Economy
Top Turkish officials to meet investors in London amid Iran war
Türkiye’s top economy officials are due to meet investors in London this week, with investors set to watch their comments closely amid the Iran war, a report said on Monday.
Treasury and Finance Minister Mehmet Şimşek and Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan will present Türkiye’s disinflation-focused economic program and answer investors’ questions, Reuters reported.
They will hold both investor meetings and one-on-one discussions during the trip, the report said, citing sources.
The meetings come as investors closely monitor the Turkish authorities’ response to the month-long U.S.-Israel war on Iran, particularly its impact on inflation, the current account deficit and financial markets.
The Treasury and Finance Ministry confirmed the London meetings but did not provide further details.
During the meetings, Şimşek and Karahan are expected to tell investors that the government remains committed to prioritizing its economic program and disinflation policies.
Their presentations are also expected to highlight the strengths of the Turkish economy, while addressing investor concerns about the potential fallout from the conflict.
The economic management last held similar meetings in January in the United Kingdom and the United States as part of regular outreach efforts to international investors.
Since the conflict began, Turkish authorities have taken several measures aimed at limiting the impact on markets. Those measures have helped keep the Turkish lira relatively stable. Since the start of the conflict, the lira has weakened by only around 1.3% against the U.S. dollar.
The central bank this month halted its easing cycle, keeping its benchmark rate at 37% due to inflation risks linked to fallout from the war that has engulfed the region and slashed global energy supplies.
Annual inflation was 31.5% in February after a gradual decline from 75% in 2024, the year in which the CBRT began slowly cutting rates.
Türkiye is positioned to become a technology and investment hub attracting foreign capital, as regional and global economic developments are driving a shift in that direction, according to a council chair at a major Turkish business body on Monday.
“On the route of foreign capital, Türkiye is in a position to become a natural technology and investment base. For Istanbul to turn into a finance and technology center, the public and private sectors need to act together,” said Erdem Erkul, the head of the Digital Technologies Business Council at Foreign Economic Relations Board (DEIK).
“With joint investment models and new generation fund structures, Türkiye can attract this capital,” he told Anadolu Agency (AA).
In the statement, he pointed out that on a global scale, capital, entrepreneurs, and technological infrastructure are rapidly relocating.
Explaining that the critical situation created, especially in the U.S., Europe, and the Gulf line, has led to a new economic equation, Erkul said that this contains both risks and new opportunities for countries involved in global competition.
Moreover, he emphasized that competition now occurs not only between companies but also between cities, countries, and ecosystems. He noted that due to recent accelerated geopolitical fractures, changes in global trade balances, and the effects of the new artificial intelligence-centered economic order, Türkiye’s position needs to be redefined.
He went on to say that Türkiye is in a process not only as a country that regulates but also as a center attracting more entrepreneurs, gathering capital, and producing technology.
“Whoever enables company establishment faster, provides a stronger digital infrastructure, and gives more confidence to entrepreneurs is the winner,” he maintained.
In this context, Erkul opined that it is “important” for Türkiye to simplify its entrepreneurship and technology policies.
“From company establishment to the tax system, from the investment environment to the international legal infrastructure, a new approach has become obligatory in many areas. With a fully digital, cross-border-compliant, and multilingual company establishment infrastructure, Türkiye can become one of the top choices for global entrepreneurs,” he further said.
Incentive models
Erkul also highlighted that Türkiye should move beyond its traditional incentive models and establish an entrepreneur-friendly, predictable, and competitive structure.
He pointed out that regulations related to stock options, company sales processes, and income tax could transform the country into a regional attraction center, also adding that creating a fast and reliable visa mechanism for entrepreneurs is also a key part of this transformation.
Additionally, he also stated that artificial intelligence and data center investments have become the core determinants of the new economy.
He emphasized that the new form of capital is computing power and noted that it is not possible to attract entrepreneurs without establishing a data center or building a strong artificial intelligence infrastructure.
Erkul also suggested that Türkiye needs to reconsider its energy, infrastructure, and incentive policies in this area.
“Establishing a strong national cloud-based artificial intelligence ecosystem is of strategic importance. Türkiye needs to be a center not just for starting enterprises but also for scaling them and enabling global exits,” he noted.
“Deepening the capital markets, integrating with international stock exchanges, and strengthening the legal infrastructure to increase investor confidence are critically important,” he added.
