Strategic Timing amid Maritime Paralysis

The breakthrough comes at a critical moment, as the ongoing US‑Israeli war with Iran has effectively shut down maritime traffic through the Strait of Hormuz, the world’s most vital oil and LNG chokepoint. With sea routes blocked, land logistics through Türkiye have become indispensable for maintaining supply chains between Europe and the Gulf. Bolat noted that Ankara hopes the current 15‑day ceasefire will evolve into permanent stability, as the global economy urgently needs peace to prevent further shocks and prolonged price hikes.

Economic Confidence and New Opportunities

Bolat also highlighted that Türkiye’s e‑commerce sector has grown from 5% to 20% of total trade, making Turkish firms attractive targets for international investors seeking a stable bridge between Western and Chinese markets. He pointed to recent high‑level meetings in Portugal and Brussels as evidence of growing confidence in the Turkish economy, and noted that Portuguese authorities are actively inviting Turkish contractors to bid on €60 billion in infrastructure and housing projects. The EU, he added, is increasingly eager to form alliances with Türkiye’s rapidly expanding defence industry.

Speaking at the Port of Mogadishu during a ceremony to welcome the Çağrı Bey Drillship, Bayraktar said the vessel’s arrival marks a new phase in Türkiye’s offshore energy exploration efforts in Somali waters. The Curad-1 well represents a significant step in expanding Ankara’s energy footprint abroad, as operations officially move into deeper exploration off Somalia’s coast.

Extended Coverage and Limited Exceptions

The advisory applies to the airspace of Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, the United Arab Emirates, and parts of Saudi Arabia. A narrow exception permits certain high-altitude operations in specific sectors of Saudi and Omani airspace, but only after a strict risk assessment. The previous suspension was set to expire on April 10; the extension reflects the regulator’s assessment that the security environment remains volatile.

Risks to Civil Aviation

EASA warned that the continuing military confrontation creates spillover hazards, including the potential for misidentification of civilian aircraft, miscalculation by air defence systems, and failures in interception procedures. The bulletin applies to EU air operators as well as third-country carriers authorised by EASA for flights to, from and within the European Union.

Türkiye’s Position as a Stable Corridor

Notably, Türkiye’s airspace is not included in the advisory. While much of the region remains off‑limits for commercial overflights, Ankara continues to serve as a reliable and safe transit hub for airlines operating between Europe, Asia and the Middle East. Turkish authorities have maintained close coordination with international aviation bodies and have not experienced the same security threats that now plague the Gulf and eastern Mediterranean skies. This stability further reinforces Türkiye’s strategic importance as an energy and logistics corridor amid regional turmoil.

Competing Risks and a Divided Outlook

The minutes showed that officials agreed it was too early to determine how Middle East developments would affect the US economy, but they pledged to stay “nimble.” Many noted that substantially higher oil prices could erode household purchasing power, tighten financial conditions and weigh on global growth, increasing downside risks to employment. The Federal Open Market Committee voted 11‑1 to keep the benchmark rate at 3.5%‑3.75%, while many still expected that lowering rates would become appropriate if inflation continued moving toward the 2% target.

Ceasefire Brings Some Relief, Uncertainty Remains

The meeting took place weeks after the joint US‑Israeli strikes on Iran, which triggered a jump in energy prices and renewed inflation concerns. Although a two‑week ceasefire announced Tuesday helped push oil prices lower, the minutes reflected the heightened uncertainty that prevailed when officials met in March. Markets still largely expect the Fed to stay on hold for the rest of the year, though traders modestly increased bets on a possible rate cut following the truce. For Türkiye and other emerging economies, any shift in Fed policy will have direct spill‑over effects on capital flows, exchange rates and borrowing costs.

Falling US bond yields and capital flows

The ceasefire, brokered by Pakistan just hours before President Trump’s deadline, prompted a broad risk‑on rally in global markets. US Treasury yields fell across the curve: the 10‑year yield dropped 8 basis points to 4.24%, the two‑year fell 9 points to 3.73%, and the five‑year declined 9 points to 3.86%. Lower US yields typically encourage capital flows into emerging markets, and analysts expect Türkiye to benefit from this trend as international investors regain appetite for higher‑yielding assets.

Central Bank measures to support the lira

Throughout the conflict, Türkiye’s central bank took proactive steps to prevent excessive exchange rate volatility. Banks have resumed swap transactions with the central bank, signalling that there is no foreign exchange liquidity shortage and that the exchange rate regime is functioning as intended. These measures aim to avert a lira crunch, prevent banks from facing liquidity squeezes, and keep credit conditions more reasonable. With the ceasefire reducing geopolitical uncertainty, markets appear willing to price in positive developments going forward.

Ticket prices to remain under pressure

The IATA chief recalled that there exists an almost direct correlation between oil prices and airline ticket prices. The persistent challenge for the aviation industry, he explained, is the lag between pricing actions in energy markets and their reflection in actual airline revenues. Even with the Strait open, refining capacity, logistics, and supply chains disrupted by weeks of conflict will take time to return to pre-war functionality.

Türkiye’s aviation sector watches closely

For Türkiye, whose national carrier Turkish Airlines operates one of the world’s largest networks and whose tourism industry relies heavily on affordable air travel, prolonged high jet fuel prices would strain both airlines and consumers. Ankara has welcomed the two-week ceasefire brokered by Pakistan but continues to push for a permanent end to the US-Israeli war on Iran. Turkish officials have emphasized that even temporary truces are insufficient to reverse the economic damage already inflicted on global energy and transportation markets.

Gold and silver rally on truce hopes

Gold prices surged around 2.7% to $4,830 per ounce, while silver posted an even more dramatic increase, jumping 6.33% to $77.50 per ounce. The precious metals rally came despite the ceasefire news—typically a bearish signal for safe-haven assets—suggesting that markets are also pricing in potential inflationary effects from the prolonged conflict and expectations of slower US interest rate cuts.

Pakistan brokers two-week truce

Following Pakistani Prime Minister Shehbaz Sharif’s proposal for a two-week ceasefire, President Trump announced he had agreed to “suspend the bombing and attack of Iran for a period of two weeks.” Sharif also invited Iranian and US delegations to Islamabad on Friday and confirmed that Washington, Tehran, and their respective allies have agreed to an immediate ceasefire across all conflict zones. For Türkiye, which has consistently called for diplomacy and hosted multiple rounds of talks between regional actors, the Pakistan-brokered truce represents a welcome but fragile first step. Ankara continues to urge all parties to extend the pause into a permanent ceasefire and address the root causes of the conflict.

Supply risks mount

The prospect of a disruption to the Strait of Hormuz, through which nearly one-fifth of global oil passes, has kept energy markets on edge. Any blockage would immediately choke off supplies from Gulf producers to world markets. Meanwhile, Trump’s ultimatum and the ongoing US-Israeli offensive—which has killed over 1,340 people in Iran since February 28—have left traders bracing for a potential wider conflict. WTI briefly topped $115 earlier Tuesday after the Kharg Island strikes, before settling at $116.8.

Türkiye’s energy burden

As a country that imports nearly all its crude oil and natural gas, Türkiye is highly vulnerable to these price shocks. Rising energy costs directly impact transportation, manufacturing, and household bills, adding pressure to an already elevated inflation rate. Turkish officials have repeatedly called for de-escalation in the Gulf, warning that prolonged high oil prices could undermine regional economic recovery. Ankara maintains diplomatic channels with both Washington and Tehran, but market forces remain beyond political control.

Outlook remains volatile

Analysts expect oil prices to stay elevated as long as the Iran conflict continues. Trump declared the Tuesday deadline “final,” while Iran’s leadership shows no sign of backing down. Any further strikes on Iranian infrastructure, or a retaliatory closure of the Strait of Hormuz, could send crude above $150 per barrel. For Türkiye, which has been diversifying its energy suppliers and expanding renewable capacity, the current crisis underscores the urgency of reducing dependence on imported fossil fuels.

New Roketsan facilities to boost missile and air defense output

Erdogan announced that new Roketsan facilities totaling $3 billion have been inaugurated, and a new missile integration site has broken ground. These investments, he said, will further enhance the deterrent power of the Turkish Armed Forces. “With the systems that make up the striking power of the Steel Dome reaching a higher production tempo, we will further strengthen our air defense architecture,” Erdogan stated. Steel Dome is Türkiye’s integrated layered air defense system, bringing together domestically developed radar, missile, electronic warfare, and command systems to protect Turkish airspace at multiple altitudes and ranges.

Türkiye as a ‘founding actor’ in new global order

Erdogan emphasized that Türkiye now holds a position in the defense industry that is “admired around the world.” He said: “Today, Türkiye is a country that protects its own airspace, equips its own platforms, and develops its own munitions. We are doing all this with our own human resources.” He also declared that Türkiye is among the “founding actors of a new order” in which global rules and processes are being reshaped, helping determine the course of events both on the ground and in technology. As regional conflicts—including the US-Israeli war on Iran—increase global demand for advanced defense systems, Türkiye’s expanding production capacity positions it as a rising power in the international arms market.

Trade targets and strategic sectors

Bolat stated that the two nations confirmed their commitment to achieving a balanced and sustainable trade volume. “We discussed all kinds of solutions and mechanisms to bring our bilateral trade, which reached $3.7 billion last year, to $5 billion first and then to the $10 billion target,” he said. The ministers agreed to deepen cooperation in strategic sectors including textiles, agriculture, food, and machinery, while also sharing regulatory information to ensure predictability in agricultural trade. A Türkiye-Syria Business and Investment Forum will be held alongside the meeting to connect leading companies and investors from both countries.

Syrian minister sees expansion opportunity

Syrian Economy and Industry Minister Mohammad Nidal al-Shaar noted that the two countries have special relations and are working on a solid foundation. “Rather than economic cooperation, there is of course an opportunity for expansion, and we have set out on this path,” he said. Al-Shaar confirmed that work continues on an industrial zone planned for Aleppo, which he said would have a direct positive impact on other projects and the overall business environment. Turkish and Syrian industrialists are actively involved in the initiative.

Additional agreements and Türkiye’s regional vision

Bolat also touched upon recent regional conflicts, stressing the importance of ensuring uninterrupted foreign trade through multiple alternative routes. During the JETCO meeting, the two countries signed a separate cooperation agreement covering product safety, inspection, technical regulations, standardization, conformity, and metrology. For Türkiye, which has consistently supported Syria’s reconstruction and stability, these deals reinforce Ankara’s role as a key economic partner in the Levant. By targeting $10 billion in bilateral trade, Türkiye aims to strengthen supply chains and reduce dependency on volatile global markets, while also offering Syrian businesses a gateway to European and Asian markets.

