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.
Edinburgh Airport has said operations have no returned to normal (Image: undefined via Getty Images)
Flights were delayed at two major UK airport because of jet fuel supply issues on Sunday evening. Passengers on ten flights flying out of Glasgow and Edinburgh airport faced delays.
The two Scottish airports have now said their operations are returning to normal after issues with the supply of jet fuel on Sunday evening.
The situation around the Strait of Hormuz, where shipping has been severely constrained since the outbreak of the Iran war, has led to a reduction in the global supply of jet fuel. However the issues at the two Scottish airports are understood to be linked to a shortage in drivers for fuel lorries rather than the global market.
A spokesperson for Edinburgh Airport said 10 flights were delayed on Sunday, but deliveries had resumed on Monday.
A spokesperson for Glasgow Airport said: “A short‑term staffing issue has affected one of the fuel suppliers used by airlines at the airport, with work underway to return stock levels to normal. There have been no related flight cancellations, and the airport remains fully operational.”
The spokesperson said fuel stocks are now returning to normal and there was no widespread disruption despite delays to some flights. Jet fuel is purchased by airlines, while the airports provide storage and infrastructure.
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
The area is responsible for about one-third of the world’s crude production. That should make it significant in and of itself. What makes matters worse is that export infrastructure is concentrated in a handful of terminals, pipelines, and maritime corridors where a disproportionately large share of oil is exported. The disruption of any of them (even for a moment) reduces a large supply signal to an extremely short time frame.
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.
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
The issue of the supply is something that generally doesn’t get the same kind of attention it should get, but the clearest example of this recurring issue is Libya. In recent years, internal political squabbles about how to divide up oil revenues have led to several production shutdowns that have temporarily increased the tightness of the light sweet crude grades refined by European and Asian plants. The disruptions are likely to persist when there is no political agreement, and the pattern is robust. In recent years, Iraq’s export pipeline to the North through Turkey has also been down for extended periods of time. These relatively inconspicuous disruptions can add up and impact medium-term supply dynamics, though not necessarily have the same impact as a more conspicuous incident.
Key Risk Factors Shaping Market Sentiment in 2026
The Middle East is a geopolitical risk that has many variables. It’s a combination of interwoven pressures that work in various ways and to varying effects on the length of the price impact. The issues that currently have the greatest attention of serious analysts are generally of three types:
Export infrastructure and production infrastructure are currently under physical threat to production.
Sanctions regimes and the dynamics of their enforcement.
Disruption of shipping routes and attendant disruption of the trade economics.
Everything is unique, and sometimes they are not in the same direction at the same time. That’s part of what makes the current situation more complicated than any one risk headline implies.
Active Conflict Zones and Exposure to Infrastructure
The latest example of large-scale infrastructure targeting is the 2019 attack on Saudi Aramco’s Abqaiq and Khurais facilities in the country, which was carried out using drones and missiles. The loss in output occurred temporarily, amounting to about 5.7 million bpd, the largest sudden supply shock in modern oil market history. The recovery was quicker than many expected, partly because of the operational robustness of Aramco and partly because the situation was swiftly contained diplomatically. But the event has permanently changed the way markets view the vulnerability of infrastructure in the Gulf, and that repricing has not been complete.
The Persistent Iranian Supply Question
Iran’s petroleum sales have also been sustained in the face of sanctions, largely via Asian markets out of reach to Western sanctions. A full-fledged deal between Tehran and Western governments has yet to be hammered out, as of early 2026. That has left volumes of Iranian supply in a limbo of sorts: they could be rapidly reduced by stepped-up enforcement, and they could be dramatically increased by a change in diplomatic circumstances. Both of these results can have significant price consequences, and even the uncertainty can be a factor in the market without a clear decision.
Infrastructure Concentration Risk
The concentration levels in Saudi Arabia’s export system warrant a more significant focus than is generally found outside of export specialist circles. Abqaiq processes and stabilizes a huge percentage of Saudi crude before it is shipped to export terminals, removing the sulfur from it. That kind of ‘single point of failure’ is not typical in most industrial supply chains. In the case of oil, it’s a structural aspect of the market and one that has been proven, not just thought.
OPEC+ Internal Dynamics
However, OPEC+ compliance has been quite lackluster at times, notably from Iraq and Kazakhstan, which have had a history of overproduction. This gives rise to an everlasting discrepancy between OPEC+ declarations and the actual supply data. For analysts, the bottom line is that it is important not to take production decisions at face value but to also consider the track record of implementation once a deal has been agreed on to see what the real supply impact was.