‘New economic order’
Furthermore, Erkul said that the world “is entering a new economic order,” conveying that in this order, “speed, scale, and trust are the three most critical factors.”
“If Türkiye takes the right steps, it can achieve regional hub status in a very short time,” he added.
Erkul also said that, as the Digital Technologies Business Council, they continue to work with the public, private sector, and international stakeholders to implement this approach that will accelerate Türkiye’s technology-focused economic transformation.
Stating that as the council, they are working for Türkiye to become the most important part of the global artificial intelligence infrastructure, Erkul concluded his remarks by saying: “As Türkiye, we need to become the production, data, energy, and access corridor of the artificial intelligence era.”
“As the business world, we are ready to fulfill our responsibilities.”
Oil prices continued to rise on Monday as Brent crude headed for a record monthly gain, after Yemeni Houthis launched their first attacks on Israel over the weekend, widening the U.S.-Israel war with Iran in the Middle East.
Brent crude futures jumped $3.94, or 3.5%, to $116.51 a barrel at 0703 GMT after settling 4.2% higher on Friday. U.S. West Texas Intermediate was at $102.14 a barrel, up $1.86, or 1.87%, following a 5.5% gain in the previous session.
Global stocks, meanwhile, were in limbo as investors dug in for a conflict they fear will bring a spike in inflation and the risk of recession to much of the globe.
“The market has all but discounted the prospect of a negotiated end to the war, (U.S. President Donald) Trump’s claims of ongoing ‘direct and indirect’ talks with Iran notwithstanding, and is bracing for a sharp escalation in military hostilities, which is a bullish signal for crude, with huge uncertainties on the timing and nature of the outcome,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Trump said the U.S. and Iran have been meeting “directly and indirectly” and that Iran’s new leaders have been “very reasonable,” as more U.S troops arrived in the region, while the Israeli military said on Monday it is attacking the Iranian government’s infrastructure throughout Tehran.
Brent has soared 59% this month, the steepest monthly jump, exceeding gains seen during the 1990 Gulf War, after the Iran conflict effectively closed the Strait of Hormuz, a conduit for a fifth of the world’s oil and gas supplies.
The war, launched on Feb. 28 with U.S. and Israeli strikes on Iran, has spread across the Middle East, raising concern about shipping lanes around the Arabian Peninsula and the Red Sea.
The Financial Times late on Sunday quoted Trump saying the U.S. could seize Kharg Island in the Persian Gulf, from where Iran exports much of its oil, but also that a cease-fire could come quickly.
The Israeli military on Monday said Iran launched multiple waves of missiles at Israel and an attack had also been launched from Yemen for only the second time since the war began.
“The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends into the Red Sea and the Bab el-Mandeb – one of the world’s most crucial chokepoints for crude and refined product flows,” JPMorgan analysts led by Natasha Kaneva said in a note.
Saudi crude exports redirected from the Strait of Hormuz to the Yanbu port in the Red Sea reached 4.658 million barrels per day last week, data from analytics firm Kpler showed.
If exports from Yanbu were disrupted, Saudi oil would need to pivot toward Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean, JPMorgan analysts said.
Attacks in the region escalated over the weekend and damaged Oman’s Salalah terminal despite efforts to start cease-fire talks.
Pakistan said it was preparing to host “meaningful talks” to end the conflict over Iran in the coming days, even though Tehran accused Washington of preparing a land assault as the U.S. military builds up forces in the region.
Separately, Vietnam’s Binh Son Refining and Petrochemical on Monday said it is in talks with Russian partners to buy crude oil. The company said it would also buy more crude oil from Africa, the U.S. and Southeast Asia.
Stocks in limbo
Meanwhile, shares across Asia fell, with Japan’s Nikkei index closing down 2.8%, in a region more reliant on Gulf oil exports. European stock markets were firmer in early trading and Wall Street futures pointed to gains, although they were slim given a recent sell-off.
“Oil is the lightning rod right now,” said Eren Osman, managing director of wealth management at Arbuthnot Latham, adding a reopening of the Strait of Hormuz was the key to calming world markets.
“The biggest challenge for us as investors today is that you’ve got one of the widest ranges of potential outcomes,” he said, adding he did not expect a prolonged conflict as he believed Trump had a “pain threshold” for market losses.
Madison Cartwright, senior geo-economics analyst at Commonwealth Bank of Australia, said Iran’s control of the Strait of Hormuz nonetheless gave it little incentive to concede and the bank expected the war to run until at least June.
