Economy
Iraq eyes Türkiye, Syria pipeline to curb Strait of Hormuz reliance
Iraq is speeding up plans for an oil pipeline to Mediterranean ports in Türkiye and Syria as the prolonged blockade of the Strait of Hormuz continues to disrupt exports, according to its Oil Minister Bassim Khudair.
A feasibility study is underway for a pipeline linking the country’s oil-producing regions of Basra in the south and Kirkuk in the north with the Mediterranean ports of Ceyhan in Türkiye and Baniyas in Syria, Khudair told state news agency INA at the weekend.
The route could later be extended to the Jordanian Red Sea port of Aqaba.
Khudair said there was a “clear vision and strategy” in Baghdad on finding new export routes for Iraqi oil.
Iraq is heavily dependent on oil exports, which in normal times account for more than 90% of state revenues. More than 10 million Iraqis rely on monthly government payments, including civil servants, pensioners and welfare recipients.
The search for alternative export routes has become increasingly urgent as the Strait of Hormuz has remained effectively blocked for months due to hostilities between Iran and the U.S. Iraqi oil production has also fallen during the conflict.
However, exporting oil overland would remain more expensive and less efficient than shipping it by sea.
Iraqi officials also acknowledge that pipelines and other energy infrastructure outside the Strait of Hormuz could still be vulnerable to Iranian attacks.
Iraq currently exports some oil through an existing pipeline to Türkiye that runs through the Kurdistan Regional Government (KRG) region. A second pipeline that bypasses KRG is undergoing final testing and could be put into operation within days, Khudair said.
During Iraqi Prime Minister Ali al-Zaidi’s visit to Washington last week, Iraqi and Syrian officials signed a memorandum of understanding to restore a long-idled crude oil pipeline between the two countries.
The pipeline, which has a capacity of 700,000 barrels per day, was damaged during the 2003 U.S.-led invasion of Iraq and has remained out of service ever since. U.S. energy company Chevron is expected to lead the consortium overseeing its restoration.
The Iran war is also disrupting Iraq’s energy sector in the KRG, which has come under attack by Tehran. U.S. energy company HKN Energy and UAE-based Dana Gas have temporarily suspended operations in the region.
U.S. President Donald Trump announced a 50% tariff on a broad range of Canadian imports on Monday, citing alleged trade discrimination against American-made cars, alcohol and dairy products.
The move could unleash a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return to the White House.
The administration official previewing the action said that Canada was one of the few nations, other than China, that retaliated against Trump’s previous tariffs and must be held accountable.
The official insisted on anonymity on a call with reporters to preview the president’s actions and said that Trump signed three proclamations to launch the tariffs under Section 338 of the 1930 Trade Act. Several Democratic lawmakers last year proposed repealing the section because they said Trump could use it to destabilize the economy.
The U.S. Trade Representative’s office said that the tariffs would apply to nearly $20 billion of imports from Canada. That’s about 5.2% of the $382 billion worth of goods that the U.S. imported from Canada in 2025, according to U.S. Census Bureau data.
The new levies would exclude energy products, potash, fish and critical minerals, but they would include goods that had previously been protected from import taxes by the United States-Mexico-Canada Agreement, or USMCA. That 2020 trade pact was not renewed by the U.S., triggering a new set of negotiations that could run until 2036.
The White House said in a fact sheet that the tariffs would go into effect in 30 days, meaning there is time for negotiations, as Trump has not always followed through on his announced tax hikes on imports.
Canadian Prime Minister Mark Carney said in a statement that his government believes in the “benefits of free and fair trade,” having signed “more than 20 new economic and security partnerships.” He said Canada is prepared to negotiate with the Trump administration.
“This trade dispute has raised costs for families, particularly in the U.S.,” Carney said. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens.”
Risk of broader trade war
Still, the tariffs could escalate into a wider trade war as Canada seeks to defend its economy. Ontario Premier Doug Ford saw a possible showdown ahead.
“If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar,” Ford posted on social media.
