Iran deal talks inch forward as Russia strikes Kyiv with hypersonic missile

The Iran deal that markets want but diplomats won’t promise

The three-month-old war between the United States and Iran — launched on February 28 when the US and Israel struck Iranian targets, prompting Iran to close the Strait of Hormuz — now appears closer to a pause than at any point since the April ceasefire broke down. But “closer” is doing a lot of work.

On Saturday, President Trump posted on Truth Social that a memorandum of understanding with Tehran had been “largely negotiated,” naming Saudi Arabia, the UAE, and Qatar as parties to the framework. [62] Oil markets reacted immediately: Brent crude dropped 5% to around $98 a barrel. [63] Tokyo’s Nikkei hit a record high. [40] European airline stocks surged — Air France-KLM up 9%. [40]

Then on Sunday, Trump reversed the mood, posting that he had told negotiators “not to rush into a deal” and that the US blockade of Iranian ports would remain “in full force and effect until an agreement is reached, certified, and signed.” [21] By Monday, the White House struck a more hopeful tone again: Secretary of State Marco Rubio, speaking in New Delhi, said “we have a pretty solid thing on the table” but cautioned “it takes a little while to hear back from Iran.” [21] He added: if no good deal emerges, the US will deal with Iran “another way.” [38]

Tehran’s position is equally guarded. Iran’s foreign ministry spokesperson said conclusions had been reached on “many topics” but that no agreement was imminent. He added that Iran is negotiating an end to the war — not the nuclear question, which Tehran says it will only discuss after sanctions relief is granted. [18,30] Iranian media linked to the Revolutionary Guards said the US was still blocking parts of any deal, including the release of frozen Iranian funds. [38]

The mooted framework is a 60-day ceasefire extension, reopening of the strait, and a commitment to further nuclear negotiations. It leaves the hardest issues — sanctions, frozen oil revenues estimated in the tens of billions of dollars, the scope of Iran’s nuclear programme — for later rounds. [21] That’s the sticking point for US Republican hawks: Senator Ted Cruz called it “a disastrous mistake,” and Roger Wicker warned it would squander everything “Operation Epic Fury” achieved. [21] Trump dismissed critics as “losers.” [21]

One complicating factor not widely reported: US intelligence believes Iran’s supreme leader, Ali Khamenei, was injured in the opening Israeli strike on February 28 and has been communicating with his envoys through a network of messengers from a hidden location — slowing the pace of talks. [9,21]

Several Gulf states are playing a quiet bridging role. Saudi Arabia asked Washington not to resume fighting during the Hajj pilgrimage, which began Monday with more than 1.5 million pilgrims in Mecca. [29,57] The logic: a regional war while the holiest sites are full is a line nobody wants to cross.

What’s actually moving through the strait right now. Two LNG tankers — one owned by Japan’s Mitsui and loaded in Qatar — crossed the Strait of Hormuz on Monday heading for Pakistan and China. A supertanker with nearly 2 million barrels of Iraqi crude for Sinopec left the Gulf on Saturday after being stranded almost three months. [55] Abu Dhabi’s ADNOC has been the most consistent shipper, using tankers with transponders switched off — so-called dark transits — to move oil and gas past both Iranian and US warships. [44] Before the war, 125–140 vessels crossed daily. The reopening is months away from restoring that level even after any deal is signed. [63]

The economic toll, by country. Malaysia says it has energy supplies secured until end-July, but shipping costs to the Middle East are up 50–80%, insurance premiums have risen 3%, and daily passenger flights fell 31.5% in April. [35] India has raised fuel prices for the fourth time this month [66] and turned to oil from Venezuela, Brazil, Angola, and Nigeria to replace lost Middle Eastern supply. [61] The Indian rupee hit a record low near 97 per dollar last week before the central bank intervened. [65] Indonesia, whose President Prabowo Subianto is already under fiscal pressure, is watching the strait closely. [56]

The number that matters for rates: Traders are now fully pricing in a Federal Reserve rate increase in January 2027 — a stark reversal from two cuts expected before the war began. [36] Any deal would help, but analysts estimate three to six months to restore normal energy flows even after Hormuz reopens. [63]

Kyiv struck by hypersonic missile as Europe watches Belarus

Russia overnight Sunday launched one of its heaviest attacks on Kyiv since the war began — hundreds of drones and missiles, including its Oreshnik hypersonic ballistic missile, fired at the city and surrounding areas. [1,4] It was the third use of the Oreshnik in the conflict; the missile can carry nuclear warheads and travels at speeds that make interception very difficult.

