kill. It is not possible to identify methanol in alcoholic drinks by taste or smell. See Travel Aware Drink Spiking and methanol poisoning for information about how to reduce the risks. Seek urgent medical attention if you or someone you are travelling with show the signs of methanol poisoning after drinking.”

Taxis The website says: “Accepting lifts from drivers of unofficial taxis is highly risky. Find a registered taxi, note the registration number before entering and ensure the fare is metered. App-based taxis and pre-booked taxis are also widely available.”

Carry your ID

It is illegal not to carry some form of photographic ID in Turkey. Always carry your passport or residence permit. In some busy areas, especially Istanbul, the authorities may stop people for ID checks. There are also several police checkpoints on main roads across Turkey. Cooperate with officials conducting checks.

Dress code

Holidaymakers are also given guidance on appropriate attire. The FCDO advises people to “dress modestly if you’re visiting a mosque or a religious shrine to avoid causing offence”.

Stray dogs

The Foreign Office says: “Most towns and cities have stray dogs. Packs congregate in parks and wastelands and can be aggressive. Take care and do not approach stray dogs. If you’re bitten, get medical advice immediately. Rabies and other animal borne diseases are present in Turkey.”

Rules over sale of antiquities

Purchasing or exporting antiquities is prohibited. You could face a fine and a prison sentence of 5 to 12 years. Certain historical items found at local markets and in antique shops may be sold within Turkey but are forbidden from being exported. Always verify the status of antique items before making a purchase.

May 8 (Asia Today) — Japan is expanding imports of Russian Sakhalin-2 crude oil beyond a one-time emergency purchase, extending supply arrangements to multiple refiners and fuel networks around Tokyo Bay as concerns grow over instability in the Strait of Hormuz.

Japanese officials have reportedly asked Fuji Oil, an Idemitsu Kosan affiliate, to accept crude shipments from the Sakhalin-2 project after similar imports were arranged through Taiyo Oil.

The move comes as Japan seeks to reduce risks tied to Middle Eastern oil supplies while continuing to use sanction exemptions that remain in place for Sakhalin-2 energy resources.

The Sankei Shimbun reported Wednesday that the tanker Voyager, carrying crude oil from the Russian Far East project, was heading toward Fuji Oil facilities in Sodegaura, Chiba Prefecture.

Fuji Oil became a subsidiary of Idemitsu Kosan in November 2025 and operates a refinery that supplies petroleum products to the greater Tokyo metropolitan area.

According to ship tracking data cited by the newspaper, the Voyager departed Prigorodnoye Port in southern Sakhalin on April 24 and arrived near Imabari in western Japan on Sunday. The vessel later conducted unloading operations at Taiyo Oil facilities before departing for Tokyo Bay.

The tanker is expected to arrive in Sodegaura on Friday and leave Tokyo Bay on Saturday.

Idemitsu Kosan acknowledged the shipment was made at the request of Japan’s Ministry of Economy, Trade and Industry.

A company spokesperson told Sankei that the import did not violate sanctions and described it as part of efforts to diversify procurement sources and maintain stable fuel supplies.

Before halting most Russian crude purchases after Moscow’s invasion of Ukraine in 2022, Idemitsu sourced roughly 4% of its oil imports from Russia.

Analysts say the significance of the latest shipment lies not simply in Japan buying Russian oil again, but in Tokyo integrating Sakhalin-2 crude into a broader emergency procurement network involving multiple refiners.

Japan had already begun using the sanctions exemption amid rising Middle East tensions, but the latest deliveries suggest the mechanism is evolving into a more permanent contingency supply channel.

The development is also drawing attention in South Korea, which remains heavily dependent on Middle Eastern oil imports.

According to Korea National Oil Corp. data, South Korea imported about 1.03 billion barrels of crude oil in 2024, with 71.5% sourced from the Middle East. Saudi Arabia accounted for 32.2% of imports, followed by the United States at 16.4% and the United Arab Emirates at 13.7%.