Export optimism offers rare bright spot

Export expectations provided a rare source of hope for the struggling industry, rising for the fourth consecutive month to 30.7 points. German automakers appear increasingly optimistic about overseas demand, even as domestic challenges persist. The data suggests that global markets—particularly in Asia and North America—may be absorbing more German vehicles despite broader economic headwinds.

Layoffs stabilize after years of decline

The German auto sector has endured massive job cuts since 2022, but last month’s data suggests the worst may be over. Employment expectations surged from minus 44 points in February to minus 19.8 points in March—a dramatic one-month improvement. Wölfl noted that the stabilization has already appeared in official government data, including a renewed rise in job listings for auto-related positions in the first quarter of the year. For Türkiye, which has its own growing automotive supply chain integrated with German manufacturers, the stabilization of Germany’s auto sector is welcome news. Turkish suppliers export billions of euros worth of parts to German automakers annually, and a recovery in German production would directly benefit Türkiye’s manufacturing and export sectors.

Trump's threat

Trump has said that if a truce is not reached by this time, US forces would launch sweeping strikes against civilian targets in Iran. The president claimed on Monday that American forces could "take out" the entire nation of Iran in just a single night. "The entire country could be taken out in one night, and that night might be tomorrow [Tuesday] night," Trump told reporters. He also warned that by Tuesday night at 8 pm EDT, every bridge and power plant in Iran would be "decimated" if no deal was reached.

Israeli warning

The Israeli army also warned Iranians to avoid using trains nationwide for Tuesday, staying away from areas near railway lines. The warning suggests potential targeting of transportation infrastructure as part of the threatened escalation.

Conflict context

Regional tensions have escalated since the US and Israel launched a joint offensive on Iran on Feb. 28, killing more than 1,400 people according to Iranian authorities, including former Supreme Leader Ayatollah Ali Khamenei. Iran has retaliated with drone and missile strikes targeting Israel, Jordan, Iraq, and Gulf countries hosting US military assets, while restricting movement through the Strait of Hormuz.

Ceasefire talks reportedly underway

According to Axios, citing American officials and multiple sources familiar with the negotiations, the US, Iran, and regional mediators are discussing a possible 45-day ceasefire that could eventually lead to a permanent end to the war. However, the same sources indicated that the chances of securing even a partial agreement within the next 48 hours remain slim. The report alone was enough to ease some supply fears that have kept oil prices elevated since the US-Israeli offensive on Iran began on February 28.

Türkiye’s energy import outlook

For Türkiye, which imports nearly all of its crude oil and natural gas, any sustained decline in global energy prices would provide relief to the current account deficit and ease inflationary pressures. Ankara has consistently called for a ceasefire and diplomatic resolution to the conflict, warning that prolonged instability in the Gulf threatens energy security for importing nations. While the reported talks offer a glimmer of hope, markets remain wary, knowing that previous ceasefire efforts have failed. Türkiye continues to support mediation efforts and urges all parties to seize any diplomatic opening.

Factors behind gold's decline

Strengthening of the US dollar, rising bond yields, and liquidity needs sent gold to its sharpest monthly drop last month. Escalating Middle East tensions continue to stoke global inflation risks. Rising bond yields due to higher oil prices, potentially intensifying inflationary pressures, expectations that the Federal Reserve will stop cutting rates this year, and increasing demand for the US dollar as a safe haven all contributed to gold's decline. Central banks' selling of gold also played a role.

Gold's strong start to 2026 reversed

Gold had begun the year with a bang, rising 12.42% in January – its best monthly performance since November 2009 – and 8.9% in February, giving it a seven-month winning streak for the first time in 53 years. Meanwhile, silver hit a record high of $121.7 per ounce, up 17.2% in January and 12.6% in February, but it fell 19.9% in March to $75.1.

Expert analysis on market dynamics

Ole Hansen, head of commodity strategy at Saxo Capital, said gold suffered due to a combination of strong macroeconomic forces, temporarily weakening its traditional safe-haven feature as investors flocked to the US dollar. Hansen stated the decline was led by a significant repricing of rate expectations, rising energy prices stoking inflation fears, and rising bond yields in the US. He noted that rising bond yields increase the opportunity cost of holding non-yielding assets like gold, prompting investors to sell their holdings. Hansen added that the US dollar's strengthening due to global growth concerns and its safe-haven demand propelled the currency, making gold more expensive for investors trading in other currencies. He observed that the current situation is more supply-driven inflation rather than a demand-crushing crisis, and that unlike systemic crises where gold gains value as a hedge, the current crisis has resulted in widespread deleveraging. Hansen concluded that gold typically behaves more like a source of liquidity in such turbulent times instead of a safe-haven asset, so investors reduce positions to offset losses elsewhere.

Pharmaceutical tariffs

This tariff rate dropped to 15% for pharmaceutical imports originating from the EU, Japan, South Korea, Switzerland and Liechtenstein. Pharmaceutical companies faced a 20% tariff if they only signed domestic manufacturing agreements with the government. Officials exempted generic pharmaceuticals, biosimilars and orphan drugs from these immediate trade measures.

Metal tariffs

In a parallel move, the administration introduced a flat 50% tariff on articles made entirely or almost entirely of steel, aluminum and copper. Derivative articles substantially containing these three strategic metals received a flat 25% import penalty. The government applied a temporary 15% tariff on specific metal-intensive industrial and electrical grid equipment until 2027.

Exemptions

Foreign-manufactured goods manufactured exclusively with American metals qualified for a reduced 10% tariff rate. Products containing 15% or less steel, aluminum or copper completely escaped these new trade tariffs.

Economic context

The tariffs come amid ongoing global supply chain disruptions from the Middle East conflict and represent Trump's continued push to reshore critical manufacturing to the United States. The pharmaceutical measures particularly target foreign drug manufacturers while incentivizing domestic production agreements.

Stronger dollar and oil surge weigh on metals

Gold dropped 2.8% to $4,622.59 per ounce, while platinum and palladium also recorded losses. Trump’s escalation warning boosted the greenback and pushed crude oil prices higher, renewing fears that a prolonged Middle East war could keep inflation elevated and force central banks to maintain higher interest rates for longer. Financial markets turned sharply risk-averse after the address offered no clear timeline for de-escalation, reversing earlier optimism that the Iran conflict might wind down within weeks.

Türkiye’s exposure to metal price swings

For Türkiye, which imports significant quantities of precious metals for both industrial use and jewelry manufacturing, sharp price fluctuations carry direct economic consequences. A stronger dollar also raises the cost of all commodity imports, adding to inflationary pressures. Ankara has consistently called for restraint in the Gulf region, warning that prolonged military conflict will continue to disrupt global markets and hurt emerging economies disproportionately.

Dollar breaks key levels against major currencies

The US Dollar Index briefly crossed the 100 threshold for the first time since November 2025 before settling at 99.7 at quarter’s end. Against the euro, the greenback strengthened sharply, with the EUR/USD pair closing at 1.1554—a 1.7% drop for the single currency. The euro also touched 1.1411, its weakest level since August 2025. The dollar gained 0.8% against the Swiss franc and climbed 1.2% versus the Japanese yen, briefly rising above 160 yen for the first time since July 2024.

Analyst view and Türkiye’s position

Jane Foley, senior FX strategist at Rabobank, noted that investors prioritize liquidity over returns during turbulent periods, reinforcing the dollar’s safe-haven role. “Demand for the dollar rises quickly during crises because of its central role in global trade and payment systems,” she said, adding that recent developments have eased doubts about whether the dollar had lost its status as a refuge currency. Further escalation in the Middle East would likely continue to support the greenback, she warned. For Türkiye, a stronger dollar typically increases the cost of energy and commodity imports, adding pressure to the current account balance. Ankara continues to advocate for de-escalation in the Gulf region while managing the economic spillovers of a prolonged conflict.

Price rally

Gold prices saw an increase 1.08% as of 0720GMT to $4,720 per ounce, following another increase of 2% on Tuesday. The rally comes after last week's historic drop, when gold saw its biggest weekly decline since 1983, losing more than 10% as markets reassessed safe-haven asset dynamics.

Conflict context

The US and Israel launched joint attacks on Iran on Feb. 28, killing more than 1,340 people according to Iranian authorities, including former Supreme Leader Ayatollah Ali Khamenei and more than 150 schoolgirls. The conflict has expanded to Lebanon, where Israeli ground operations have displaced over one million people, and the Strait of Hormuz remains effectively closed, with oil prices above $116 per barrel.

Market reaction

Trump's signal of an imminent US withdrawal suggests Washington may be preparing to end its direct military involvement in the conflict, though the timing and conditions of any ceasefire or broader settlement remain unclear. Gold's price movement reflects shifting investor sentiment as the prospect of de-escalation reduces demand for safe-haven assets while the metal remains elevated due to ongoing uncertainty.

Gulf allies rethink security-for-loyalty pact

The ongoing war is placing Gulf monarchies in a difficult position. Perceptions that Washington is recalibrating its security priorities in the region have eroded trust among key US allies. Critics argue that the long-standing bargain—security guarantees in exchange for dollar loyalty—has become increasingly one-sided, prompting Gulf capitals to quietly explore alternative arrangements.

Yuan and riyal emerge as payment alternatives

More consequential are emerging reports that Iran is allowing oil shipments through the strait to be transacted in currencies other than the dollar, particularly the Chinese yuan and the Iranian rial. If Gulf states, driven by security concerns, begin to distance themselves from the dollar-based energy trade, the ripple effects could be profound: reduced demand for the greenback, waning appetite for US Treasury debt, and a gradual erosion of the dollar’s reserve currency status.

Powell warns of fiscal fragility, dollar’s reserve share declines

Federal Reserve Chair Jerome Powell recently highlighted underlying vulnerabilities, warning that US national debt—now at $38.86 trillion and growing faster than the economy—could end badly if left unaddressed. Meanwhile, data from The Kobeissi Letter shows the dollar’s share of global foreign exchange reserves has fallen to approximately 40 percent, the lowest level in two decades. Central banks have been diversifying into gold, signaling a clear shift in reserve preferences.

Iran advances legislation on strait tolls in rials

Adding to the momentum, the Iranian parliament’s National Security and Foreign Policy Committee has approved draft legislation regulating passage through the strait. Committee member Mojtaba Zarei announced that the bill, which now moves to the full parliament, includes provisions for tolls to be set in rials, a ban on US and Israeli vessels, and restrictions on countries participating in unilateral sanctions against Tehran. The draft also addresses security coordination with Oman regarding the strait’s legal status.

Sharp increases across fuel types

Diesel will see the steepest rise, climbing by approximately 72% to 4.69 dirhams ($1.28) per litre, up from 2.72 dirhams ($0.74). Super 98 petrol is expected to increase by around 30%, reaching 3.39 dirhams ($0.92), while Special 95 petrol will rise by 32% to 3.28 dirhams ($0.89).