Non-State Actor Activity and Shipping Friction
Since late 2023, the Houthis have started to attack commercial shipping vessels in the Red Sea more frequently, and these attacks have persisted through 2025. What those disruptions drove home is that it’s not necessary to blow a wellhead to impact oil market economics. A round-the-Cape voyage will increase the time in transit by about ten to fourteen days, as well as the fuel costs. During periods of increased Houthi activity, insurance costs for tankers traveling in the Gulf area skyrocketed. Both impacts are not a direct factor in the crude benchmarks, but both impact the effective landed cost of Middle East barrels in destination markets.
How the Market Prices Geopolitical Risk
Knowing the difference is important, as geopolitical events do not affect oil prices in a single manner. Some effects are immediate and visible: a surge in the price of Brent futures within minutes of an incident report. Others come more slowly, via changes in freight rates, changes in the repricing of insurance, and changes in buyer behavior, which may take days or weeks to be reflected in trade flow data. The rate of these impacts varies, and so do their effects.
Then there is the issue of what the market “already” had in place whether there was an event or not. When there is a constant regional tension, there is usually some risk premium in prices. The incremental market move may therefore be less than anticipated when an event then reinforces concerns, the surprise element of the event, which is typically the one that produces the biggest market moves, is already discounted.
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 following table shows some of the more significant supply events that took place in the Middle East and the approximate market impact. The trend of most entries was that the first price movement has been greater than the actual physical supply effect, at times much greater, and then it has partially retraced to a more stable situation.
Event
Year
Estimated Supply Impact
Approximate Brent Price Reaction
Abqaiq/Khurais Attacks (Saudi Arabia)
2019
~5.7 mb/d temporary loss
~15% intraday spike
Libyan Civil War Output Collapse
2011
~1.4 mb/d reduction
~$20/bbl over several weeks
U.S. Re-imposition of Iran Sanctions
2018
~1-1.5 mb/d reduction
~15% sustained over several months
Iraq-Northern Field Disruptions
2014
Partial northern output loss
~$10/bbl elevated premium
Houthi Red Sea Disruptions
2023-24
Rerouting; limited direct supply loss
Moderate – primarily freight cost impact
Iran Sanctions + Red Sea Friction
2025-26
~0.8-1.2 mb/d constrained Iranian output
Persistent $4-8/bbl risk premium in Brent
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
Crude oil benchmarks are not the only place where supply risk from the Middle East exists. It extends out to related markets in ways that are not always apparent when the world’s focus is on the Brent or WTI headline price.
The second-order victim is likely to be refined product markets. In times of crude supply shortages or increased uncertainty, refinery margins and regional product availability may be affected to a greater extent, and the effects on end consumers may be magnified, especially in regions where there is little local refining or a high concentration of import logistics. The energy crisis of 2022 in Europe was a prime example of how the upstream pressure to supply energy flows through the downstream more quickly than most market players would have thought.
Other segments of the market that are impacted by increased supply risks in the Middle East are:
Tanker freight rates, which can also rise sharply without reference to crude prices during times of major-scale rerouting.
In oil-dependent economies, currency markets can be affected by changes in the prices of the oil that the state supplies, which change expectations of fiscal revenue and sovereign credit risk.
LNG markets with some short-term fuel switching demand in the exposed economies as a result of regional geopolitical pressure.
In agricultural commodity markets, where there is known overlap between energy input costs and food production, processing, and transport economics
Strategic Reserve Releases (SRRs) as a Counterweight
During the IEA’s coordinated strategic reserve release in 2022, it was seen that policy tools are in place to mitigate short-term supply shocks and that they can be implemented on a material scale when political conditions are right. However, there are drawbacks to those processes. During that time, reservoir levels were lowered significantly, and a rebuild takes time. There are also doubts about the effectiveness as a deterrent because, over time, markets will factor in the possibility of a release during the next big disruption event, effectively canceling the effect of a release in advance.
Geopolitical Risk Analysis: What It Does and Doesn’t Accomplish
It’s easy to fall into the temptation, because of the amounts of money potentially involved, of viewing geopolitical risk analysis as a predictive tool. It generally lacks it there. It’s actually helpful for comprehending markets and its actions, as well as for charting structural weaknesses that are price-relevant. What it doesn’t do well is tell you when an event will happen, or how big the market’s reaction will be when it does.