Although South Korea has steadily increased imports of U.S. crude, its supply structure remains highly exposed to shipping disruptions through the Strait of Hormuz.

Energy analysts say South Korea may eventually need to move beyond reliance on strategic petroleum reserves alone and develop broader contingency planning that includes alternative suppliers, refinery compatibility and supply stability at major refining hubs such as Ulsan, Yeosu, Daesan and Incheon.

Japan’s latest actions suggest governments are increasingly seeking practical emergency supply options within existing sanctions frameworks rather than relying solely on traditional energy security measures.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260508010001814

SANTIAGO, Chile, May 8 (UPI) — An economic reform plan Chilean President José Antonio Kast announced to revive the country’s economy is drawing criticism over its potential short- and medium-term fiscal impact, as the International Monetary Fund lowered its growth projections for Chile.

The IMF’s World Economic Outlook report had estimated in mid-April that Chile’s gross domestic product would grow 2.4% in 2026 and 2.6% in 2027. However, the organization said this week it revised those projections to 2.2% this year and 2.5% in 2027 if external conditions and the country’s fiscal situation improve.

“Economic activity, driven by investment and exports in 2025, faces a period of heightened uncertainty,” the IMF said.

The report said higher copper production and prices support growth expectations, but warned of risks that include the crisis in the Middle East, rising oil prices and loss of domestic competitiveness tied to the sharp public spending cuts promoted by Kast.

The Chilean president’s plan includes proposals to reduce corporate taxes and cut bureaucracy in an effort to stimulate private investment. Congress is discussing tha proposal.

“Amid persistently high inequality, social discontent also remains a risk,” the IMF report said.

The IMF is not the only institution warning about the risks associated with the government’s National Reconstruction Plan.

Chile’s Autonomous Fiscal Council, an independent public agency tasked with monitoring the sustainability of fiscal policy, warned about the proposal’s possible impact on the country’s fiscal balance and public debt.

“The project commits fiscal spending with a high degree of certainty in the short term and reduces permanent revenue, while the positive effects depend on more uncertain future income associated with growth, which could lead to a deterioration in the fiscal balance if growth does not materialize at the estimated magnitude and speed,” the council said.

Jaime Bastías, director of the auditing school at Finis Terrae University, told UPI the IMF’s downgrade was “absolutely” expected because Chile’s central bank had already made a similar adjustment, while debate over financing the government’s proposal continues to intensify.

“The government’s plan can be an engine that helps us face the storm we are going through, but that is heavily conditioned on the state maintaining orderly public finances. The IMF says that if the proposed tax cuts are not offset through other channels, the country’s debt will grow too much, and that will create another problem,” Bastías warned.

Carlos Smith, a researcher at the Center for Business and Society Research at Universidad del Desarrollo, told UPI the IMF report shows that both external and domestic factors are likely to weaken household income and affect consumer spending.

“Consumption is one of the main drivers of Chile’s GDP. The IMF expects it to contract and that is already beginning to show, along with a very weak labor market. Chile is in a much weaker condition,” he said.

Smith said that although the IMF lowered its growth forecasts, the organization still appears optimistic about the long-term positive impact of the government’s proposed reforms.

“The impact will materialize more slowly than the finance minister expects. Therefore, the IMF is suggesting more efficient alternatives such as lower costs or more limited subsidies to create new jobs,” Smith said.

He added that while Ciles should adjust some aspects of the reform, he believes the plan is still moving in the right direction.

“I agree with the IMF that the proposal needs refinement and should focus on removing obstacles to investment projects without lowering the standards of our legislation or environmental protections. If that is achieved, I believe there is a possibility of reaching 3% growth by the end of the decade,” he said.

Bastías agreed, saying Chile could grow at 3% by 2030 if copper prices remain high, production increases and more private investment arrives.

“It is an optimistic scenario where we need to focus on stimulating those three factors. If that favorable future does not materialize, we will all pay the costs,” he said.

BEIRUT — A dozen U.S. Democratic Senators have called for the U.S. Central Command to answer questions about American coordination with Israel in declaring broad “ evacuation zones ” in Lebanon and Iran, alleging that the practice may violate international law.

