Turkish technology company Pasifik Teknoloji announced a major agreement to sell tens of thousands of its FPV kamikaze drones to an unnamed foreign country, marking its first defense export deal that sent its shares sharply higher on Tuesday.

In a regulatory filing late on Monday, the company said it had signed an agreement with a technology and defense institution from a “friendly and allied” country.

Under the deal, Pasifik Teknoloji will export 100,000 FPV kamikaze drone systems branded Merküt.

The agreement also includes 10 Alpin unmanned helicopters, 25 Dumrul mini unmanned helicopters, 500 Deli tactical kamikaze systems and 500 Korgan autonomous ground support and surveillance units.

The company said the agreement marks its first export in the defense industry.

Pasifik Teknoloji shares rose 9.96%, hitting the daily upper trading limit after the announcement.

In a note, brokerage firm Global Menkul Değerler said the deal was viewed positively as it represents the company’s first defense export and could strengthen its positioning in international markets.

Financial details of the agreement and the identity of the buyer country were not disclosed.

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A Turkish firm unveiled a long-range kamikaze unmanned aerial vehicle for the first time on Tuesday, bringing a national capability to long-range strike UAV systems.

Named Kuzgun, the drone has been developed for deep-strike missions and features a range of more than 1,000 kilometers (621 miles), its manufacturer STM said.

It also boasts a high-explosive warhead designed to deliver strong effects against strategic targets.

The platform made its debut on the sidelines of the SAHA 2026 defense trade show.

STM General Manager Özgür Güleryüz said global and regional crises have once again shown the decisive role of long-range and cost-effective strike systems on the battlefield.

“With Kuzgun, our long-range kamikaze UAV system developed for this need, we aim to take our country’s strategic deterrence to the next level,” Güleryüz said.

He said the system will be capable of autonomously neutralizing critical targets, from command centers to air defense and radar elements.

“Kuzgun, equipped with our national software, electronic warfare-resistant navigation system, and low-altitude flight capability, will operate with the goal of full precision even in the most challenging geographies,” he added.

Named after the raven, a bird known for sharp intelligence, high observation ability, and strategic speed, the drone is designed as a quiet but effective force multiplier on the modern battlefield.

The system was developed for cross-border operations and strikes against critical targets behind enemy lines, while its aerodynamic structure provides high survivability, according to STM.

Kuzgun can be launched with rocket-assisted takeoff from mobile land platforms or fixed launchers without the need for runway infrastructure, increasing operational flexibility.

With an endurance of more than six hours, the system can conduct rapid and effective attacks against distant targets, the company said.

Optimized for conflict zones with intense GNSS jamming, Kuzgun stands out for its jamming-resistant navigation architecture.

The system can carry out fully autonomous flight according to predefined route and target information and reach its target with GNSS-supported precision coordinate-dive capability.

Despite its 200-kilogram total weight, the drone offers high speed and is expected to become an important element in strategic operations with its high-destructive-power munition.

According to STM, Kuzgun can fly for six hours, with a takeoff weight of 20 kilograms and an operational altitude of 3,500 meters above mean sea level.

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EU Energy Commissioner Dan Jorgensen warned on Tuesday of the rising energy costs for the bloc triggered by the war in Iran and the subsequent blockade of the Strait of Hormuz.

“Since the outbreak of the conflict in the Middle East, the European Union member states have already spent over 30 billion euros (more than $35 billion) more on fossil fuel imports without receiving any additional supply,” Jorgensen told journalists in Brussels on Tuesday.

“The world is facing what is arguably the most severe energy crisis ever, one that is testing the resilience of our economies, our societies, and our partnerships,” he said.

Roughly a fifth of the world’s traded oil and liquefied gas normally passes through the Strait of Hormuz.

Since the start of U.S.-Israeli attacks on Iran, Tehran has effectively halted shipping through the chokepoint through threats and attacks, while Washington has imposed a naval blockade on vessels entering or leaving Iranian ports.

In addition, energy production facilities in several Gulf countries have been damaged by Iranian strikes in the past months.

European Commission President Ursula von der Leyen recently said the conflict and the Hormuz closure is costing the EU almost 500 million euros a day, raising prices at the pumps and fears of a jet fuel shortage within weeks.