Instead of getting lost in qualifications, the specific limitations should be called out:
Escalation and de-escalation are non-linear and unpredictable to a great extent. Conflict situations that appear to be intractable can be solved in a flash, and stable times can fall apart in an instant. Both directions remain silent and don’t herald themselves.
When demand for a commodity is the same, the market price may be quite different in the two market conditions. There are interactions between the geopolitical trigger and positioning, sentiment and open interest that are not modelable in advance.
Secondary effects (such as freight repricing, product supply shifts and insurance cost changes) happen at varying rates to the initial crude price move, and thus the total impact of the market is more difficult to gauge in real time.
Analytical path dependency can occur when geopolitical narratives set up a framework that later information gets filtered through, without being recognized as such.
All this does not negate the analysis. It’s about calibration and about honesty when the power of explanation runs out, and speculation sets in.
Conclusion
Middle East supply risk is not a succession of shocks that will come and go and be completely addressed but rather a structural state in global oil markets. The combination of production weight, geographic concentration of export infrastructure, and political complexity of the region always comes with a certain level of supply uncertainty as a base case. The level of that uncertainty and the extent to which that uncertainty is priced into securities on a given day are what change.
The hard part for traders, analysts, and energy investors is not recognizing that there is risk – that’s obvious. It’s gaining a good enough sense of what matters most at a given moment, what the big picture supply-demand dynamics are, and at what point a careful study of the facts begins to look like well-informed guesswork. The clear understanding of that boundary is, in fact, probably more valuable than any single analytical framework that can be applied to the boundary.
Disclaimer
This article is provided for informational and educational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy, sell, or hold any financial instrument, commodity, or derivative product. Trading in energy markets, including crude oil futures, CFDs, and related instruments, involves substantial risk of loss, including the possible loss of capital invested. Past market behavior and historical price patterns referenced in this article are not reliable indicators of future performance. Geopolitical developments described may not materialize as anticipated or may evolve in ways that differ materially from historical precedent. Readers should conduct their own independent research and consult a qualified financial professional before making any investment or trading decisions. Nothing in this article should be interpreted as a trading signal, directional market recommendation, or endorsement of any specific trading approach.
The rise of artificial intelligence (AI) and the move toward a green transition built on renewable energy are fundamentally restructuring the global economy. While unleashing unprecedented opportunities, these developments also provide new geopolitical weapons due to the unequal distribution of critical minerals, in particular rare earths, the advanced technology and expertise involved in manufacturing, and the omniscient and inexorable role of the resulting products like semiconductors and batteries for the operation of today’s technologised societies. Thus, countries like China and the United States (US) increasingly seek to safeguard national access to these crucial components and products. This weaponization has implications for global business interests, supply chains, technological development and existing geopolitical tensions in the Middle East and between the US and China.
Semiconductors—the new oil?
Semiconductors, or advanced chips, have been likened to the oil of the 21st century. Just as in the 20th century, oil formed the basis for global economic activity, semiconductors form crucial parts of everything from critical infrastructure like 5G data networks, military technology like missiles and AI data centers, to smartphones, fridges and electric vehicles. Indeed, the semiconductor market, growing rapidly since the launch of large language AI models in 2022, is projected to hold a value of $1 trillion by 2030. Hence, whoever controls the supply of semiconductors holds the power to bring rivaling economies to a standstill. This capability is reinforced by the fact that advanced microchips, and the rare earths contained in them, lack ready substitutes.
Assuredly, oil still offers geopolitical leverage—brought to the fore by the current energy crisis resulting from the closure of the Strait of Hormuz. Yet, semiconductors offer a more potent geopolitical weapon. For example, European sanctions on Russian oil and natural gas following the invasion of Ukraine in 2022 has been largely ineffective in crippling the oil-reliant Russian economy, as Russia has been able to find alternative supply routes like the Caspian Sea and alternative buyers such as India, Türkiye and China. By contrast, semiconductor supply chains are more concentrated due to differential geography, and economic, technological and intellectual capital. For example, Taiwan produces over 90% of the world’s advanced chips, while China controls 60% of global rare-earth production, and 90% of mineral refinement. Similarly, the US enjoys supremacy in semiconductor manufacturing equipment (SME) and expertise, while the Netherlands is the world’s sole producer of extreme ultraviolet lithography required to imprint circuits on semiconductors. Hence, the highly concentrated supply chains of semiconductors gives a handful of countries significant strategic leverage as countries are willing to go far to secure access to these crucial components.