The letter underlines how the Democratic Party — both its leaders and the base — has grown increasingly critical of Israel.

Since the beginning of the U.S.-Israeli war against Iran and the latest Israel-Hezbollah war in Lebanon, the Israeli military has regularly issued maps covering large areas of territory along with warnings telling all residents of the zones to flee. Israel had previously used a similar approach in Gaza.

The senators said the sweeping warnings have “been used to permanently displace people and destroy homes and towns” and that some civilians who refused to leave their homes in the areas have been killed by subsequent strikes.

The 12 senators led by Vermont Sen. Peter Welch, in a letter dated May. 4 to CENTCOM chief Adm. Brad Cooper that was provided to The Associated Press, state that Israel’s practice of unilaterally declaring mass evacuation warnings in Lebanon and Iran “likely contravene international laws the United States has helped develop around humane warfare.”

The other signatories include senators Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Sen. Tammy Baldwin of Wisconsin.

The letter asked the CENTCOM chief whether U.S. forces have coordinated military targets with Israeli forces during the recent war with Iran, whether they provided assistance or intelligence helping Israel’s military to impose the evacuation zones in Lebanon and Iran, and whether CENTCOM signed off on U.S. military support for the targeting of people or infrastructure in the evacuation zones. It also asked whether the U.S. military has reviewed the legality of the practice.

The Israeli military declined to comment when asked about the letter. CENTCOM did not immediately respond to a request for comment.

In the past, Israel has said the evacuation maps aim to keep civilians out of harm’s way. It says Hezbollah has positioned fighters, tunnels and weapons in civilian areas across southern Lebanon, from which it has launched hundreds of drones and missiles — without warning — into northern Israel.

A shift in the party stance

Observers said the move is part of a larger shift in the stance of Democratic Party leaders on U.S. military assistance to Israel. Democrats have also been critical of the Trump administration’s entry into the war on Iran alongside Israel.

The letter came nearly three weeks after more than three dozen Democrats supported an effort by Sanders to block arms sales to Israel, signaling a growing discontent in the party with Israeli Prime Minister Benjamin Netanyahu and the wars in Gaza and Iran.

The two resolutions to block U.S. sales of bulldozers and bombs to Israel were opposed by all Republicans and rejected 40-59 and 36-63.

Jon Finer, former deputy national security adviser under President Joe Biden, said the recent steps by Democratic senators reflect a “growing concern about Israeli conduct of various wars that cause civilian harm and U.S. complicity in that” across the spectrum within the Democratic Party.

Asked why the Democratic Party is taking these steps now and not at the time when the war in Gaza and the Israel-Hezbollah war broke out — when the Democratic Biden administration was in power — Finer said: “our operational integration with Israel appears to be growing, which is part of it, but the truth is the Democratic base has been moving in this direction for some time and Washington has been catching up.”

Andrew Miller, a former senior official on Israel and Palestinian Affairs at the State Department, said the letter “represents a shift among congressional Democrats moving from questions of the legality of Israeli military operations to concerns about the complicity of the U.S. military.”

“It demonstrates that Democrats are taking international law very seriously and that is a welcome development,” Miller said.

The evacuation zones

Israel has issued dozens of evacuation warnings in Lebanon since the latest Israel-Hezbollah war began on March 2. Over 1 million people in Lebanon have fled their homes during the war.

Israel has also issued similar warnings for Iranians, both during the 12-day Israel-Iran war last year and during the U.S.-Israeli war launched on Iran on Feb. 28. In one case last year they warned 300,000 people in Tehran, Iran’s capital, to evacuate.

On Wednesday, the Israel military’s Arabic-language spokesperson Avichay Adraee issued an evacuation warning to residents of 12 villages in southern Lebanon saying Hezbollah is using them to launch attacks. The warnings came despite a ceasefire that has been nominally in place since April 17, although Israel and Hezbollah have been carrying daily attacks since then.