Ukrainian President Volodymyr Zelensky called the attacks “deranged.” [19] The Guardian reports that inside Russia, the mood is shifting: an increasingly alarmed Russian elite, Fortune Magazine suggesting Putin is “trying to keep up appearances,” and The Atlantic arguing he “can no longer hide his catastrophe.” [19]

European leaders are watching Belarus — Russia’s close ally and neighbour — with particular concern. France’s Emmanuel Macron and others have been monitoring whether Belarusian territory could be used to stage new attacks. [4] Lithuania’s recent drone alert sent politicians to shelters, a reminder that a broader hybrid war between Russia and Europe is already underway. [22]

Peace talks are not in sight. European discussions about potential envoys — Angela Merkel, Mario Draghi, and Finland’s former president Sauli Niinistö have been floated — remain entirely hypothetical. What has changed, per one analyst who recently visited Kyiv, is the mood: Ukrainians are grimly confident, expecting another brutal winter attack on energy infrastructure while also believing Russia is creaking. [22]

Gaza: 904 killed since the ceasefire began

Since October 11, when a ceasefire and hostage-release deal took effect, Israeli forces have killed 904 Palestinians in Gaza, according to the Gaza Health Ministry — wounding a further 2,713. [13] Haaretz documents the mechanisms: sniper fire near UN clinics, airstrikes on refugee camps, shootings on roads. [2] On Sunday an Israeli airstrike in Nuseirat camp killed a family of three, including a six-month-old child named Osama. [13]

Roughly 1.4 million Gazans remain displaced from before the ceasefire, about 800,000 of them still living in tents. [13] Gazan health authorities estimate 6–10 people die each day because they cannot be evacuated to hospitals outside the enclave. [13] Aid organisations warn of a deteriorating humanitarian situation with little progress on implementing the ceasefire agreement’s terms. [13]

The deal emerging from US-Iran talks is creating new fault lines inside Israel. Leaders of northern Israeli communities — those on the Lebanese border — say a deal that leaves Hezbollah intact would be a “death blow,” and that they were not consulted about its security implications. [31] Netanyahu is increasingly sidelined: the Times of Israel reports he began the Iran war as Washington’s partner and is ending it “on the sidelines” as Trump conducts talks without him. [48]

From Senegal’s political rupture to Kyiv, governance under strain

Senegal. On Friday, President Bassirou Diomaye Faye dismissed Prime Minister Ousmane Sonko and dissolved the government. Two days later, parliament speaker El Malick Ndiaye resigned. [37] Faye and Sonko were allies who swept to power together in 2024 on a reformist platform; their split was driven by economic pressures including debt and the fallout from the Iran war on commodity prices. Parliament meets Tuesday to elect a new speaker and potentially reinstate Sonko as a lawmaker — a move some legal experts say would be illegal. [37] This matters: Senegal is a key West African democracy, and political instability here typically rattles investor sentiment across the region.

Pakistan. A suicide bomb near a railway track in southwest Pakistan killed at least 23 people, the third major attack in the area in recent months. [1]

Turkey. Turkish police physically evicted the leadership of the main opposition party, the CHP, from its own headquarters. France’s Libération calls it part of Erdogan’s “authoritarian turn”; the Frankfurter Allgemeine says Erdogan will use “all means to hang on to power.” Istanbul’s private Bilgi University was also briefly shuttered before Erdogan ordered it reopened. [19]

Lithuania data breach. Lithuania’s government suspects foreign involvement in a data leak affecting more than 600,000 entries from the national register — roughly a fifth of the country’s total population. An investigation is under way. [6]

What the war is doing to coal, and to Myanmar’s rare earths

The Hormuz closure cut roughly a fifth of global LNG and a tenth of crude, but coal was supposed to be insulated. It hasn’t been. Asia’s thermal coal imports are on track for their strongest month since December, up 23% from April. [50] China’s domestic coal output fell sharply after the country’s deadliest mine disaster in 17 years — 82 killed in Shanxi province — and authorities have now ordered safety inspections across all mines, likely tightening supply further. [50] Indonesian coal at 4,200 kcal/kg hit a three-year high, up 42% since the start of the year. [50]

In Myanmar, the country’s military junta launched renewed offensives this month into Kachin State — a region on the Chinese border that produces roughly half the world’s heavy rare earth elements, used in wind turbines and electric vehicles. [14] The offensive is led by new military chief Ye Win Oo, who took office in March after his predecessor became president. [14] The Kachin Independence Army, which took control of the rare earth mining belt in October 2024, is pushing back. [14] Reuters could not independently verify claims of military gains. This is the thread to watch for anyone tracking the global energy transition: Myanmar’s rare earth disruption has already been cascading through supply chains for months.

The story nobody’s covering

BHP, the world’s biggest miner, quietly shelved its own climate programme. A cache of internal documents leaked to the Guardian and Australia’s ABC reveals that BHP — which publicly committed to urgent decarbonisation and won shareholder support for key solar projects — cancelled a board-approved 50-megawatt solar farm at its Pilbara iron ore operations soon after funding it, shelved a 500-megawatt wind-solar-battery system with no capital funding now planned before 2031, and dumped an iron ore processing plant that would have cut 1.7 million tonnes of emissions per year — equivalent to taking 350,000 cars off the road. [24] Internal documents show the company was warned this created “reputational risk” and threatened its “licence to operate.” It went ahead anyway. The leak is a structurally important story for anyone tracking corporate climate commitments: if the world’s largest miner can abandon shareholder-approved decarbonisation plans in private while maintaining green rhetoric in public, the question of what any mining company’s climate pledge is actually worth becomes harder to answer. [24]