E-plus petrol will also register a notable increase of 33.3%, bringing its price to 3.2 dirhams ($0.87) per litre.

Global oil market pressures

The surge comes amid a significant rise in global oil prices, which have climbed by roughly 40% in recent weeks. Market volatility has been driven by geopolitical tensions, particularly in the Gulf region, where key energy routes remain under pressure.

Developments around the Strait of Hormuz have heightened concerns over supply disruptions, contributing to upward pressure on fuel costs worldwide.

Impact on consumers and economy

The price adjustments are expected to affect transportation costs and broader economic activity in the UAE, as higher fuel prices typically translate into increased costs for goods and services.

Authorities and markets are closely monitoring the situation, as continued instability in the Middle East could sustain or further intensify price pressures in the coming weeks.

Energy prices and inflation link

Karahan emphasized that higher oil and natural gas prices are a key driver of cost-push inflation. “The ongoing war has led to a pronounced increase in energy prices,” he said, adding that the impact is not limited to fuel but spreads through production and supply chains. According to Central Bank calculations, a sustained 10% rise in oil prices could add around 1.1 percentage points to annual inflation, although policy tools such as the sliding-scale system help soften this effect.

Medium-term risks and economic outlook

Looking ahead, the Central Bank expects both supply-side disruptions and demand-side shifts to shape inflation dynamics. Supply constraints linked to the conflict have already begun to affect pricing, while uncertainty may weaken external demand and investment appetite. Karahan noted that higher energy costs could slow economic growth, estimating a potential reduction of up to 0.7 percentage points over a year under certain scenarios.

Current account and trade balance impact

The war also poses risks to Türkiye’s current account balance, primarily through rising energy imports. A $10 increase in oil prices could widen the energy deficit by several billion dollars annually. However, a moderation in domestic demand and imports may partially offset this effect, supporting the trade balance. Officials say the current account deficit remains below historical averages and manageable despite external pressures.

Policy response and financial stability

Karahan underlined that the Central Bank is maintaining a tight monetary stance to contain inflation expectations. Measures introduced since the escalation include liquidity management steps, foreign exchange operations, and support mechanisms to stabilize markets. “We are determined to ensure the tightness required for the continuation of the disinflation process,” he said.

Reserves and gold strategy

Addressing concerns over reserves, Karahan pointed to Türkiye’s increased gold holdings, which now account for more than 60% of total reserves. He confirmed that gold-backed transactions, including swaps, are being used to support foreign exchange liquidity. These tools, along with Turkish lira swap operations, are part of a broader strategy to maintain financial stability and strengthen confidence in the economy.

Organized by Türkiye’s Directorate of Communications under the theme “Disruption in the International System: Crises, Narratives, and Search for Order,” the summit convened senior representatives from governments, international organizations, media institutions, and think tanks amid a period of heightened geopolitical tension and systemic transformation.

Opening remarks were delivered by Head of Communications Prof. Dr. Burhanettin Duran and Vice President Cevdet Yılmaz, alongside a video message from President Recep Tayyip Erdoğan, all emphasizing the growing importance of strategic communication in addressing global challenges.

The event featured prominent figures including Foreign Minister H.E. Dr. Hakan Fidan, National Intelligence Organization (MIT) Director Prof. Dr. İbrahim Kalın, and Parliamentary Foreign Affairs Committee Chairman Fuat Oktay, along with ministers, academics, and media professionals from across Europe, Asia, and Africa.

Throughout the two-day program, discussions focused on the evolving global order, the role of leadership and diplomacy in conflict resolution, and declining trust in international institutions. Participants also examined the impact of misinformation, competing narratives, and emerging technologies—particularly artificial intelligence—on global communication dynamics.

Ambassador Mahmood took part in multiple sessions addressing global governance challenges, regional conflicts, and the increasing importance of strategic narratives. The summit also highlighted the role of media during crises, the contributions of women leaders, and the transformation of soft power in a fragmented international landscape.

On the sidelines, Mahmood held bilateral meetings with key stakeholders. In talks with Bangladesh’s Minister of Information and Broadcasting, Zahir Uddin Swapon, discussions centered on enhancing media cooperation among D-8 member states to strengthen the organization’s global visibility.

He also met with Mr. Ahmed Ismayilov, head of Azerbaijan’s Media Development Agency, to review progress on establishing the proposed D-8 Media Excellence Center in Azerbaijan and to explore closer collaboration among media institutions and communication platforms within the bloc.

In a separate interaction with Prof. Dr. Burhanettin Duran, Mahmood underscored the summit’s contribution to advancing discourse on pressing global issues and stressed the importance of deepening cooperation between the D-8 and Türkiye’s Directorate of Communications in strategic communication and public diplomacy.

Engaging with a wide range of officials, media executives, and think tank representatives, the D-8 Secretary-General used the platform to strengthen partnerships and promote the organization’s objectives.

The participation of the D-8 in STRATCOM Summit 2026 reaffirmed its commitment to enhancing cooperation among member states, particularly in media and communication, and highlighted its role in advancing collective responses to shared global challenges.

Reported by Khan Muhammad An Nazmus Saqib

A partnership fraught with legal risk

Torsten Menge of Northwestern University in Qatar told Anadolu that any military cooperation with a state engaged in genocide, ethnic cleansing, and multiple wars of aggression violates both international law and Germany’s domestic legal framework. He cited Articles 25 and 26 of Germany’s Basic Law and the War Weapons Control Act, which prohibit arms exports where there is a risk they could harm peace. “In my opinion, any military, security, or arms cooperation with a state that is actively committing genocide … violates Germany’s obligations under international law and is illegal under domestic law,” Menge said.

Historical irony and corporate accountability

Menge noted that Volkswagen was founded by the Nazi regime and played a central role in arms production during World War II. “It is a particularly cruel irony that it is now considering again to produce weaponry for a genocidal and expansionist regime,” he said, adding that the German state of Lower Saxony, a major Volkswagen shareholder, creates a form of direct complicity. Canadian legal expert Aidan Simardone emphasized that corporations have legal personality and can be held accountable under international law. When a corporation supplies weapons to a country documented to be committing crimes against humanity, “it’s at that point that a corporation absolutely could be liable, at least in theory,” he said.

A troubled industrial landscape

Investigative journalist Eric van de Beek noted that political sanctions have been imposed on arms companies whose weapons are used in war crimes, citing US and EU sanctions against Russian producer Almaz-Antey. He questioned Volkswagen’s defense pivot at a time when the company is already struggling with soaring energy costs, intense competition from China, and the shutdown of cheap Russian natural gas. As Germany faces a potential ICJ case over its arms exports, experts warn that turning toward the defense industry may not yield positive long-term consequences—and could instead place Berlin in a position of being accused of supporting genocide.

Türkiye’s principled stance

While Germany grapples with the legal and ethical implications of arming Israel, Türkiye has consistently maintained a clear position grounded in international law. Ankara has repeatedly condemned the use of German-made weapons in conflicts that violate humanitarian principles and has called on all nations to uphold their obligations under the Genocide Convention. Türkiye’s own defense industry, built on the principle of national sovereignty and self-reliance, stands as a contrast to the entanglements that now threaten to draw Volkswagen and the German state into complicity allegations.

Highest yield in 26 years

The yield spike marks the highest level since 1999, reflecting growing conviction among traders that the BOJ’s ultra-loose monetary policy era is drawing to a close. Last week, the central bank held its short-term policy rate steady at 0.75 percent but maintained a tightening bias, with Governor Kazuo Ueda signaling that further rate increases remain on the table if underlying inflation continues tracking toward the 2 percent target. Analysts and former BOJ officials suggest the bank may need to act as early as its next policy meeting on April 27-28.

Inflation pressures mount

The yen has remained under pressure as higher crude prices swell Japan’s import bill, while mixed signals from Washington and Tehran regarding diplomatic efforts to ease the Middle East conflict have kept global markets unsettled. Brent crude traded above $107 per barrel Friday after sharp gains in the previous session. Separately, the BOJ noted that updated estimates show Japan’s natural rate of interest pointing to a moderate upward trend, underscoring the challenge of calibrating monetary policy as inflation risks rise.

Türkiye’s focus on inflation management

As Japan grapples with imported inflation from surging energy costs, Türkiye faces similar pressures from the same global shocks. Ankara has pursued a multi-pronged strategy to shield its economy from external volatility, including diversifying energy suppliers, expanding domestic production, and maintaining tight fiscal discipline. Turkish policymakers have emphasized that while global energy shocks are beyond any nation’s control, prudent economic management and strategic investments in energy infrastructure can mitigate their impact on households and businesses.

A supply shock of historic proportions

The Strait of Hormuz—a critical corridor handling approximately one-fifth of the world’s crude oil and LNG—has been operating under severe strain, with shipping traffic nearly halted in recent days. The International Energy Agency has warned that the ongoing supply disruption surpasses the severity of the 1970s oil crises and the Russia-Ukraine gas disruption combined. According to Reuters, roughly 11 million barrels per day have been removed from global supply, sending shockwaves through energy markets.

Diplomatic signals fail to calm markets

Oil markets remained under pressure despite US President Donald Trump extending by 10 days a pause on strikes targeting Iranian energy infrastructure. Conflicting signals from Washington and Tehran have clouded prospects for near-term de-escalation, with traders focusing on the risk of a prolonged conflict rather than daily diplomatic headlines. The war, which began February 28 with a joint US-Israeli offensive on Iran, has triggered retaliatory strikes across the region and effectively closed the strait to most commercial traffic.

Türkiye’s energy security strategy

As global energy markets face unprecedented volatility, Türkiye’s long-standing strategy of diversifying energy sources and supply routes has proven critical. Ankara has invested heavily in alternative pipelines, floating storage regasification units, and domestic resource development to reduce reliance on any single corridor. Turkish officials have consistently warned that the closure of the Strait of Hormuz harms all nations and have called for diplomatic efforts to restore freedom of navigation, emphasizing that stable energy flows are essential for global economic security.

Expanding regional footprint

The agreement establishes a foundation for deeper collaboration between the two companies. Mikail Akbulut, CEO of Turkish Technic, expressed enthusiasm for welcoming “one of the largest air carriers in Central Asia” to the company’s growing customer network. “This long-term agreement will lay the foundation for a close collaboration in the future. With our years of experience in component pool services, we will ensure they can continue their operations efficiently,” Akbulut said, adding that he looks forward to a lasting and thriving partnership.