The senators said the declaration of evacuation zones does not absolve Israeli and U.S. forces “from the absolute legal responsibility to determine that each individual person or civilian facility targeted by drones, jets, and gunfire is, in fact, a military target.” It said the use of the zones has been linked to “the deaths of thousands of civilians,” describing them as “kill zones.”

In response to questions by the AP last month, the Israeli military said it issues warnings by phone, text, radio broadcast, social media and leaflets dropped from the air, in accordance with the “principles of distinction, proportionality and feasible precautions” under international law.

Mroue writes for the Associated Press. AP writer Julia Frankel contributed to this report from Jerusalem.

Reporting from Sacramento — Few California Democrats have garnered more praise from the party’s various constituencies than Atty. Gen. Xavier Becerra, who has led the state’s charge against the administration of President Trump with 47 lawsuits on issues including immigration and healthcare.

But in recent months, Becerra has come under criticism from progressives and civil rights leaders for his reticence to support legislative checks on police use of force. That blowback could have ramifications for an ambitious politician who seems primed for ever-higher offices.

On Tuesday, Becerra announced that his office would not seek criminal charges against two Sacramento police officers involved in the fatal shooting of Stephon Clark, an unarmed African American man.

While that decision was not unexpected, it built on another recent controversy in which Becerra was sued by civil rights groups for not releasing use-of-force records. He later outraged many progressive allies by threatening legal action over police misconduct records he said were improperly released to the media.

Becerra has long walked a line of presenting himself as both a civil rights defender and a friend of law enforcement. But has also disappointed some supporters for not taking a stand in support of legislation that would toughen use-of-force rules as well as a proposal that the state Department of Justice routinely provide independent investigation of police shootings.

“A Democratic attorney general, in particular, is kind of torn between two worlds — the law enforcement entities and officials with which he or she must work and build credibility with, and Democratic constituencies that are highly suspicious of, if not downright hostile to, law enforcement,” said Garry South, a Democratic political consultant.

“Becerra is now caught between these two constituencies in a pretty public way,” said South, who managed Gov. Gray Davis’ 1998 and 2002 campaigns that portrayed Davis as a law-and-order Democrat. Sen. Kamala Harris faced the same pressures when she was attorney general, South said.

Capitol watchers see Becerra as a possible contender some day for higher office, including governor or U.S. senator if one of those jobs opens up.

But Becerra risks alienating key voters by his handling of the Clark case and his refusal to take a position on legislation making it easier to prosecute police officers, said the Rev. Shane Harris, a civil rights activist who has long served as a delegate for the California Democratic Party.

“He needs to realize that if he wants to be governor someday, he is going to need black votes and brown votes,” said Harris, president of the People’s Alliance for Justice. “If he has any aspirations, they just went out the window for now. This right here really took him backwards when it comes to the black vote in the state of California.”

Harris said Becerra could regain ground with minority voters by supporting tough reform legislation and embracing calls for the attorney general’s office to independently investigate all fatal police shootings.

Then-Gov. Jerry Brown appointed Becerra as attorney general in 2017 after he served 12 terms in Congress — a perch that provided little opportunity to be involved in state discussions of law enforcement oversight. Many activists did not know where he would stand on policing matters.

He won election last year with strong support from police groups, including big campaign checks from the California Statewide Law Enforcement Assn. political action committee, the California Correctional Peace Officers Assn., the Los Angeles Police Protective League, the Assn. of Orange County Deputy Sheriffs PAC, the Long Beach Police Officers Assn. and the Oakland Police Officers Assn. PAC.

Becerra is too close to the law enforcement community, said Melina Abdullah, a professor of Pan-African Studies at Cal State L.A. and a member of the Black Lives Matter movement.

“I think the complete unwillingness of the attorney general to intervene in the murders of black people by law enforcement — even under the most extreme circumstances, like Stephon Clark — demonstrates either a completely failed moral compass or a shameful submission to political cowardice,” Abdullah said.

On Tuesday, Becerra defended his actions in police use-of-force cases as “by the book” and based on the evidence.