The clampdown on the Strait has sent prices for oil, gas, fertilizer, plastic and aluminium surging, along with fuel for planes and shipping. Prices for food, pharmaceuticals and petrochemical products are all set to rise.
That is particularly bad news for Asia, as much of the region is highly dependent on energy from the Middle East.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.8%.
European stocks were last up 0.3%, while S&P 500 futures and Nasdaq futures pointed to gains of about 0.5% apiece.
“The longer the Strait remains closed, the sharper the drawdown in buffer supplies that could spark dramatic increases in the price of crude oil, natural gas and other commodities,” warned Bruce Kasman, global head of economics at JPMorgan.
“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply.”
Fed in focus as payrolls loom
The inflationary threat has led investors to revise up the outlook for interest rates almost everywhere. U.S. Federal Reserve (Fed) Chair Jerome Powell will have a chance to air his own views at an event later on Monday and the influential head of the New York Fed, John Williams, is also talking.
Data on U.S. retail sales, manufacturing and payrolls this week will provide an update on how the economy is faring. The energy shock, combined with pressure on fiscal budgets from higher borrowing costs and the need for more defence spending, has hit sovereign bond markets. Ten-year U.S. Treasury yields were last at 4.3959%.
Heightened volatility in markets has tended to benefit the U.S. dollar as the world’s most liquid currency. The U.S. is also a net energy exporter, giving it a relative advantage over Europe and much of Asia.
The dollar index was trading near a 10-month high at 100.26, broadly flat on the day. Yet more warnings of possible intervention from the Japanese authorities did see the dollar ease 0.3% to 159.775 yen. It crossed the 160 barrier last week for the first time since July 2024, when Japan last acted to buy yen.
The euro dipped 0.1% to $1.1493, not far from a March trough of $1.1409.
In commodity markets, gold gained 0.9% to $4,534 an ounce, having recently drawn scant support as a safe haven or as a hedge against inflation risks.
Türkiye will provide interest-free financing support through regional development agencies as part of efforts to accelerate the country’s green transition and support vulnerable groups, a senior official said on Monday.
The new support package worth about TL 3 billion (over $67 million) will be launched simultaneously across 31 provinces through 10 regional development agencies under the Socially Inclusive Green Transition Project, Industry and Technology Minister Mehmet Fatih Kacır said.
The project, known as SoGreen, is being implemented in cooperation with the World Bank and has a total budget of $400 million.
“We are announcing a TL 3 billion Interest-Free Financing Support Program simultaneously in 31 provinces through 10 of our development agencies,” Kacır wrote on the social media platform NSosyal.
Focus on women, youth, green industries
The minister said the program is designed to support employment among groups expected to be most affected by the green transition, particularly women and young people.
He said the financing would also encourage investments in priority sectors related to resource efficiency, cleaner production, the circular economy and emissions reduction.
According to Kacır, the initiative is intended to accelerate Türkiye’s shift toward a greener economy while also strengthening social inclusion.
Kacır said development agencies are playing a key role in supporting green transformation and inclusive growth across all 81 provinces under the government’s local development strategy.
He said the government would continue contributing to local prosperity by backing projects that support both environmental sustainability and economic development.
The Turkish economic confidence index decreased 2.8% month-over-month to 97.9 in March, according to the official data released by the country’s statistical office on Monday.
The index stood at 100.7 in February and 99.4 in January, according to the Turkish Statistical Institute (TurkStat).
All sub-indices posted declines in March, with the real sector and construction confidence indexes both dropping 3.9%.
Consumer confidence edged down 0.8%, while services and retail trade confidence indices fell 0.5% and 2%, respectively.
The economic confidence index, a composite indicator of the country’s overall economic situation, indicates an optimistic outlook when above 100 and a pessimistic one when below 100.
Iran plans to overhaul the governance of the Strait of Hormuz to secure long-term economic and security advantages, Vice President Mohammad Reza Aref said Sunday.
“The Strait of Hormuz regime will no longer be as it was in the past,” Aref wrote on X, adding that the government aims to “transform the battlefield achievements into sustainable economic and security benefits for the country.”
He said efforts by Iran’s opponents to bring about political change in Iran had merely led to “regime change in Hormuz.”