Leadership perspectives

Abdulaziz Abdurakhmanov, founder and CEO of Centrum Holding, hailed the deal as a major step toward strengthening operational reliability and efficiency. “Access to a comprehensive component support infrastructure will enable us to maintain high levels of operational continuity as we continue to expand our fleet and network across key regional and international markets,” Abdurakhmanov stated. He emphasized his confidence in Turkish Technic’s global expertise and the partnership’s role in supporting long-term growth and operational excellence.

Strengthening Türkiye’s aviation influence

The agreement underscores Türkiye’s growing stature as a hub for aviation maintenance and engineering services. Turkish Technic’s expanding portfolio across Central Asia reflects Ankara’s broader strategy of deepening economic and industrial ties with Turkic republics and neighboring regions. As Turkish Airlines continues to expand its global network, its maintenance subsidiary is increasingly positioned as a trusted partner for carriers seeking world-class technical support—bolstering Türkiye’s reputation as a center of excellence in the aviation sector.

Historical responsibility

Natalie Scholz, senior lecturer of modern and contemporary history at the University of Amsterdam, said such a shift cannot be viewed as routine. "It is not a normal thing in post-war Germany to happen... Volkswagen is not a regular private company, and the political responsibility is bigger here even than it would be with any other weapons-producing company." Jurgen Mackert, a professor of sociology at the University of Potsdam, Germany, said that, while there has been extensive public discussion about the company's historical responsibility, this appears absent in practice. "It is simply business and about making profits. If Volkswagen cannot do it with cars, it will do so with arms."

Gaza war concerns

The reported talks have also drawn criticism due to their timing amid Israel's war in Gaza. Mackert argued that Germany's political framing of the Gaza war creates the conditions for such decisions. "As the German political establishment, until today, does not admit that what is happening in Gaza is a genocide but Israel's alleged right to self-defense, therefore Volkswagen has no reason not to produce Israeli weapons." The academic described the potential deal as a "catastrophe" from both a historical and moral perspective, adding that the "strategic decision" reflects Europe's willingness to profit from Israel's Iron Dome system.

Legal risks

Legal experts say the reported deal could intensify scrutiny of Germany's role in supporting Israel, particularly as it faces ongoing proceedings at the International Court of Justice (ICJ). In March 2024, Nicaragua filed a complaint with the court alleging that Germany was aiding and abetting genocide against Palestinians in Gaza by supplying weapons to Israel. According to the Stockholm International Peace Research Institute, Germany provided 30 percent of Israel's major arms imports between 2019 and 2023. "Given Germany's complicity and unconditional support for the genocide in Gaza, ethnic cleansing in the West Bank... as well as its massive contribution to the destruction of international law, there are no red lines left," said Mackert.

Investments and Modernization at Alport Conakry

The delegation visited Alport Conakry SA, the port operating company, and received detailed information about its activities. During the visit, presentations were made covering the general profile of Albayrak Group as well as Alport Conakry’s investments and the innovative improvement works being carried out at the port. The presentations were followed closely by the delegation.

Praise from Guinea’s National Chamber of Commerce

M. Balde, President of the National Chamber of Commerce of Guinea, spoke highly of the investments carried out by Türkiye through Albayrak Group. He emphasized that the modernization and development activities implemented by Alport Conakry at the port make significant contributions to the country’s economy.

A Step Toward Stronger International Cooperation

The visit is regarded as a strategic step in line with Guinea’s goals of strengthening cooperation with international investors and mobilizing the country’s economic potential more effectively.

Conflict-driven volatility reshapes safe-haven appeal

Despite gold’s traditional status as a safe-haven asset during geopolitical crises, the current conflict has upended typical market dynamics. Rising oil prices and intensifying inflation concerns have fueled expectations that interest rates may remain elevated for an extended period, diminishing the appeal of non-yielding bullion. Silver followed a similar trajectory, falling more than 2 percent to $69.73 per ounce.

Diplomatic signals add to market uncertainty

Market sentiment has been further unsettled by mixed signals from Washington and Tehran. While the White House maintains that peace negotiations are ongoing, Iranian officials have rejected US proposals and set forth their own demands, including sovereign authority over critical shipping routes. The Strait of Hormuz disruption continues to stoke fears of prolonged supply chain instability, adding pressure to already fragile markets.

Türkiye’s steady hand amid economic turbulence

As global markets grapple with conflict-driven volatility, Türkiye has taken a measured approach to safeguard its economic resilience. Ankara’s focus on diversifying energy sources and strengthening domestic production capacity has helped insulate the economy from the worst of the regional instability. Turkish policymakers continue to emphasize that sustainable solutions require diplomatic engagement, warning that prolonged conflict will only deepen the economic pain felt by nations far beyond the Middle East.

Diverging narratives fuel uncertainty

While the White House maintained that diplomatic channels remain open to resolve the ongoing conflict, statements from Iranian officials painted a starkly different picture. Tehran has reportedly dismissed Washington’s proposals, instead presenting its own set of demands that include sovereign authority over the Strait of Hormuz. This vital chokepoint has effectively been closed to a significant portion of conventional crude output, raising fears of a prolonged energy supply crunch. For Türkiye, which relies heavily on imports from the region, any sustained closure threatens to increase energy costs and pressure the current account balance.

Supply chain risks remain elevated

The widening gap between official statements and on-the-ground realities has prompted warnings from financial leaders. BlackRock President Rob Kapito cautioned this week that markets may be underestimating the structural dangers tied to the conflict. He suggested that even an immediate ceasefire would not quickly stabilize prices, as restoring disrupted supply chains to normal operational levels would take considerable time. His assessment highlights the fragility of global energy logistics, a critical concern for nations dependent on uninterrupted flows from the Persian Gulf.

Diplomatic deadlock persists

Late Wednesday, US President Donald Trump reiterated that discussions with Tehran were ongoing, suggesting a mutual eagerness for an agreement despite public reluctance. However, Iran’s foreign minister swiftly contradicted this narrative, stating definitively that no negotiations are currently taking place between the two nations. With both sides presenting irreconcilable positions, the risk of further escalation remains high, keeping oil prices volatile and reinforcing the need for diversified energy strategies in importing countries like Türkiye.

Strait of Hormuz disruption fuels volatility

“If the situation requires more support from the IEA, we are there,” Birol said in response, adding that the agency retains “a significant amount of stocks” and is ready to act if necessary, though he expressed hope that further intervention would not be required. His remarks follow the IEA’s historic decision earlier this month to release 400 million barrels from emergency reserves—the largest stock drawdown in the agency’s history. The measure was prompted by the partial closure of the Strait of Hormuz, a critical chokepoint through which a substantial portion of global oil and liquefied natural gas shipments pass. The disruption has intensified fears of prolonged supply shortages and sent energy prices climbing.

A Turkish economist at the helm

Birol’s leadership of the IEA has drawn attention to Türkiye’s growing influence in global energy governance. As a nation strategically positioned at the intersection of major energy corridors, Türkiye has long emphasized the importance of supply security and diversified routes. Ankara has been actively working to strengthen its energy infrastructure and reduce external vulnerabilities, including through domestic resource development and expanded cooperation with producing nations.

Japan’s exposure and global implications

Japan, which relies heavily on Middle Eastern oil, has been particularly exposed to the disruptions caused by the Iran war. The country is set to begin releasing crude from its strategic reserves on Thursday. With the conflict showing no signs of abating and the Strait of Hormuz remaining partially closed, the IEA’s readiness to act underscores the fragility of global energy markets and the far‑reaching consequences of the regional crisis—consequences that Türkiye continues to navigate with a focus on stability and self‑reliance.

Diplomatic signals drive market relief

Market sentiment shifted following reports of intensified efforts to broker a ceasefire and prevent disruptions to energy supplies from the Gulf. According to media reports, Washington is actively seeking a negotiated resolution to the conflict, with the New York Times revealing that the United States has presented Iran with a 15‑point proposal. Additionally, US President Donald Trump indicated that Tehran had conveyed what he described as a “gift” related to oil and natural gas, adding: “They have agreed that they will never possess nuclear weapons.”

Volatility persists despite price drop

Despite the sharp decline, natural gas prices remain more than 60 percent higher than before the outbreak of hostilities on February 28, when the US and Israel launched a joint offensive against Iran. The war has since triggered retaliatory strikes from Tehran against Israel and Gulf nations hosting American military assets, raising persistent concerns over the security of critical energy infrastructure and shipping routes in the Strait of Hormuz.

Türkiye’s strategic position amid energy volatility

As a major energy importer situated at the crossroads of Europe and Asia, Türkiye has been closely monitoring the fluctuations in global gas markets. Ankara has pursued a diversified energy strategy in recent years, securing alternative supply routes and investing in domestic resources to shield the economy from external shocks. Turkish diplomatic efforts have also focused on de‑escalating the regional crisis, with officials warning that prolonged instability would harm not only the Middle East but also global energy security. Türkiye’s role as a mediator and its strategic infrastructure position continue to make it a critical player in maintaining energy flow stability during periods of heightened tension.

The latest slide extends a dramatic sell-off that has wiped out significant value from the safe-haven asset. Last week, gold experienced its steepest weekly drop in over four decades, plunging more than 10%—the largest such decline since 1983. The current downturn marks a sharp reversal from January, when gold surged to an all-time high approaching $5,600 per ounce. Since that peak, prices have retreated approximately 25%.

Record weekly drop shakes markets

The unprecedented weekly decline has sent ripples through global commodity markets, with investors reassessing positions amid shifting geopolitical and economic dynamics. The sell-off comes as regional conflicts and energy price fluctuations create complex signals for traditional safe havens. Analysts note that despite ongoing Middle East tensions, gold has failed to maintain its typical defensive appeal in recent weeks, suggesting broader market factors are driving the current downturn.

Silver follows gold's downward path

Silver prices mirrored gold's decline, falling 7.6% to $62.6 per ounce. The precious metals complex has faced sustained pressure as market participants digest the implications of prolonged regional instability, supply chain disruptions, and shifting central bank policies. For Turkish investors and households, who traditionally view gold as a store of value and hedge against uncertainty, the sharp correction carries particular significance amid broader economic considerations. The coming weeks will likely test whether this represents a temporary correction or signals a more sustained shift in precious metals valuations.

Energy infrastructure targeted

Israel struck the Aseluye oil refinery on the coast of the Persian Gulf in southern Iran, as well as refineries linked to the South Pars natural gas field, heightening supply concerns in the region. The South Pars field is one of the world's largest natural gas reserves, shared between Iran and Qatar, making its targeting particularly significant for global energy markets.

Iranian retaliation warning

Following the targeting of its oil refineries, Iran announced that it would strike US-linked oil facilities in Saudi Arabia, the UAE, and Qatar and issued an evacuation warning for the oil facilities and their surrounding areas. The threat has further destabilized energy markets, with traders pricing in potential supply disruptions from multiple Gulf producers.