He resisted the idea that his office should routinely “parachute in,” as he calls it, and investigate officer-involved shootings that are now reviewed by prosecutors in each of the state’s 58 counties.

“I don’t have the capacity and the resources to try to take over the work of 58 different D.A.s in this one shop,” Becerra said.

He said local prosecutors are “far closer” to what is going on in their communities.

He said he knows the African American community feels hurt by the shooting of Clark, but added “I think there is a lot of hurt in the Police Department too, because they are under a microscope and two of their fellow officers are now under a microscope.”

The attorney general’s actions on law enforcement issues have frustrated some people who supported his election last year, including civil rights attorney John Burris, who represented Rodney King in his civil rights lawsuit against the Los Angeles Police Department.

“I’m disappointed,” Burris said after Becerra’s announcement in the Stephon Clark case. “I supported him wholeheartedly [during the election]. I think I had higher hopes for him in the beginning.”

Burris said he has asked Becerra in the last few years to look at other police shootings and the attorney general has always sided with the local district attorneys in not pursuing action against officers.

“At the end of the day, the attorney general is law enforcement, and they have to work with law enforcement throughout the state,” Burris said. “That’s what makes it very difficult for him and others to be very critical of the local police unless the evidence is overwhelming.”

The Clark decision was not the only action that concerned some Becerra allies.

Becerra is under criticism from groups including the First Amendment Coalition, which sued him last month after he refused to release records related to investigations of shootings or confirmed cases of sexual assault by officers.

The lawsuit alleges that Becerra is required to turn over the documents by a law — SB 1421 — that was approved last year. Police unions have sued to keep records from being released.

The ACLU of Southern California is “very disappointed” that Becerra is refusing to make public records ordered released by the state Legislature, said Melanie Ochoa, a staff attorney for the group.

“It is unfortunate that the state’s top cop is sending a message that it is OK for agencies to deny the public access to information about serious police misconduct and uses of deadly force — particularly when we already have numerous courts that have decided that agencies must release this information,” Ochoa said.

Becerra’s actions on the release of records are defended by Robert Harris, a director with the Los Angeles Police Protective League.

Harris praised Becerra for withholding such records in the Justice Department’s possession while court cases deciding whether the law applied to investigations of incidents that occurred before this year were pending.

“I think that’s an appropriate decision until we have a definitive answer,” Harris said.

Becerra defended his actions on the release of police misconduct records, citing privacy laws.

“My progressive values are still there,” Becerra told The Times.

“If I have your Social Security numbers, and there’s a good chance I do in one of my databases … you would not want me to disclose it lightly,” Becerra added. “My job is to protect that privacy.”

In January, in response to a group of journalists in Berkeley, the state’s Commission on Peace Officer Standards and Training released a list of 12,000 names of police officers and job applicants who had been convicted of crimes.

Becerra later said the state office made a mistake in releasing the names to reporters for the Investigative Reporting Program at the UC Berkeley Graduate School of Journalism.

In a letter, he told the reporters to destroy the records, arguing that possession of the data was a criminal offense.

Becerra said this week that his letter to Berkeley was part of due diligence to enforce the law.

“Someone needs to ask the folks that are in possession of information that they are unauthorized to possess or use, what don’t they understand about the law that says, ‘You are in possession of information that you shouldn’t have.’ It’s like stolen property,” he said.

The attorney general also finds himself in the center of a storm of controversy over possible legislative measures to reduce excessive force.

Becerra refused Tuesday to take a position on pending legislation by Assemblywoman Shirley Weber (D-San Diego) that would make it easier to criminally prosecute law enforcement officers who kill civilians.

Police unions and chiefs are supporting a separate measure that would instead focus on internal department policies and training.

Becerra said he has withheld taking a position on the two use-of-force bills because he has not read them yet and he wanted to first complete the investigation into the Clark shooting, which he wanted to be seen as independent and fair.

“I have not gone through the bills to the point of making decisions,” Becerra told reporters at a news conference on the Clark shooting.