Capitalising on critical mineral supply
This power is reinforced by the fact that the majority of the planet’s critical minerals—such as copper, cobalt and lithium—used in semiconductors and batteries are concentrated in developing countries in Africa and Latin America like Brazil, Chile and the Democratic Republic of Congo (DRC). Thus, the capital-intensity of mineral extraction has allowed major powers like the US and China to expand their influence over supply chains through massive investment in the mining industries of these regions. Hence, supply chains are further concentrated in the hands of a few states, enhancing the weaponisability of these resources. This is bolstered by the rarity and geographic disparity of these elements, meaning that countries cannot easily find substitutes or alternative suppliers for these critical resources, should the aforementioned mineral ‘gatekeepers’ choose to wield their strategic leverage and restrict supply.
Global business caught in the crossfire
This development subjects international business activity, especially within emerging technologies like AI, to geopolitical tensions. For example, the US introduced export controls in 2022, banning US semiconductor company Nvidia from exporting its advanced H2000 chips to China to protect US technological dominance. And Nvidia is not an isolated case—in the last few years, the amount of US companies on the Commerce Department’s Entity List restricting exports has quadrupled. In effect, US companies are losing global competitiveness and access to China—one of the biggest markets in the world. This effect might be hard to reverse. Although the Trump administration relaxed export restrictions in early 2026, no Nvidia chips had arrived in China by mid-May. Part of the reason is that China in response to US restrictions has built up its domestic production, and legally favored domestic chips producers like Huawei to reduce its strategic vulnerability to foreign powers. For similar reasons, China prevented US-based Meta in 2025 from buying up Manus, a Chinese-founded AI company. Thus, business interests are highly susceptible to the weaponisation of concentrated critical supply chains in the geopolitical rivalry between US and China.
Semiconductors—beyond oil
Hence, semiconductors and related products may not simply be the economic and strategic, 21st-century equivalent of 20th-century oil, but may indeed hold greater geopolitical leverage than oil ever did. While the US dominates global oil production, China does not have to import oil from its geopolitical rival at the expense of Chinese strategic power—despite China relying on imports for over 70% of its oil—as diversified global energy markets allow for alternative energy sources like coal and natural gas, and alternative suppliers like the UAE, Iran and Qatar. By contrast, China’s ability to manufacture the most advanced semiconductors without the currently unique US SME is highly limited, with Chinese semiconductor development 3 years behind the US. Consequently, China accounts for over half of the semiconductor exports of US-allied Taiwan.
Taiwan in the crossfire
This in turn increases the strategic importance of the Taiwan dispute. While China has long claimed Taiwan to be part of China, the US endorses Taiwanese independence. The importance of semiconductors has cemented this conflict, with China desiring reunification to gain control over global semiconductor manufacturing, while the US for the same reason favors Taiwanese independence from China to maintain US access to its semiconductor supply, in extension of current efforts to induce TSCM to offshore its production to the US, and reduce semiconductor exports to China. Similarly, China has leveraged its global dominance of refined rare earths and battery production by introducing export restrictions on batteries, refined critical minerals, and rare earths in response to US SME restrictions, exploiting the fact that the US has limited ability to employ its SME to manufacture semiconductors without these Chinese inputs. In response, the US and its allies are scrambling for alternative access to critical minerals by expanding trade partnerships with mining countries like the DRC, investment in battery-production, and by launching Project Vault, a $12-billion investment to create a national critical minerals reserve.
The weaponisation capacity of semiconductors has only begun. As countries are approaching the deadlines of net-zero emissions goals outlined in the Paris Agreement, increased dependency on renewable energy will increase susceptibility to global supply chains for batteries, rare earths and semiconductors for products like EVs, solar panels and energy storage.
The entrance of POSCO Tower Yeoksam in Seoul, photographed May 22, 2026. Photo by Hyojoon Jeon / UPI
May 22 (Asia Today) — POSCO International said Friday it plans to enter the U.S. rare earth separation, refining and permanent magnet business through a joint investment with ReElement Technologies.
The South Korean trading company said it signed an agreement with the U.S. firm to pursue a joint venture for rare earth separation and refining production in the United States.
The signing ceremony was held in Washington, D.C., with POSCO International CEO Lee Kye-in, ReElement Technologies CEO Mark Jensen, U.S. government officials and South Korean Embassy officials in attendance.