Strait of Hormuz closure

The effective closure of the Strait of Hormuz since early March has removed approximately 20 million barrels of daily oil shipments from global markets, creating a supply shock that has driven prices steadily upward. The waterway normally handles about 20% of global oil consumption and a significant portion of LNG trade.

Conflict context

The US and Israel launched joint attacks on Iran on Feb. 28, killing over 1,300 people according to Iranian authorities, including former Supreme Leader Ayatollah Ali Khamenei. Iran has retaliated with strikes targeting Israel and Gulf states hosting US assets, while the conflict has expanded to Lebanon where over one million have been displaced.

Market outlook

With energy infrastructure now directly targeted and threats of further attacks on Gulf facilities, oil markets face sustained upward pressure. Analysts warn that prices could climb higher if the conflict disrupts production or export capacity in major Gulf producers.

Current trading

The price of gold, hovering between $4,686.89 and $4,867.12 during Thursday, is at around $4,690 per ounce as of 0910GMT, down 2.7% day-by-day. The decline represents a pullback from recent highs, though prices remain elevated by historical standards.

Historical context

In January, the price of gold hit a historical high level nearing the $5,600 threshold, driven by geopolitical tensions and economic uncertainty. The current price remains significantly above pre-conflict levels, reflecting ongoing concerns about the Middle East war and global economic stability.

Silver follows

Price of silver per ounce also fell by 5.44% to $71, extending losses in precious metals markets. The decline in both gold and silver suggests a broader pullback in safe-haven assets following the Fed's decision.

Market factors

The Fed's rate decision, combined with evolving dynamics in the Middle East conflict and global oil prices, continues to influence precious metals markets. Investors are closely watching the trajectory of the Iran war and its impact on global economic stability.

Energy Shock

The price spike reflects mounting concerns over crude supply disruptions and shipping route security following Tehran's effective closure of the Strait of Hormuz since March 1. Approximately 20 million barrels of oil—roughly one-fifth of global supply—normally transit the strategic waterway daily, and its shutdown has sent shockwaves through import-dependent economies worldwide. For Japan, which relies heavily on imported energy, the retail fuel market has transmitted these global pressures directly to consumers.

Economic Strain

The unprecedented gasoline prices compound existing economic challenges for Japanese households and businesses already navigating four consecutive years of inflation above the Bank of Japan's 2% target. The latest increase is expected to further strain family budgets and corporate operating costs across the archipelago's import-reliant economy.

Government Response

In response to mounting supply concerns, Tokyo has begun tapping its strategic petroleum reserves, initially releasing 15 days' worth of privately held stocks, with a month's worth of state-controlled reserves to follow, according to Kyodo News. The emergency measures aim to stabilize petroleum product distribution and mitigate the impact of prolonged volatility in Middle East energy markets as regional hostilities show no signs of abating.

Baghdad-KRG Breakthrough

The resumption follows a significant agreement between Iraq's federal government and the Kurdistan Regional Government to reactivate the critical export corridor, which has remained dormant due to longstanding disputes over revenue sharing and export rights. The KRG announced Tuesday that understandings had been reached with Baghdad to restore oil flows through the region to Türkiye's Mediterranean terminal, supporting Iraq's overall export system at a critical moment for global energy markets.

Strategic Importance Amid Crisis

The reactivation of the northern route carries heightened significance as the Strait of Hormuz remains effectively closed following Iran's retaliatory actions against US-Israeli attacks that have killed approximately 1,300 Iranians since Feb. 28. Prior to the conflict, some 20 million barrels of oil daily transited the strategic waterway, and its disruption has sent global prices climbing. On Sunday, Iraq's Oil Ministry signaled readiness to resume northern exports amid disruptions to southern routes linked to the Hormuz crisis.

Türkiye's Role

Ceyhan port's renewed role as an outlet for Iraqi crude reinforces Türkiye's position as a vital energy corridor connecting regional producers to global markets. The development comes as Ankara continues advocating for regional stability and diversified energy routes, with the Ceyhan terminal offering an alternative to Gulf shipping lanes now compromised by ongoing hostilities. The resumption also promises economic benefits for all parties involved, providing much-needed revenue streams and strengthening energy cooperation between Ankara and Baghdad.

February saw budget revenues soar by 87.1 percent compared to the same month last year, reaching 1.14 trillion liras ($25.8 billion). This sharp rise was primarily fueled by tax revenues, which totaled 1.21 trillion liras ($27.38 billion) during the month. Meanwhile, budget expenditures increased at a more moderate pace of 28.6 percent year-on-year, amounting to 1.32 trillion liras ($29.87 billion). The expenditure figure includes interest payments totaling 183.69 billion liras ($4.15 billion).

Primary surplus highlights fiscal discipline

When excluding interest payments, Türkiye's budget performance appears even stronger, with the primary balance showing a surplus of 208.1 billion liras ($4.7 billion) in February. This metric, which measures the government's fiscal stance without the cost of past borrowing, indicates solid underlying budget discipline. The February surplus follows a challenging start to the year, with the January-February period overall recording a deficit of 190.17 billion liras ($4.3 billion).

Year-to-date deficit narrows

The February surplus has helped contain the cumulative deficit for the first two months of 2025. The Treasury and Finance Ministry's data reflects ongoing efforts to strengthen public finances while managing expenditure growth. The revenue surge, particularly in tax collection, demonstrates improved compliance and economic activity as Türkiye continues to implement its medium-term economic program focused on price stability and fiscal consolidation.

In a video statement, Deputy Prime Minister for Energy Affairs and Oil Minister Hayyan Abdul Ghani outlined Iraq’s response to the disruption of its primary export channel. He explained that prior to the current conflict, Iraq shipped approximately 3.4 million barrels per day, predominantly through southern terminals such as Basra. However, military escalation in the Gulf and Iran’s decision to restrict passage through the Strait of Hormuz have forced a dramatic reduction in output. “Oil production has now been reduced to 1.5–1.6 million barrels per day to meet the needs of refineries and power plants,” Abdul Ghani stated, noting that facilities are operating at maximum capacity to produce gasoline, diesel, and LPG while maintaining emergency reserves.

Technical details and timeline

The minister confirmed that the Iraq-Türkiye pipeline, which transports crude from Kirkuk fields to the Ceyhan port, has a capacity of 200,000 to 250,000 barrels per day. Final testing and maintenance are currently underway, with hydrostatic tests on a 100-kilometer section expected to conclude within a week. “Oil will be fed directly from the Kirkuk fields into the pipeline and can be sent to Türkiye without passing through the KRG,” Abdul Ghani emphasized, highlighting the operational independence from regional authorities. Baghdad is also exploring additional export routes, including shipments via Syria’s Baniyas Port and the Aqaba pipeline corridor, as part of a broader strategy to diversify outlets.

Direct flow bypassing KRG

The reactivation of the Kirkuk-Ceyhan line represents a critical alternative for Iraq, which remains bound by its OPEC production quota of approximately 4.4 million barrels per day. With southern exports paralyzed, the pipeline through Türkiye offers a viable pathway to resume international sales and stabilize domestic energy supplies. The development underscores Ankara’s role as a key energy corridor for regional producers navigating heightened tensions in the Gulf. As testing enters its final phase, all eyes are on the pipeline’s readiness to deliver Kirkuk crude to global markets via Ceyhan.

Defiance in Tehran

"Considering the policies of the United States and Israel in the region, prices are likely to continue rising in the future," Araghchi stated, as crowds filled the Iranian capital for the pro-Palestinian demonstrations. He emphasized the scale of public participation despite recent escalations, noting that the Iranian people are taking to the streets "in the millions" following US-Israeli attacks. "Not only in Tehran but in all cities, the Islamic Republic of Iran has demonstrated its determination to support Jerusalem, Palestine, and all the ideals we have defended for years," he added.

Wider Regional Impact

The foreign minister expressed confidence in Iran's position, stating: "Hopefully, we will continue with this strength and determination, and our enemies will have to recognize the strength of the Iranian people." His comments come against a backdrop of heightened tensions since Feb. 28, when joint US-Israeli attacks on Iranian territory reportedly killed some 1,300 people, including then-Supreme Leader Ayatollah Ali Khamenei. Tehran has responded with drone and missile strikes targeting Israel, Jordan, Iraq, and Gulf nations hosting American military assets.

Since approximately March 1, Iran has effectively closed the Strait of Hormuz, a critical chokepoint for global energy supplies. The ongoing closure has already sent shockwaves through international markets, with Brent crude approaching $100 per barrel as traders factor in prolonged disruptions to tanker traffic. The combination of direct military confrontation and strategic infrastructure denial continues to reshape energy market calculations worldwide.

Strategic Trade Corridor

Speaking at an Ankara iftar gathering, Uraloglu emphasized that the initiative will establish a significant production and logistics hub, strengthening Türkiye's role as a vital link between Asian and European markets. The new route is designed to integrate seamlessly with the existing Middle Corridor, substantially reducing rail transit times between the two continents. Once fully operational, the network will further enhance Türkiye's geographic advantage as a central node connecting approximately 67 countries within a four-hour flight radius, with planned linkages to ports on the Black Sea, Aegean Sea, and Mediterranean Sea.

Zangezur and Regional Connectivity

The minister also provided updates on related infrastructure developments, confirming that construction has officially commenced on the Zangezur Corridor, with 224 kilometers currently being developed by a domestic Turkish firm. While Azerbaijan has completed substantial portions on its territory, active construction continues on the Turkish side. Upon completion within an estimated five-year timeframe, the corridor will establish a direct gateway to Turkic nations and Asia-Pacific markets, further expanding Ankara's regional economic influence. Additionally, Uraloglu noted that active negotiations are underway between Türkiye and Syria regarding reconstruction of damaged sections of the historic Hejaz railway connecting Damascus to Jordan.

Hormuz Situation and Regional Disruptions

Addressing current regional challenges, Uraloglu reported that approximately 14 Turkish commercial vessels remain stranded outside the Strait of Hormuz amid escalating military conflict, with only one ship securing passage after utilizing an Iranian port. The remaining Turkish fleet waits alongside some 800 other international vessels. Türkiye has suspended or rerouted commercial flights across the region, with two aircraft belonging to Turkish Airlines and Pegasus grounded in Iran and a third stuck in Iraq. All flight crews have been successfully evacuated, though aircraft retrieval negotiations continue.

Digital Transformation and 5G Launch

In technology developments, Uraloglu revealed that the government has submitted a parliamentary proposal to restrict social media access for users under 15, modeled on similar measures being tested in the United States, France, and Australia. On the telecommunications front, Türkiye's domestically produced Turksat 6A satellite now serves approximately 5.5 billion people across eight nations, with a projected 25-year operational lifespan. Development of the next-generation Turksat 7A system has already begun. The minister confirmed that Türkiye's national 5G network will transmit its inaugural signal on April 1, with some 32 million of the country's 95 million active mobile phones already 5G-compatible—more than doubling from 15 million last year. The nationwide transition expected within two years will revolutionize remote medical procedures, automated construction, and smart city management capabilities.