“I will get involved because it’s important,” he said. “I don’t intend to be AWOL when it comes to the discussion of how we write this new chapter.”

Coverage of California politics »

patrick.mcgreevy@latimes.com

Twitter: @mcgreevy99

The United Arab Emirates’ announcement of its withdrawal from OPEC and the OPEC+ alliance, effective May 1, 2026, represents a major strategic shift in the global energy market, with direct and significant implications for China, the world’s largest oil importer. The primary impact of this UAE withdrawal on China is the enhancement of Chinese energy security, as it will increase available supplies. The UAE will now be able to raise its production towards its target of 5 million barrels per day by 2027, without being bound by OPEC quotas. This expansion will provide China with a substantial and stable source of oil outside the constraints of production alliances. Furthermore, the UAE’s withdrawal from OPEC will impact China’s diversification policy, as China relies on imports to cover approximately 70% of its oil needs. The UAE’s departure will grant Beijing greater flexibility in purchasing from the spot market at potentially more competitive prices.

This also has a significant impact on import costs (prices) through prolonged downward pressure. The UAE’s increased oil production (up to 680,000 barrels per day above previous levels) is expected to put downward pressure on global Brent crude prices in the medium term (12-24 months), thus reducing China’s energy import bill. This could lead to short-term volatility, as, despite the potential benefit, the closure of the Strait of Hormuz (due to current regional tensions in April 2026) limits the immediate ability to capitalize on the UAE’s withdrawal from OPEC, since most of the UAE’s exports to China pass through this waterway.

China could benefit from the UAE’s withdrawal from OPEC by enhancing its capacity for financial and trade cooperation and expanding trade in local currencies, particularly the Chinese yuan. The UAE’s departure from OPEC could (facilitate the expansion of oil trade agreements) in rubles, rupees, and yuan, moving away from OPEC’s traditional dollar pricing. This aligns with China’s drive to internationalize the yuan. Such a move could boost joint investments, given China’s existing stakes in UAE oil concessions. With Abu Dhabi freed from restrictions, these Chinese investments could generate higher returns through increased production. Furthermore, China might leverage the UAE’s withdrawal from OPEC to bolster the strategic and geopolitical value of weakening OPEC’s influence. This withdrawal diminishes OPEC’s ability to control global supply, which benefits major consuming nations like China by reducing the likelihood of price shocks resulting from collective production cuts.

In this context, Chinese discussions and analyses have intensified, examining the potential benefits for China from the UAE’s withdrawal from OPEC. Chinese experts are analyzing the likelihood and impact of such a move should it materialize, particularly given the UAE’s increasing production capacity and its desire for greater flexibility. If we assume the UAE’s withdrawal from OPEC is indeed the case, China stands to be the biggest beneficiary for the following reasons. First, it would break the dominance of the petrodollar. The departure of a player the size of the UAE from traditional OPEC constraints opens the door wide to bilateral agreements for pricing oil in digital yuan (or Chinese yuan), thus supporting Beijing’s strategy of internationalizing the yuan to reduce its dependence on the Western financial system (SWIFT). In addition to the increased Chinese-Emirati supply, since Chinese companies such as CNPC and CNOOC hold stakes in oil concessions in Abu Dhabi, the UAE’s release from OPEC production quotas means these companies can increase production and secure China’s growing energy needs at preferential prices and with favorable terms. This facilitates the revitalization of joint UAE-China investments, allowing for deeper Chinese capital flow into the UAE’s refining and petrochemical sector. The exchange of finished goods and crude oil within an economic cycle based on local currencies reduces conversion costs and the risks associated with dollar fluctuations. This supports China’s policy of moving towards BRICS+. As the UAE is a member of the BRICS group, any move away from traditional OPEC frameworks aligns with the group’s overall direction to create a parallel financial system that supports the ruble, rupee, and yuan. This scenario, if it were to occur, would transform the relationship from one of buyer and seller to a comprehensive strategic partnership, making energy the driving force behind the new financial system that China seeks to lead.