The companies plan to jointly invest $200 million to build a rare earth separation and refining plant with annual capacity of 6,000 tons. They also plan to develop an integrated production complex that can later produce permanent magnets.
Rare earth materials are used in electric vehicle motors, robots and artificial intelligence data centers. Heavy rare earths such as dysprosium and terbium are considered essential for high-performance permanent magnets.
POSCO International will lead management of the joint venture, while ReElement Technologies will provide core separation and refining technology.
The venture plans to produce neodymium-praseodymium oxide, dysprosium oxide and terbium oxide. It will first build annual production capacity of 3,000 tons before expanding to 6,000 tons.
Trial production is scheduled for the fourth quarter of 2027, with mass production targeted for 2028.
POSCO International said the project is part of its broader plan to build an integrated value chain from raw material sourcing to separation and refining, permanent magnets and electric vehicle motor cores.
“This joint venture is more than the establishment of a refining plant. It is the starting point for building a critical minerals value chain in the United States,” Lee said.
EU Industry Commissioner Stéphane Séjourné called for EU businesses to diversify their suppliers on Friday as trade tensions with China ramp up.
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The comments come as Beijing has made repeated threats towards the EU in recent weeks, while Brussels seeks to strengthen its legislation against its Asian rival.
Last year, China restricted exports of rare earths and chips, strategic for the EU’s green technologies, defence and automotive industries.
“Do not make 100% of your supplies in one country,” Séjourné told EU businesses after a meeting with the EU’s 27 trade ministers in Brussels. He added: “The global geopolitical situation shows that your ability to provide yourself abroad must also depend on other types of countries and also on European production.”
The European Commission has so far issued guidance to EU companies and Séjourné signalled that if they did not move, the EU executive would “perhaps have to move to the next step.”
Measures force car producers to diversify
Internally, the Commission is already working on a proposal to force car producers to source chips from multiple suppliers, Euronews has revealed.
Last year, a spat between the Dutch government and the Chinese chip company Nexperia, based in the Netherlands, caused shortages of chips for EU industries after Beijing blocked exports in retaliation.
EU Trade Chief Maroš Šefčovič told Euronews at the time that China was “weaponising” critical supplies for EU industry.
Brussels and Beijing have been at loggerheads since the EU presented several proposals restricting China’s access to the EU single market.
The so-called “Industrial Accelerator Act” aims to favour EU companies in public procurement and impose strict conditions on Chinese investments in the bloc. Meanwhile, a Cybersecurity Act could exclude Chinese telecoms companies from the EU market.
Beijing has directly threatened the EU with retaliation if it moves forward with those proposals. China repeated the threats after media reports about potential EU measures against cheap Chinese imports flooding the EU market.
An orientation debate is set to take place in Brussels between EU commissioners on 29 May to decide on the EU’s strategy as its trade deficit with China becomes more critical month after month.
Aviation sector sources told the that consumers are exercising caution(Image: skynesher via Getty Images)
Holidaymakers planning trips to Mediterranean hotspots are being met with an enticing development as airlines grapple with concerns over possible jet fuel shortages this summer.
Ticket prices on major routes to destinations across Spain, Italy and France have tumbled by double digits – and in some instances drastically – as carriers attempt to entice hesitant travellers into making bookings. Costs have declined by 10% or more on 15 sought-after routes, including flights from Heathrow Airport to Nice, Manchester to Palma, and Gatwick Airport to Barcelona.
In the most striking case, fares between Milan and Madrid have nosedived by as much as 44%, according to analysis by the Financial Times.
The unexpected price cuts arrive as airlines wrestle with a decline in bookings, with numerous travellers postponing holiday arrangements amid warnings that jet fuel supplies could face disruption following tensions related to the closure of the Strait of Hormuz.
Industry insiders say consumers are holding fire, creating a high-stakes “confidence game” as airlines cut prices aggressively to fill seats before the peak summer holiday period.
One airline boss compared the present climate to the uncertainty experienced during the Covid pandemic, cautioning there remains “a lack of visibility” over how the situation will develop.
Analysis of fares between early April and early May reveals prices dropping on more than half of the busiest routes to southern Europe, particularly to seaside destinations around the Mediterranean. Significantly for families, the steepest reductions are being witnessed on traditional summer routes, with eight of the top 50 routes recording decreases of 20% or more. In contrast, only a small number of routes have experienced similarly sharp rises.