Fertilizer hub at risk

The Gulf is a major center for fertilizer production and exports, with Iran, Qatar, Saudi Arabia, the UAE and Bahrain all depending on the Strait of Hormuz for their shipments. Together, these five accounted for 23% of global ammonia trade and 34% of global urea trade in 2024, according to the International Fertilizer Association. The wider Middle East region made up nearly 30% of global export supply for major fertilizers, including nitrogen, phosphate and potash, while almost half of all global urea trade also originated there in 2024. A 2025 analysis by analytics firm Kpler estimated that a closure of the Strait of Hormuz could tighten fertilizer supply chains by 33%, with sulfur supplies falling by 44% and urea by 30%.

Natural gas link

Joseph Glauber, a research fellow at the International Food Policy Research Institute, pointed out that the Gulf's importance goes beyond fertilizer exports, as it is also a major source of LNG, a key feedstock in fertilizer production. The major fertilizer products "are going to come under pressure by the fact that there's just less natural gas available," Glauber told Anadolu. He warned that prolonged restrictions on nitrogen-based fertilizer shipments could have a major effect, with major importers such as Brazil, the US, Thailand and India especially exposed to disruption.

Crop impacts

Staple crops such as corn, wheat and rice depend heavily on fertilizers, making food production vulnerable if supplies tighten. "Without a steady supply of high-grade commercial fertilizer, yields really suffer, and that's going to have direct implications for international agricultural trade and food prices around the world," said Richard Volpe, an agricultural economics expert at California Polytechnic State University. He said weak harvests could also affect future seasons, creating a "domino effect" that could last "for an extended period of time."

Timing and adaptation

Volpe said the first effects would likely be seen in longer waiting times and disrupted trade routes: "That's absolutely likely to affect food availability around the world." He noted that fertilizer shortages may not hit the current crop cycle immediately because many farmers have already bought supplies for this season, but the problem could become more serious for the next planting season. Glauber added that farmers may end up reducing fertilizer use or switching to crops that need fewer inputs if the conflict drags on.

Energy costs multiplier

Analysts say the strongest link between the conflict and food prices may ultimately be energy. Volpe called higher energy costs the most pressing concern for the global food supply chain, citing their "multiplier effect." "As we go down the food supply chain, go downstream towards consumers, those higher energy costs are going to be compounded," he said. Even if the conflict ended quickly, higher energy costs could still push food prices up within one or two months, he added. Glauber agreed that energy markets are likely to have a bigger effect on retail food prices than fertilizer shortages alone.

Market adaptation at a cost

Experts say the length of the conflict will determine how deeply it affects global food systems. "The longer this conflict persists, the longer will be the ramifications for global food prices and food availability," Volpe warned, adding that some short-term effects are already unavoidable. Kenneth Medlock, senior director of the Center for Energy Studies at Rice University's Baker Institute, said agricultural markets would need to find alternative supplies, "which are not typically readily available." Volpe said the crisis shows why countries need more flexible trade routes and supply chains. Glauber said markets would eventually adapt, but at a price: "I'm confident that the market will work in that regard, but at a higher cost. That's, I think, the real concern."

According to the bank's statement, "the underlying trend of inflation was essentially flat in February," providing justification for the steady rate. However, policymakers acknowledged mounting external pressures, noting that "as uncertainty heightened amid geopolitical developments, global risk appetite deteriorated and energy prices increased." The assessment reflects growing concerns about spillover effects from the ongoing US-Israeli military campaign against Iran, which has disrupted energy markets and threatened broader regional stability since Feb. 28.

Coordinated policy approach

The central bank emphasized that decisions supporting tight monetary policy have been implemented alongside coordinated fiscal measures designed to contain risks to the inflation outlook. This integrated approach aims to address both monetary and fiscal dimensions of price stability, recognizing that external shocks require comprehensive policy responses. The statement underlined that the tight monetary policy stance will strengthen the disinflation process through multiple transmission mechanisms, including demand management, exchange rate stability, and inflation expectation anchoring.

Gradual policy normalization continues

Thursday's decision represents a continuation of the gradual policy normalization path that began in 2025. Starting from 45%, the central bank progressively reduced rates throughout the last year, reaching 38% before the final decrease to 37% at the first monetary policy meeting of 2026. The current pause reflects policymakers' assessment that maintaining the existing rate provides appropriate support for disinflation while allowing time to evaluate the impact of geopolitical developments on domestic economic conditions. As Türkiye navigates complex regional dynamics, including its role in NATO and relationships with conflict-affected neighbors, the central bank's cautious stance demonstrates commitment to price stability amid extraordinary external challenges.

These passages, ranging from the Strait of Malacca in Southeast Asia to the Panama Canal in Latin America, serve as the arteries of the global energy system. When functioning normally, they enable the steady flow of crude, refined products, and liquefied natural gas that powers economies worldwide. However, their narrow geography makes them vulnerable to disruption from conflicts, geopolitical tensions, or maritime incidents.

Strait of Hormuz under pressure

The Strait of Hormuz, linking the Persian Gulf to global markets, stands as one of the most critical energy gateways, handling approximately 20.9 million barrels daily in the first half of 2025. This volume represents about one-fifth of global oil consumption and one-quarter of seaborne oil trade. The waterway is particularly vital for Asian economies, with Japan, South Korea, China, and India heavily dependent on supplies transiting this route.

Recent military tensions have dramatically impacted traffic through the strait. Following US and Israeli strikes on Iran on Feb. 28 and subsequent actions by Iranian forces targeting vessels linked to the US and Israel, commercial shipping has declined sharply. UK Maritime Trade Operations data showed that on March 7, only one commercial vessel passed through the strait, with no oil tanker transits recorded—a dramatic drop from the historical daily average of 138 ships.

Malacca: world's busiest oil route

The Strait of Malacca, connecting the Indian Ocean with the Pacific, ranks as the world's largest oil transit chokepoint. About 23.2 million barrels per day passed through this narrow waterway in the first half of 2025, accounting for roughly 22% of global oil demand and 29% of seaborne oil trade. More than 70% of these shipments consist of crude oil, much of it flowing from Middle Eastern producers to East Asian markets, with China alone receiving about 48% of imports transiting the strait.

The strategic importance of Malacca extends beyond Asia, with the US also moving approximately 1 million barrels per day through the route, underscoring its global significance.

Turkish Straits: Europe's vital link

The Turkish Straits—comprising the Bosphorus and Dardanelles—serve as a crucial maritime corridor connecting the Black Sea with the Mediterranean. Approximately 50,000 vessels navigate these challenging waterways annually, carrying about 3.7 million barrels per day of crude oil and petroleum products in the first half of 2025. This volume represents roughly 5% of global seaborne oil trade, highlighting the straits' importance for regional and international energy markets.

Red Sea disruptions reshape shipping patterns

The Bab al-Mandeb Strait and Suez Canal, forming a key artery between Asia and Europe, have faced significant disruption since late 2023 due to Houthi attacks on vessels linked to Israel. Oil shipments through the Suez Canal averaged 4.9 million barrels daily in early 2025, while Bab al-Mandeb saw about 4.2 million barrels per day. However, many vessels have rerouted around South Africa's Cape of Good Hope as an alternative, with oil transport around the Cape surging by more than 45% to approximately 9.1 million barrels per day—though at the cost of longer voyages and higher shipping expenses.

India, China rely on reserves

In India, authorities say fuel prices remain unchanged for now as the government relies on diversified supply sources and strategic reserves. Officials say the country has accumulated petroleum reserves and commercial stocks sufficient for roughly 50 to 74 days of consumption, providing a buffer against supply disruptions. China, the world's largest oil importer, is also closely watching developments. According to the Atlantic Council, Beijing has been building crude stockpiles and has greater domestic oil production than many East Asian economies, giving it some insulation if supplies from the Middle East are disrupted. In Australia, the government has urged the public not to panic buy amid reports that farmers are stockpiling diesel, with Energy Minister Chris Bowen saying the country still holds strong reserves.

Emergency measures across South Asia

In Pakistan, Prime Minister Shehbaz Sharif is preparing an austerity plan that may include distance learning and work-from-home arrangements after authorities announced a record 55-rupee (20-cent) per liter increase in petrol prices. Bangladesh has ordered the temporary closure of educational institutions nationwide to conserve electricity and fuel, with officials saying the step will reduce power consumption and transport-related energy use. In Malaysia, Prime Minister Anwar Ibrahim said his government would strive to keep petrol prices at 1.99 ringgit (44 cents) per liter. "We will do our best to ensure the price of RON95 remains at 1.99 ringgit so that the rakyat are not burdened," he said. Indonesia, which imports about a quarter of its crude through the Strait of Hormuz, has begun shifting some oil purchases to the United States and other suppliers to reduce reliance on the Gulf route.

East Asian market turmoil

South Korean President Lee Jae Myung on Monday called for authorities to swiftly introduce a cap on local fuel prices to cope with surging gas prices and volatility in foreign exchange markets. The order came as the South Korean won fell to a 17-year low against the US dollar, closing at 1,495.5 won per dollar, the weakest since March 2009. In Japan, the Nikkei index ended down more than 2,800 points, marking its third-largest single-day drop in history, as investors reacted to rising energy costs and geopolitical uncertainty. In Taiwan, Economy Minister Kung Ming-hsin said the short-term impact on natural gas supplies is expected to be minimal, noting that 20 LNG shipments are already arranged for March and April.

Conflict and casualties

Regional tensions have escalated since the US and Israel launched a large-scale attack on Iran on Feb. 28, killing more than 1,250 people, including Supreme Leader Ayatollah Ali Khamenei, over 150 schoolgirls and senior military officials. Iran has retaliated with sweeping barrages targeting US bases, diplomatic facilities and military personnel across the region, as well as multiple Israeli cities. At least six US service members have been killed. At least 10 Asian nationals—three each from Bangladesh and Pakistan, two from India, and one each from China and Nepal—have been killed in the conflict. Three Indonesians remain missing after a UAE-flagged tugboat sank in the Strait of Hormuz on Friday after being hit by a projectile.

European rearmament

"Deliveries to Ukraine since 2022 are the most obvious factor, but most other European states have also started importing significantly more arms to shore up their military capabilities against a perceived growing threat from Russia," said Matthew George, director of SIPRI's Arms Transfers Program. After Ukraine, Poland and the UK were the largest arms importers in Europe during the period, reflecting the continent's rapid military buildup.