Accordingly, the UAE’s withdrawal represents a strategic gain for China in terms of increased supply and potential cost reductions, but maximizing the benefit remains contingent on the stability of shipping lanes in the Arabian Gulf.

Famine was confirmed in two places in 2025 – areas of the Gaza Strip and Sudan – the first such dual confirmation since formal famine reporting began, according to the Global Report on Food Crises (GRFC) 2026.

The annual report, produced by a coalition of 18 humanitarian and development partners, found that acute food insecurity remained widespread in 2025.

Across 47 countries and territories experiencing food crises, 22.9 percent of their populations – or about 266 million people – experienced acute food insecurity last year, a marginal rise from 22.7 percent in 2024 but nearly double the 11.3 percent recorded in 2016.

The proportion of analysed populations facing acute hunger has now stayed above 20 percent every year since 2020. In absolute terms, the number of people affected has grown from 108 million in 2016 to 265.7 million in 2025, having peaked at 281.6 million in 2023.

The GRFC cautioned that the slightly lower headline figure compared with 2024 mainly reflects a reduction in the number of countries covered – from 53 to 47 – rather than any real decline in needs.

Famine, catastrophe and emergency

Famine – the most extreme classification under the hunger-monitoring Integrated Food Security Phase Classification (IPC) system – was confirmed in parts of the Gaza Strip and Sudan in 2025. The risk of famine remained in other areas of Gaza, Sudan and South Sudan, and those projections extended into 2026.

According to the IPC, famine is when:

• At least 20 percent of households face extreme food shortages.
• Acute malnutrition affects more than 30 percent of the population.
• The death rate due to starvation or hunger-related causes exceeds two deaths per 10,000 people per day.

Six countries and territories had populations facing “catastrophic conditions”, or Phase 5, the highest level in the IPC’s classification of food insecurity. They numbered 1.4 million people, a more-than ninefold increase since 2016.

The Gaza Strip was the worst affected, with 640,700 people facing famine conditions, equivalent to 32 percent of its population, the highest share recorded globally. Sudan followed with 637,200 people, or 1 percent of its population.

Four other countries recorded catastrophic food shortages among specific groups of people: South Sudan – 83,500 (1 percent of the population), Yemen – 41,200 (0.1 percent), Haiti – 8,400 (0.1 percent) and Mali – 2,600 (0.01 percent).

Additionally, more than 39 million people in 32 countries were in Phase 4, or emergency conditions, representing 3.8 percent of the population analysed, a marginal increase from 2024.

Conflict remains the main driver of hunger

Conflict and violence were the primary drivers of acute food insecurity in 19 countries where 147.4 million people were affected. They represented more than half of those facing acute hunger globally.

Weather extremes were the primary driver in 16 countries, affecting 87.5 million people, while economic shocks led in 12 countries, with 29.8 million people affected.

Against that backdrop, humanitarian and development financing for areas facing food crises declined in 2025, falling back to levels last seen in 2016-2017, the report said.

As for 2026, the report said that based on a partial picture as of March, severity levels remain critical in multiple contexts. It added that the escalation of conflict in the Middle East exposes food-crisis countries to direct and indirect risks of global agricultural and food market disruptions.

A generation of malnourished children

An estimated 35.5 million children were acutely malnourished in 2025 across 23 countries experiencing nutrition crises, including just under 10 million with severe acute malnutrition, the most life-threatening form.

A further 25.7 million children suffered from moderate acute malnutrition. About 9.2 million pregnant and breastfeeding women were also acutely malnourished across 21 countries with available data.

Displacement is concentrated in food-crisis countries

The number of forcibly displaced people in the 46 countries covered fell slightly in 2025 to 85.1 million.

About 62.6 million of them were internally displaced across 34 countries, and 22.5 million were refugees and asylum seekers in 44 countries.

Without a sustained push to address the structural drivers of hunger, the world’s most fragile countries will continue to bear a disproportionate share of the global hunger burden well into 2026, the report concluded.

A major fire at a key refinery in Australia refinery has disrupted fuel production, raising fears of shortages as supplies are already strained by the Iran war.