Travel industry insiders told the FT that holidaymakers were “freezing in the headlights”, resulting in them making reservations later than normal or opting for UK getaways instead.
Research indicates one in five Britons has already switched an overseas holiday for a domestic break this year, with another fifth contemplating doing likewise.
Airlines are now being compelled to boost demand through reduced fares even as fuel expenses climb and timetables are scaled back. Approximately two million seats have already been removed globally from May timetables, reflecting both elevated costs and weaker demand.
Low-cost carriers including easyJet and Wizz Air have acknowledged that passengers are making bookings later, while also seeking to reassure travellers.
EasyJet has committed not to impose fuel surcharges on existing package reservations, while British Airways has guaranteed prices will not increase after holidays are settled.
Despite the unpredictability, industry insiders emphasise the overwhelming majority of flights are still anticipated to run. Even in a worst-case scenario, only approximately 5% to 15% of flights could be axed and passengers would probably be transferred onto alternative services.
May 4 (UPI) — Retail giant Amazonannounced Monday that it will open its supply chain networks to other businesses as part of its new Amazon Supply Chain Services, which includes freight, distribution, fulfillment and shipping aspects.
Stocks for FedEx and UPS, both competitors in this field, sank about 10% Monday afternoon in response, CNBC reported, while Amazon stocks stayed steady.
The announcement from Amazon said the company has built “one of the most reliable and efficient supply chains on Earth — from freight that moves cargo across air, land and sea, to fulfillment centers that pick and pack millions of orders a day, and a parcel shipping network that delivers packages every day of the week.”
It listed the company’s more than 80,000 trailers, more than 24,000 intermodal containers and more than 100 aircraft operated with carrier partners and said that services will be offered to businesses of all types and sizes.
As part of Monday’s announcement, Amazon also announced that companies Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters have signed on to use Amazon Supply Chain Services.
The major AI company Anthropic is exploring a potential partnership with the British semiconductor firm Fractile to secure a steady supply of chips for custom inference and reduce the significant overheads associated with current semiconductor solutions.
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According to reports, these talks represent a strategic effort by the San Francisco-based firm to decrease its dependency on Nvidia whilst enhancing the speed and efficiency of its current and next-generation models.
As the global demand for generative AI capacity continues to climb, the financial burden of the hardware required to run these systems has become a primary hurdle for developers.
Anthropic, which has received multi-billion-dollar investments from both Amazon and Google, currently relies heavily on Nvidia’s H100 units alongside custom processors provided by its cloud partners.
However, the high market price and limited availability of these industry-standard chips have squeezed profit margins, prompting firms to look elsewhere.
According to industry analysts, a deal with a specialised firm like Fractile could allow Anthropic to exert greater control over its technical infrastructure.
This strategy reflects a broader trend among tech giants, including Microsoft and Meta, who are increasingly moving away from general-purpose chips in favour of internal or boutique designs.
A shift in memory architecture and a boost for British technology
Founded in 2022 by Oxford PhD Walter Goodwin, Fractile has gained significant attention for its unconventional approach to processor design.
Unlike standard chips that must constantly shuttle data between the processor and separate memory modules, Fractile’s “memory-compute fusion” architecture keeps data directly on the chip using static random-access memory, or SRAM, which does not need to be refreshed.
According to the British start-up, this method can run large language models up to a hundred times faster than existing hardware while lowering operational costs by 90%.
While these performance claims are impressive, the technology is still in the development phase.
Fractile has not yet launched a commercial product, and its specialised chips are not expected to be ready for full-scale data centre deployment until 2027.
Despite the long timeline, the start-up is reportedly in negotiations to raise $200 million (€170.5m) in funding at a valuation exceeding $1 billion (€853m).
The potential partnership highlights the growing significance of the UK’s semiconductor sector on the world stage. If a formal agreement is reached, Fractile could become Anthropic’s fourth major chip supplier, joining the ranks of Nvidia, Google and Amazon.
According to market reports, the discussions remain at an early stage and no binding contract has been signed.
However, the interest from a major player such as Anthropic suggests that in the AI race, the ability to deliver faster and cheaper compute power is the defining factor.
Vietnamese President and General Secretary of the Communist Party To Lam (R) shakes hands with Japanese Prime Minister Sanae Takaichi (L) during their meeting at the Presidential Palace in Hanoi, Vietnam 02 May 2026. Photo by LUONG THAI LINH / EPA
May 3 (Asia Today) — Japan and Vietnam agreed to deepen cooperation across key economic security sectors, including energy, critical minerals, semiconductors, artificial intelligence and space, as Tokyo seeks to strengthen supply chains and reduce reliance on China.