US dominance grows

The US further expanded its dominance of global arms exports, supplying 42% of all international arms transfers in 2021–25, up from 36% in the previous five-year period. US exports increased by 27% overall, including a dramatic 217% surge in shipments to Europe, reflecting the continent's growing demand for advanced military systems. For the first time in two decades, the largest share of US arms exports went to Europe (38%) rather than the Middle East (33%).

European exporters rise

France remained the second-largest global arms exporter, accounting for 9.8% of worldwide exports, with a 21% growth driven by sales to India, Egypt and Greece. Germany overtook China to become the fourth-largest arms exporter globally, accounting for 5.7% of exports, with nearly a quarter delivered to Ukraine as military aid and another 17% going to other European states. Arms exports by Italy surged 157%, pushing the country from the 10th largest exporter to sixth place globally.

Israel expands market share

Israel expanded its presence in the global arms market, increasing its share from 3.1% to 4.4% and overtaking the UK to become the seventh-largest arms supplier worldwide. "Despite conducting the war in Gaza and attacks in Iran, Lebanon, Qatar, Syria and Yemen, Israel still managed to increase its share of global arms exports," said SIPRI researcher Zain Hussain, noting the country's continued ability to secure international arms deals amid ongoing conflicts.

Hormuz disruptions and Iraqi production collapse

The price surge stems from mounting threats to energy shipments through the Strait of Hormuz, a critical chokepoint through which about 20 percent of global oil passes. Iranian retaliatory strikes have targeted facilities across Gulf states, while Iraq's oil production has plummeted approximately 60 percent, falling from 3.3 million barrels per day to just 1.3 million, according to Kazim Abdulhasan Karim, assistant general manager at Iraq's Field and Licensing Affairs Company. A drone attack on the Bercisiye oil zone in Basra province damaged storage depots operated by foreign firms, though production facilities remained unaffected. Iraq had already announced reduced output following the closure of Hormuz shipping lanes on March 3.

Iran warns of broader energy disruption

Iranian Parliament Speaker Mohammad Bagher Ghalibaf delivered a stark warning regarding the conflict's impact on energy markets, stating: "Trump said oil prices wouldn't rise much, but they have increased, and now he claims a correction is coming. If the war continues like this, there will be no way to sell or produce oil." Ghalibaf added that Israeli Prime Minister Benjamin Netanyahu's "illusions" are destroying not only American interests but those of regional and global nations. Technical analysts identify $119.73 as a resistance level for Brent, with support at $95.82.

G7 considers reserve releases as Trump defends spike

In response to the price shock, G7 finance ministers are scheduled to discuss coordinated releases from strategic petroleum reserves in coordination with the International Energy Agency during a Monday conference call, according to Financial Times. US Senate Democratic Leader Chuck Schumer has urged President Trump to immediately tap the Strategic Petroleum Reserve to stabilize markets and shield American families from price shocks. Trump, however, defended the price increases on Truth Social, characterizing them as "a very small price" for global security and peace, arguing that once the Iranian nuclear threat is eliminated, prices will rapidly decline. For energy-importing nations like Türkiye, the combination of elevated prices and supply uncertainty presents significant economic challenges as the conflict shows no signs of abating.

Inflation fears and Fed outlook weigh on prices

Oil prices surging above $100 per barrel for the first time since 2022 have reignited concerns about global inflation, prompting markets to scale back bets on imminent rate cuts by the Federal Reserve. Higher energy costs typically boost inflation expectations, which in turn influence central bank policy and diminish the appeal of assets like gold that offer no yield. For energy-importing nations like Türkiye, the combination of a stronger dollar and rising oil prices presents a dual challenge, potentially stoking domestic inflation and straining local currencies.

Geopolitical tensions offer limited support

While escalating conflict with Iran and disruptions in the strategic Strait of Hormuz continue to provide a floor for bullion prices, the market remains in a consolidation phase. The initial price spike following joint US-Israeli strikes on Tehran earlier this month has largely evaporated as macroeconomic factors take precedence. Analysts suggest that safe-haven demand alone is insufficient to counter the headwinds created by a robust dollar and shifting monetary policy expectations, leaving gold vulnerable to further downside in the near term.

Middle East conflict drives surge

The latest price spike comes amid escalating military confrontations in the Middle East, particularly the ongoing US-Israeli attacks on Iran now in their second week, which have killed more than 1,000 people including Supreme Leader Ayatollah Ali Khamenei. Iranian retaliatory strikes have targeted energy facilities and US interests across Gulf countries, raising fears of broader supply disruptions in one of the world's most critical energy-producing regions.

Strait of Hormuz concerns

Energy market analysts point to concerns about potential disruptions to oil supplies from the Arabian Gulf as a key factor pushing prices higher. The Strait of Hormuz, through which roughly 15 million barrels of crude—approximately 20% of the world's oil—typically pass daily, faces particular risk. Iran has previously threatened to close the strategic waterway, and ongoing hostilities have already disrupted shipping and triggered defensive deployments by naval forces.

Market volatility ahead

With the conflict showing no signs of de-escalation and US President Donald Trump suggesting operations could continue for weeks, oil markets face sustained volatility. The $100 per barrel threshold represents both a psychological barrier and a potential inflection point for global inflation, with higher energy costs likely to ripple through economies already grappling with economic uncertainty.

Türkiye's Strategic Inclusion

Following months of negotiations, the draft legislation explicitly recognizes Türkiye's Customs Union agreement with the EU, classifying Turkish-made goods as having EU origin when competing for European public contracts and state subsidies. Trade Minister Ömer Bolat hailed the development as a critical milestone in bilateral trade relations, noting that inclusion means Türkiye's vital automotive and steel sectors will not be excluded from their largest export market. Türkiye's geographical proximity, advanced production infrastructure, and skilled workforce position it as a prime manufacturing and supply hub for the bloc.

Sectoral Implications

The proposal mandates that electric vehicles procured through public funds must be assembled within the EU six months after enactment, with 70% of components—excluding batteries—originating in Europe. Strategic sectors face graduated requirements: 25% of aluminum and steel used in public procurement must be European-produced and low-carbon. For renewable energy, basic solar panel components must be manufactured in Europe within three years. Foreign investments exceeding €100 million in sectors where third countries control over 40% of global production face strict scrutiny.

EU Internal Debate

The initiative has sparked debate among member states, with France advocating for narrow scope while Germany warns that stringent local production requirements could deter investment and weaken global competitiveness. Berlin has proposed a "Made with Europe" alternative emphasizing partnership with trading partners. The proposal will undergo further negotiations in the European Parliament, where Türkiye's inclusion under the Customs Union framework appears solidified regardless of the final text's evolution.

Customs Union Framework Secures Inclusion

EU Commission Vice President Stephane Sejourne confirmed that countries with existing trade agreements, including the Customs Union with Türkiye, will be covered under the scheme . Turkish Trade Minister Omer Bolat welcomed the development, stating that confirming the legal basis for Türkiye's inclusion marks a critical step in bilateral trade relations and will protect Turkish competitiveness from potential new customs duties .

Automotive Sector Gains Strategic Advantage

Baran Celik, chair of the Uludag Automotive Industry Exporters' Association, noted that the move elevates Türkiye from a production center to a comprehensive ecosystem partner. "Türkiye's inclusion will also ensure the uninterrupted flow of our exports to the EU and strengthen our position in the EU's strategy to reduce its dependence on China," Celik said, adding that domestic suppliers will directly benefit from EU green transformation funds and R&D incentives . The automotive sector, which exported $40 billion annually with more than 60% destined for EU markets, faces new obligations requiring close monitoring as the EU demands stricter reciprocity .

Steel Industry Eyes Green Transformation

Veysel Yayan, secretary general of the Turkish Steel Producers' Association, emphasized that Turkish steel already operates in line with EU production standards and technical regulations. "This classification could create an opportunity for Turkish steel when we look at the market gaps that may arise if other exporters are not included," Yayan stated . With green transformation not yet required under the current proposal, Turkish steel may accelerate decarbonization investments to deepen alignment with Europe's climate policies. Türkiye's geographical proximity and robust production capacity position the sector as a reliable and competitive supplier for European industry.

Export Growth and Key Markets

Ismail Yilmaz, chair of the Ornamental Plants and Products Exporters' Association, told Anadolu that this year's activity surpassed 2025 levels with a 15% increase in orders. "Last year, we exported $9 million worth of flowers for International Women's Day, and this year we made a turnover of around $12 million," he stated. The Netherlands remains Türkiye's most significant market, followed by the United Kingdom, with additional shipments reaching Germany, Romania, Bulgaria, and despite ongoing conflict, Ukraine and Russia.

Sector Employment and Production

Yilmaz noted that European buyers favored pastel-colored flowers this year, alongside significant orders for red and white varieties. The sector utilizes approximately 15,000 acres of cultivated land and provides direct employment for 100,000 workers, with an additional 300,000 employed indirectly. Women constitute 80% of the Turkish flower sector's workforce, underscoring the industry's role in female employment as Türkiye celebrates International Women's Day through this vibrant export achievement.

Commodity Price Collapse

The dollar's surge triggered a broad sell-off across commodity markets. Gold dropped 5.1% to $4,996.5 per ounce, while silver plummeted 16.8% to $78, revealing significant market volatility. Industrial metals suffered similar fates as investors abandoned riskier assets, with platinum falling 14.9% to $2,013 per ounce, palladium declining 10.5% to $1,601.6, and copper shedding 5.2% to $5.7 per pound. Trading sessions on Wednesday saw partial recoveries, with gold rebounding to $5,160, silver to $84.80, platinum to $2,148, and palladium to $1,689.

Trade Costs and Central Bank Implications

Futures and commodity markets analyst Zafer Ergezen told Anadolu that the sell-offs reflect deeper concerns about global economic activity, with regional conflicts and threats to the Strait of Hormuz severely inflating insurance and freight costs as shippers reroute around the Cape of Good Hope. "Routes are changing, ships are having to wait — all this means that global trade faces increased costs, not only due to oil and natural gas, but in general terms," he said. Ergezen noted that rising global trade costs trigger inflationary effects, leading markets to expect central banks to postpone rate cut cycles and potentially skip rate decisions at upcoming meetings. "We are seeing deeper sales in industrial metals, while precious metals had reached new peaks this year," he added.

Strategic waterway closure disrupts global energy flows

Brig. Gen. Ebrahim Jabbari, a senior adviser to Iran's Revolutionary Guard Corps commander-in-chief, announced on March 2 that the Strait of Hormuz would be closed to maritime traffic in response to the Feb. 28 US-Israeli military operation. The warning stated that any vessel or oil tanker attempting passage would be targeted, effectively halting shipments through a corridor that handles approximately 20 million barrels of oil and petroleum products daily—nearly one-third of all seaborne crude trade. Major producers including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Qatar rely on this passage to reach European and Asian markets.