Jorgensen warned of the long-term consequences of the damage, saying gas production in the region “will take probably even years to remedy” while oil production is expected to recover quicker.

The EU commissioner said that the bloc was preparing for potential fuel supply issues. “We are not there yet, but it can happen, especially on jet fuel,” he said.

The European Commission is expected to present guidelines to airlines later this week.

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The European Union is “prepared for every scenario” after U.S. President Donald Trump threatened to hike levies on cars coming from the bloc, its chief said on Tuesday.

Trump vowed Friday to raise tariffs on EU cars and trucks from 15% to 25%, accusing the bloc of reneging on a trade accord struck last year – a charge European Commission President Ursula von der Leyen rejected.

“A deal is a deal, and we have a deal,” von der Leyen told reporters in Yerevan, adding: “We are both implementing this deal while respecting the different democratic procedures we have on both sides.”

The European Parliament has given conditional approval to the EU-U.S. trade pact, but under the bloc’s procedures, a final version still needs to be negotiated with member states.

“On the European Union side, we are now in the final stages of implementing the remaining tariff commitments,” said von der Leyen, whose commission leads trade policy for the 27-nation EU.

“At the same time, the U.S. has the commitment – for example, where alignment with the agreed ceiling is still outstanding,” von der Leyen noted.

“So we want from this work mutual gain, cooperation and reliability – and we are prepared for every scenario,” she added.

The trade deal last year capped U.S. tariffs at 15% on most European goods, including cars – lower than the 25% Trump imposed on vehicles from many other trading partners.

The EU’s trade chief Maros Sefcovic is to hold talks with his U.S. counterpart, Trade Representative Jamieson Greer, on the margins of a G-7 ministerial meeting in Paris on Tuesday.

Greer told CNBC on Monday that the approval process on the EU side had been “very slow” and had introduced amendments that would “limit the deal.”

“After discussing this with our European colleagues over many, many months, the president decided that if the Europeans aren’t implementing the deal right now, then we don’t have to implement all of it either at this time,” Greer added.

The European Commission has insisted it remains committed to the accord.

“Since day one, we are implementing the joint statement, and we’re fully committed to delivering on our shared commitments,” EU spokesperson Thomas Regnier said Monday.

The EU has warned it is keeping its options open, but Regnier refused to speculate on how the EU would act if the new tariffs kick in.

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Israel is being pushed toward a dangerous debt path as the cost of its multi-front attacks and rising defense demands place heavy pressure on public finances, a report said Tuesday.

Prime Minister Benjamin Netanyahu’s government is struggling to contain defense spending after Oct. 7, 2023, amid a proposed $95 billion defense plan, while ongoing military operations are raising concerns about higher debt and weakened fiscal stability.

That’s according to an analysis by Calcalist, cited by Israeli Ynetnews, the English-language news outlet of the Yedioth Ahronoth media group.

Israel’s economy has been dented by its genocidal war on Gaza and attacks on Iran and Lebanon.

The report said Netanyahu’s classified “Doctrine and Policy Guidelines for 2025-2026,” prepared in late 2025, reshaped the country’s security strategy by instructing the military to prepare for multiple arenas and scenarios.

The document effectively amounted to an open-ended procurement list, with Netanyahu reportedly approving every military demand, according to the analysis.

Defense officials estimated that the broadest interpretation of the policy sought by Netanyahu would cost about 800 billion shekels ($271 billion).

Two alternative plans were later presented to Netanyahu, one costing $152.6 billion and another $84.8 billion.

Following negotiations between the finance and defense ministries, a compromise was reached for $94.5 billion over a span of 10 years, the report said.

Part of the plan, including the purchase of two new air force squadrons, was approved Sunday by the ministerial procurement committee.

‘Dramatic’ implications

The report warned that the economic implications of the plan are “dramatic,” noting that Bank of Israel Governor Amir Yaron has already said the country is on a rising debt path.

With the $118.7 billion plan and efforts to reduce dependence on U.S. aid, Israel’s debt-to-GDP ratio is expected to reach 83% by 2035, according to the report.

The projection is also based on the assumption that the war ends soon, an assumption the report said should be treated with skepticism, given that similar expectations have persisted since early 2024.