Prime Minister Sanae Takaichi met with Vietnam’s top leadership, including Communist Party General Secretary and President To Lam and Prime Minister Le Minh Hung, during her visit to Hanoi. After the meetings, she said both countries had designated economic security as a top priority in bilateral cooperation.
According to Vietnamese media and Reuters, the two countries agreed Saturday to elevate their comprehensive strategic partnership and signed six memorandums of understanding covering technology, climate response and information and communications.
Energy cooperation at the forefront
A key outcome was in energy. Vietnam said Japan will support crude oil supplies to the Nghi Son refinery through a $10 billion “Power Asia” initiative aimed at strengthening energy resilience in the region.
The program, introduced by Takaichi last month, is designed to help Southeast Asian countries affected by disruptions in the Strait of Hormuz by supporting oil procurement, storage and supply chain resilience.
Japan’s Idemitsu Kosan has already decided to send about 4 million barrels of crude oil to Vietnam via routes that bypass the Strait of Hormuz. The shipment, equivalent to about 10 days of refinery operations, followed a request from Vietnam earlier this year.
Strategic message on China
In a speech at Vietnam National University, Takaichi emphasized the risks of overdependence on a single country for critical supplies, a remark widely interpreted as targeting China.
“Overreliance on one country often stems from abnormally low prices,” she said, calling for a “level playing field” in global trade.
She also stressed that regional supply chains depend on secure and open sea lanes, referencing both the Strait of Hormuz and the South China Sea.
The speech reaffirmed Japan’s vision of a “free and open Indo-Pacific,” a framework originally proposed by former Prime Minister Shinzo Abe and now updated for what Takaichi described as a more challenging global environment.
Expanding cooperation in critical minerals
The two countries also agreed to expand cooperation on critical minerals, as Japan seeks to diversify supply chains heavily dependent on China.
Vietnam holds significant reserves of rare earth elements and gallium but lacks refining capacity, leaving it reliant on Chinese processing. Strengthened cooperation could help Japan secure alternative supply sources.
Japan remains one of Vietnam’s largest economic partners, with bilateral trade exceeding $50 billion last year. It is also Vietnam’s largest provider of official development assistance.
Takaichi highlighted Vietnam’s growing role in global manufacturing, citing production of Apple AirPods and Nintendo Switch devices, as part of efforts to encourage renewed Japanese investment.
She is scheduled to travel to Australia next, where she will meet Prime Minister Anthony Albanese to mark the 50th anniversary of bilateral relations and upgrade ties to a “special strategic partnership.”
Japan’s Prime Minister Sanae Takaichi delivers a speech during the annual Japanese Trade Union Confederation (Rengo) May Day rally in Tokyo, Japan, 29 April 2026. It is the fourth consecutive year that a sitting prime minister has attended the rally of Japan’s largest labor organization. Photo by FRANCK ROBICHON / EPA
May 1 (Asia Today) — Japanese Prime Minister Sanae Takaichi said Japan is expected to secure stable supplies of naphtha-based chemical products beyond the end of the year, easing immediate fears of a petrochemical supply shock.
Takaichi told a ministerial meeting on the Middle East situation Wednesday that Japan has expanded naphtha procurement from non-Middle Eastern sources, including the United States, Algeria and Peru. The government is also using crude oil reserves for domestic refining and drawing on downstream inventories.
Naphtha is a key feedstock for basic petrochemical products such as ethylene and propylene. It is used in plastics, synthetic resins, packaging, auto parts, electronics materials and household goods.
Japan’s response amounts to more than emergency imports. Government data show Japan sourced about 40% of its naphtha from the Middle East in 2024, produced about 40% domestically and imported about 20% from other regions.
Takaichi said supply concentration and distribution bottlenecks remain a concern. Some companies have placed larger-than-usual orders to guard against shortages, creating pressure at certain stages of the supply chain.
The supply strain has already affected Japan’s manufacturing indicators. Industrial output in March fell 0.5% from the previous month, with lower production of petroleum and chemical products contributing to the decline.
Japan has operated a task force since early April to monitor supplies of key materials, including naphtha, petrochemical products, fuel oil and goods tied to healthcare, logistics and agriculture.