According to Iranian sources, future transit through strait could be restricted to ships whose owners are not involved in the war against Iran, while ships linked to states or actors that Tehran regards as supporters of the war would be barred.
The Iranian parliament is also planning legislation to introduce a toll system for the waterway, the sources said.
The Strait of Hormuz has become a focal point in the current US-Israeli war with Iran. Tehran has repeatedly attacked vessels in the waterway, effectively closing off a key shipping route for global oil and gas supplies.
The narrow passage between Iran and Oman is the only link between the Gulf and the world’s oceans and is regarded as one of the most important shipping routes globally, with around 20% of the world’s oil supply normally passing through it.
Threats to ships in the crucial Strait of Hormuz amid war in Iran and broader regional conflict significantly raised payments for the insurance that underpins the global freight industry.
Here are facts and figures about how maritime insurance works, and the impact from the war sparked by U.S.-Israeli strikes on Iran, which has virtually cut off shipping in the strait.
Insurance available
After the fighting broke out on Feb. 28, some insurers served so-called cancellation notices for war risk policies to “reassess … and then reinstate that cover at adjusted terms,” the International Union of Marine Insurance (IUMI) said in a statement.
Despite the name, “a ‘Notice of Cancellation’ does not, necessarily, end the cover. War cover remains available for owners and operators wishing to take it.”
Executives in London, the world’s top shipping insurance market, insisted that captains were avoiding the route to protect their crews, not because they could not get insured.
“Safety concerns, not insurance availability, (are) driving reduced vessel traffic,” headlined the Lloyd’s Market Association (LMA), a trade body for the London ship insurance industry, in a report.
The price of such policies to cross the strait has shot up, however, according to industry players.
Surging premiums
Before the current Middle East conflict, a war risk premium would typically have cost less than 1% percent of the vessel’s so-called hull value.
Now, war risk insurance could run into tens of millions of dollars for a single trip through the Hormuz Strait.
Premiums have surged for ships seeking special cover to cross the strait, according to Robert Peters of U.K. maritime consultancy Ambrey, which has an insurance arm.
“I’m not sure the market has settled on an agreed range,” he added, noting figures typically range “from 5% down to 1%.”
David Smith, head of the marine arm at specialist insurance broker McGill, meanwhile, estimated it at “anywhere between three and-a-half and 10%.”
“It is going up and down almost on an hourly basis,” he told Agence France-Presse (AFP).
Cargo insurance rates have followed the same trajectory.
“A brand new LNG (liquefied natural gas) ship could be worth $200 million to $250 million alone, and then a cargo could be worth the same again,” Smith noted.
Fivefold cover
Commercial ships typically need several separate insurance policies.
Hull cover insures against loss or damage to the vessel, while protection and indemnity (P&I) acts like third-party liability coverage.
The cargo on board, from petrochemicals to containers, also requires insurance.
In addition, ships need war risk insurance, typically an annual premium, but that does not cover ships entering the most active conflict zones, known as “listed” areas.
To do that, they must renegotiate another war risk premium.
“The annual (war risk) premium is not designed for a crisis,” said Neil Roberts, head of marine and aviation at the LMA.
Danger zones list
In early March, London’s marine insurance market widened the “listed” areas in the Gulf region.
The system “enables underwriters to respond quickly and proportionately to areas of increased risk,” said Roberts, who sits on the committee that updates the list.
To price war risk premiums, underwriters are considering numerous factors such as the type, flag and owner of the vessel, as well as its size, speed and cargo.
“We have seen some quotes where the underwriter has actually warranted that the vessel goes through at… full throttle,” said Smith.
“That is deemed to be an improvement in the risk factor.”
No buyers
Ships normally have 24 hours to buy insurers’ quotes for listed area entry, but that has narrowed to 12 hours for Hormuz, Smith said.
“You line your ship up, you turn the engine on, you get ready to make a charge, then you’ll get your quote,” he said.
But currently “no one is buying,” he added, saying one underwriter reported to him less than 1% uptake for Hormuz-related policies.
U.S. insurance scheme
A U.S. shipping insurance initiative to boost Hormuz crossings will begin operating soon, Treasury Secretary Scott Bessent said Thursday.
U.S. President Donald Trump previously announced the scheme would involve naval escorts and urged Western and other powers to step up. But they have proved unwilling while the conflict rages.
If a crossings framework with military protection could be agreed and proven effective, insurance “rates would tumble very, very quickly,” Smith predicted.
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