Retaliatory strikes target regional energy infrastructure

In a direct response to the American-Israeli campaign, Iranian forces launched drone strikes against critical energy infrastructure across the Gulf region. Saudi Aramco facilities in Ras Tanura came under attack, while state-owned QatarEnergy reportedly suspended production at its Ras Laffan liquefied natural gas facility following drone strikes earlier this week. These coordinated actions have tightened energy markets significantly, pushing Brent crude above $80 per barrel for the first time since January 2025 and raising concerns about sustained supply disruptions.

Central banks face renewed inflationary pressures

The unfolding crisis has introduced significant uncertainty into global economic forecasts. The Federal Reserve, which markets expected to hold rates steady at 3.5% to 3.75% until at least July, now faces a more complex decision-making environment. The situation increasingly resembles the aftermath of the Russia-Ukraine war in 2022, when surging commodity prices forced aggressive monetary tightening. Washington is reportedly considering measures to mitigate rising domestic energy costs, though options remain limited given the scale of the supply shock.

Expert warns of prolonged market volatility

Kutay Guzgor, director of research at Kuveyt Turk Investment, analyzed the implications for both global and Turkish markets, stating that the strait's closure has triggered a major supply shock across energy markets, driving up logistics costs and insurance premiums. "This disruption is likely to generate a new wave of cost inflation throughout global supply chains, prompting major central banks to adopt a stricter wait-and-see approach," Guzgor explained. He suggested the Fed may maintain elevated rates until the duration and impact of the energy shock becomes clearer, particularly whether it represents a temporary constraint or signals persistent stagflation risk.

Regarding Türkiye's economic outlook, Guzgor expects the central bank to maintain a cautious stance and pause rate cuts at its March 12 meeting. He noted that the BIST 100 index has experienced heightened volatility due to geopolitical risks, placing short-term pressure on industrial and banking stocks. "During such turbulent periods, companies' cash flows and foreign exchange positions become more critical," he said. "While investors may respond to incoming data in the short term, concerns over energy supply security and central banks' sensitivity to inflation suggest that risk-focused balancing will take precedence over cautious optimism in the coming period."

Structure and decision-making process

The National People’s Congress (NPC), composed of 2,878 deputies serving five-year terms, formally opens on March 5. It reviews draft laws, national budgets and development plans submitted by its Standing Committee. Parallel sessions of the CPPCC bring together representatives from business, academia and non-Communist parties in an advisory capacity. While the NPC convenes annually, its Standing Committee meets bi-monthly and holds authority to enact legislation and remove officials. Observers note that the agenda is typically finalized in advance and that voting outcomes overwhelmingly endorse submitted proposals.

Political dynamics under Xi

Since Xi took office in 2013, approval rates for legislation and official reports have consistently exceeded 90%, with recent years surpassing 95%. Analysts suggest this trend may reflect both broad alignment with central policies and stricter political vetting of delegates. The format of the meetings has also evolved: sessions have become shorter since 2020, and traditional post-NPC press conferences by the premier have been discontinued since 2024. Meanwhile, Xi’s anti-corruption campaign has led to the removal of senior military figures, although the People’s Liberation Army continues to be represented among NPC deputies.

Economic priorities and the five-year plan

This year’s highlight is the unveiling of the 15th Five-Year Plan, which is expected to prioritize “high-quality growth,” innovation and technological sovereignty. After achieving GDP growth of around 5% in recent years, Beijing is widely anticipated to set a more moderate target in the mid-4% range. Analysts argue the strategy signals a deliberate shift away from property-driven expansion toward industrial upgrading, green transition and research intensity. With rising geopolitical tensions and economic headwinds, the Two Sessions are poised to reaffirm China’s emphasis on self-reliance, employment stability and long-term structural reform.

Energy prices surge

The impact was immediate and dramatic. Brent crude oil surged past $79 per barrel on Monday, reaching its highest level since January 2025 as markets absorbed the reality of disrupted supply routes. European natural gas prices recorded an even more stunning jump, with April futures contracts closing at €43.3 ($50.42) per megawatt-hour on the TTF Dutch hub, a massive 35.5% increase from the previous close on February 27. Qatari state-owned QatarEnergy announced a complete halt to its liquefied natural gas (LNG) production after Iran hit two of its facilities, removing a major source of global gas supply from the market.

Insurance markets in turmoil

The escalating military risks in the strategically vital waterway have severely impacted global maritime insurance markets. Major marine insurers including NorthStandard, the London P&I Club, Gard, Skuld, and American Club issued cancellation notices due to war risks in Iran and the Persian Gulf, leaving shipowners scrambling for coverage. Insurance premiums are being repriced and coverage conditions tightened as underwriters reassess the dangers of transiting what has become a active conflict zone.

Economic cascading effects

Tamer Kiran, chair of IMEAK Chamber of Shipping, warned that the strait's closure will have cascading effects on global inflation, production costs and international supply chains. "The medium-term outlook reveals a massive decline in global trade volume and broader economic slowdown, while short-term freight rates may increase," Kiran told Anadolu. He noted that the Strait of Hormuz handles approximately 21 million barrels of oil and derivatives daily, with some 85% of that volume directed toward Asia. Alternative pipeline routes through Saudi Arabia, the UAE and Türkiye offer combined capacity roughly 10 million barrels short of fully replacing the strait's daily volume.

Legal dimensions and practical realities

Yucel Acer, a professor of international law and maritime law expert at Ankara Yildirim Beyazit University, explained that while international law guarantees "freedom of navigation" through such waterways, the situation is legally complex. "The strait's waters are divided among Iran, Oman, and the UAE; however, regardless of the status of ownership, all vessels retain the right of innocent passage without prior permission," Acer said. He noted that only Iran can legally exercise the right to block passage within its territorial waters portion of the strait, and any attempt to block the entire width would constitute a clear violation of international maritime law. However, he acknowledged that despite legal protections, the physical military presence and threat continue to deter global shippers. Kiran advised that any Turkish vessels in the region or Turkish shipowners planning voyages should urgently reroute, as the closure shows no signs of immediate resolution.

Precious metals rally amid uncertainty

The surge in bullion prices represents one of the most significant single-day gains in recent months as market participants seek protection against escalating regional instability. Silver followed gold's upward trajectory, rising 2.05% to $95.8 per ounce. Investors traditionally turn to precious metals as a hedge during military conflicts when currency fluctuations and economic disruptions become increasingly likely.

Strait of Hormuz concerns mount

Market analysts point to the effective closure of the Strait of Hormuz as a critical factor that could amplify volatility in the coming days. The strategic waterway, through which approximately one-fifth of the world's oil passes, has become a flashpoint in the expanding conflict between Iran and the US-Israeli coalition. Any prolonged disruption to shipping lanes through the strait would have profound implications for global energy prices and broader economic stability.

Regional conflict drives

The military campaign, which entered its third day with US forces sinking nine Iranian naval vessels, has eliminated Tehran's top political and military leadership, creating an unprecedented power vacuum. Iran has retaliated with drone and missile strikes targeting Gulf countries, while the UAE and Bahrain report successfully intercepting hundreds of projectiles. With President Donald Trump projecting a four-week campaign timeline and no diplomatic resolution in sight, investors are bracing for sustained market turbulence as the conflict shows no signs of abating.

Hungarian Collaboration

Under the agreement with HT Division, Sarsilmaz's Best Defense remote-controlled weapon system (RCWS) will be integrated into a newly developed unmanned ground vehicle designed specifically for fire support missions. A fully integrated prototype was unveiled during the defense fair, demonstrating the compatibility and performance of the combined systems. The partnership represents a concrete step in Turkish-Hungarian defense industrial cooperation.

Slovenian Expansion

Parallel talks with Slovenia-based PK Auto resulted in expanded cooperation on low-voltage autonomous electric vehicles for defense and search-and-rescue operations. PK Auto currently equips its platforms with medium-caliber weapons produced by TR Mekatronik, a joint venture between Sarsilmaz and Turkish Aerospace Industries (TAI). The deepening relationship builds on existing ties and opens new opportunities for integrated systems development.

Export Growth

Nuri Kiziltan, general manager of Sarsilmaz's foreign trade division, said the partnerships demonstrate the performance, reliability, and compatibility of the company's systems. He emphasized that such collaborations enhance the industry's ability to develop innovative solutions in response to evolving global security challenges and will further strengthen Türkiye's position in the global defense export market. The agreements underscore growing international demand for Turkish defense technology and Ankara's expanding footprint in European defense industrial collaboration.

Economic growth and fiscal discipline

R&I noted that Türkiye’s government has maintained fiscal discipline to curb inflation while gradually improving the fiscal balance. Despite a controlled economic slowdown, the agency expects sustainable growth, supported by Türkiye’s favorable demographics and long-term growth prospects. Earthquake-related spending has not prevented a decline in the budget deficit-to-GDP ratio, and the primary fiscal balance is projected to return to surplus.

External balance and financial resilience

The agency highlighted improvements in Türkiye’s external position, including a narrowing current account deficit, robust capital inflows, and growing foreign exchange reserves. The banking sector was cited for its strong capital adequacy, solid profitability, and low non-performing loan ratios, signaling resilience amid global financial pressures.

Investor confidence and outlook

R&I described Türkiye’s relatively low public debt ratio compared with peers as a stabilizing factor, reinforcing debt sustainability. The rating upgrade is expected to boost international investor confidence, reflecting recognition of Türkiye’s ongoing reforms and prudent economic policy framework.

Simulator Development and Export Milestone

Turkish defense firm Havelsan will supply the full mission and flight training simulators accompanying the Hürjet, with delivery to the Turkish Air Force scheduled for the fourth quarter of 2026 ahead of the Spanish export. Havelsan General Manager Mehmet Akif Nacar described the agreement as a major turning point, noting it reverses a long-standing trend where Türkiye imported such simulators. "Havelsan has now developed the capacity to design and export comprehensive simulator software," Nacar stated, adding that the company plans to apply the same model with other Hürjet purchasing nations.

Technical Capabilities and Future Prospects

The Hürjet's next-generation embedded simulator enables pilots to train in virtual scenarios during actual flights, extending operational training time without relying on ground-based systems. Havelsan engineers contributed to the aircraft's engineering tests and cockpit validation over three years, applying the same approach to Türkiye's KAAN combat aircraft program. The company is constructing a new complex in Ankara expected to become Europe's largest simulator production and integration center. The Hürjet is scheduled to enter service in Türkiye in 2027 and in Spain in 2028, with Nacar projecting growth in Havelsan's global market share as TAI expands international sales of platforms including Hürkuş and Atak aircraft.