It warned that a prolonged conflict would carry far more severe consequences for living standards, including physical and psychological casualties, the cost of reserve duty days, and broader damage to the economy and public finances.

The Finance Ministry and Defense Ministry have also been locked in a budget dispute, with the latter demanding an additional 30 billion shekels for 2026, unrelated to the war, the report said.

The two ministries had agreed in December 2025 on a defense budget of $37.6 billion, plus an additional $1.3 billion to be transferred later, while the defense ministry had sought nearly $48.85 billion.

Following the war, the budget was revisited and another $10.8 billion was allocated for conflict needs, alongside a $2.3 billion reserve still awaiting a decision, according to the report.

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Australia’s central bank hiked interest rates for a third time this year on Tuesday, returning borrowing costs to post-pandemic highs and warning of sticky inflation as ⁠the conflict in the Middle East led to a global oil shock.

Governor ⁠Michele Bullock said the board now judged monetary policy to be slightly restrictive after a burst of rate hikes this year, allowing the board to pause and gauge inflation and growth risks linked to war.

Wrapping up the May policy ​meeting, the Reserve Bank of Australia (RBA) raised its main cash rate by 25 basis points to ​4.35%, undoing ⁠all of the three rate cuts made in 2025. The board voted 8-1 in favor of the hike, a hawkish shift from March’s narrow 5-4 split.

Bullock said there were early signs that firms were looking to pass through rising costs to customers, and that three rate hikes should help keep inflation expectations anchored.

“We feel we are now in a position where we have got space to be alert to both sides of the risks, the inflation and potential risks to the downside, if the war continues,” she said at the post-decision press briefing.

The Australian dollar slipped 0.3% to $0.7145, while three-year government bond yields fell 5 basis points to 4.625%, the lowest in two weeks, as markets scaled back the odds of more near-term rate hikes.

Swaps imply around a 15% chance of a further move in June. An increase to 4.60% by September is about fully priced, which would be the highest since late 2011.

“Higher fuel prices are adding ⁠to ⁠inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly,” the board said in a statement.

“The board assessed that inflation is likely to remain above target for some time and that the risks remain tilted to the upside, including to inflation expectations.”

Yet the RBA also emphasized that having raised the cash rate three times, “monetary policy is well placed to respond to developments,” hinting it might pause for now.

Inflation had already climbed to 4.6% in March, driven by higher fuel costs, while the closely watched core measure remained uncomfortably above the RBA’s 2%-3% target band.

The oil price spike triggered by the U.S.-Israeli war on Iran saw the RBA sharply raise its forecasts for inflation this year, tipping a peak near 5% ⁠while cutting the outlook for economic growth and employment.

Hormuz risk

“Today, the Board showed a clear preference to prioritize the price stability mandate. There is a strong message in this outcome, meaning that risks are biased towards a further adjustment in the cash rate,” said Sally Auld, chief economist at the National Australia Bank.

“For now, we ​have the RBA on hold at 4.35%.”

The RBA charted a softer course than its global peers during the post-pandemic inflation surge, prioritizing ​hard-won gains in the labor market over rapid tightening. Interest rates peaked at 4.35% early last year before three cuts pulled them back to 3.6%.

That gamble backfired in the second half of the year as inflation reignited, a risk now supercharged by ⁠the Iran war ‌and a fresh global ‌energy shock. The U.S. and Iran launched new attacks in the Gulf on Monday, lifting ⁠Brent crude futures to $114 a barrel, up over 50% from pre-conflict levels.

Business and consumer ‌confidence in Australia crashed on fears that the war may tip the economy into a recession, while the housing market has lost steam amid higher borrowing costs and geopolitical ​uncertainty.

The labor market remains the outlier, with ⁠the jobless rate holding at a historic low of 4.3%.

The outlook hinges on the Strait of ⁠Hormuz, a vital route for about 20% of global oil flows, which Iran has effectively closed since the war began in late February.

“By ⁠August – in the absence of ​a rapid resolution to the conflict in the Middle East and a resumption of oil flows – we expect the activity data in Australia to be looking sufficiently soft to keep the RBA on hold,” said Adam Boyton, head of Australian economics at ANZ.

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