The issue also carries implications for South Korea, whose petrochemical industry depends heavily on naphtha and is closely linked to refining, autos, electronics and packaging.
Japan’s move to diversify procurement, manage inventories and control supply information offers a possible model for South Korean policymakers and companies as Middle East tensions continue to pressure energy and industrial supply chains.
We explore why water infrastructure is increasingly being targeted in the midst of war and conflict.
Water sustains life, but what happens when it is weaponised? In the ongoing US-Israel war on Iran, desalination plants supplying millions in the Gulf have become targets. This reflects a growing pattern: water infrastructure is increasingly vulnerable as global scarcity intensifies. The United Nations warns of looming “water bankruptcy” driven by climate change and rising global demands, including AI data centres.
Presenter: Stefanie Dekker
Guests:
Kaveh Madani – Director, UNU Institute for Water, Environment & Health
Zeina Moneer – Environmental policy and climate programmes expert
President of Vietnam and General Secretary of the Communist Party To Lam (2-R) and his wife Ngo Phuong Ly (R), South Korean President Lee Jae Myung (2-L) and his wife Kim Hea Kyung (L) pose for a group photo at the Presidential Palace in Hanoi, Vietnam, 22 April 2026. President Lee is on a state visit to Vietnam from 21 to 24 April 2026. Photo by LUONG THAI LINH / EPA
April 22 (Asia Today) — South Korean President Lee Jae-myung held summit talks with Vietnam’s top leader on Tuesday to strengthen cooperation in nuclear energy, infrastructure and supply chains, as both countries seek to navigate rising global uncertainties.
Lee met with To Lam in Hanoi during a state visit, where the two sides discussed expanding strategic cooperation across key sectors, including energy security and critical minerals.
The talks come as prolonged conflict in the Middle East heightens concerns over global energy supply disruptions, prompting both countries to pursue more resilient and diversified supply chains.
South Korea and Vietnam, each among the other’s top three trading partners, agreed to deepen cooperation not only in trade and investment but also in nuclear power, infrastructure, defense and other strategic industries.
The two countries have set a goal of increasing bilateral trade from $94.6 billion in 2025 to $150 billion by 2030.
Lee is expected to express support for South Korean companies seeking to participate in major Vietnamese infrastructure projects, including a new urban development project valued at about 1.1 trillion won ($740 million) and a new airport project estimated at 102.7 billion won ($69 million).
The leaders are also expected to discuss expanding cooperation in science and technology, climate response, artificial intelligence semiconductors and cultural industries, as well as boosting people-to-people exchanges such as tourism.
Ahead of the summit, Lee said relations between the two countries had reached a “comprehensive strategic partnership” following the 30th anniversary of diplomatic ties in 2022.
“Through this visit, we aim to further develop our highest-level cooperation into a more future-oriented and strategic partnership,” Lee said during a meeting with Korean residents in Vietnam.
Lee also paid tribute at the mausoleum of Ho Chi Minh before the summit and is scheduled to attend a state banquet hosted by the Vietnamese leadership.
On Wednesday, Lee is expected to meet Vietnam’s prime minister and National Assembly chair, and attend a business forum with executives from major South Korean conglomerates, including Lee Jae-yong, Chey Tae-won and Koo Kwang-mo.
South Korean President Lee Jae Myung (R) and Indian Prime Minister Narendra Modi enter a room for their summit held at the Hyderabad House in New Delhi on Monday. Photo by Yonhap
President Lee Jae Myung held summit talks with Indian Prime Minister Narendra Modi on Monday, focusing on deepening economic ties and strengthening the countries’ strategic partnership amid the war in the Middle East.
The two leaders were earlier expected to discuss ways to bolster cooperation in artificial intelligence, defense, and the shipping and shipbuilding industries, while expanding the scope of bilateral manufacturing cooperation beyond electronics and vehicles.
They also likely discussed enhancing coordination on global supply chains and energy security as their countries, both heavily reliant on imported energy, grapple with the fallout from the war between the United States and Iran.
In an interview with The Times of India published earlier in the day, Lee stressed the need for South Korea and India to work together to ensure safe passage through the Strait of Hormuz, a critical route for oil and natural gas, and make joint efforts to stabilize global supply chains.
It marked their third in-person meeting since Lee took office in June 2025.
Ahead of the summit, Lee paid tribute at Raj Ghat, a memorial dedicated to Mahatma Gandhi, and planted a commemorative tree with Modi at Hyderabad House.
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