Candace Laing, CEO of the Canadian Chamber of Commerce, said the Trump administration’s moves were “regrettable” but the two countries need to use the 30-day window before the tariffs start “to make meaningful progress in advancing formal talks.”
Chris Swonger, CEO of the Distilled Spirits Council of the United States, also called for a deal: “We encourage policymakers on both sides of the border to pursue a negotiated solution that restores market access for U.S. spirits and avoids further harm to the U.S. hospitality sector.”
But the use of a Great Depression-era law to impose the tariffs broadens some of the risks, as those tariffs could be applied to other U.S. trading partners, not just Canada, and inject “massive uncertainty” into the global economy, said Scott Lincicome, vice president of general economics at the Cato Institute, a libertarian think tank.
“We crossed the Rubicon,” Lincicome said. “The invocation of 338 is the nuclear option for Trump tariffs.”
Political challenge for Trump
The new tariffs carry serious political and economic risks for Trump ahead of the November midterm elections for control of Congress. His “Liberation Day” tariffs last year in April provoked a financial market meltdown over concerns about inflation and a recession, prompting him to walk back the rates for a period of negotiation.
The Supreme Court ruled this February that Trump had lacked the legal authority to impose the tariffs by declaring an economic emergency, causing the administration to find alternative ways to raise import taxes based on a series of legal authorities.
Tariffs are taxes on imports, which companies can then pass along to consumers in the form of higher prices. The president maintains that the costs created by tariffs will cause manufacturing to relocate to the U.S., though there is little evidence of that in the economic data.
“These new taxes will raise prices on American families and likely lead to retaliation against the very industries Trump purportedly wants to protect,” said Rep. Suzan DelBene, D-Wash., who is chair of the Democratic Congressional Campaign Committee.
The latest import taxes could worsen Trump’s weak ratings on the economy.
He promised voters when running for the presidency that he would bring prices down, but the annual inflation rate has risen since he became president because the tariffs and the war in Iran are pushing up oil prices.
Trump repeatedly targeted Canada
The Trump administration official said the president had also requested that his aides look into additional tariffs on Canada because its wildfires hurt air quality in the U.S. He had publicly threatened to do so in social media posts.
At the World Cup final on Sunday, Trump watched the game with Carney. The Trump administration official said their time together at the game was not a working visit to discuss trade and tariffs.
Trump claims in the proclamations that Canada discriminates against American autos, alcohol and cheese relative to other nations, but his argument rests in large part on retaliatory actions taken by Canada after the U.S. president imposed tariffs on Canada under the pretext that it should do more to stop fentanyl smuggling.
Trump noted in his auto proclamation that Canada maintained, starting in April 2025, a 25% tariff on the imports of U.S. motor vehicles that did not qualify for preferential treatment under the USMCA.
The White House said that, regarding alcohol, all but two Canadian provinces and territories halted the purchase and retailing of American alcoholic beverages beginning last year, which was also a response to Trump’s tariffs and taunts of making Canada the 51st state.
But Trump has long objected to Canada’s treatment of U.S. cheese, saying in his proclamation that Canada discriminates against the U.S. compared to Europe on dairy products.
Trump and Carney have had a frosty relationship, with Carney, a former central banker, pledging to go “elbows up” for Canada during his election campaign last year.
At the World Economic Forum in Davos, Switzerland, in January, Carney called out Trump – without naming him – by saying that the “most powerful” countries are using the economy to coerce less powerful nations.
Trump responded at the time by saying: “Canada lives because of the United States.”
Yemen’s Iran-aligned Houthis announced Monday they would impose a maritime blockade on Saudi Arabia, further throttling a global energy market already greatly restricted by Iran’s closure of the Strait of Hormuz.
This is why it matters and what it means for the Iran war and the global energy crisis.
How big is risk to global energy markets?
It is not clear how the Houthis would carry out a maritime blockade of Saudi Arabia, its northern neighbor along the Red Sea coast, or whether it would include a return to attacks on shipping.
Yemen sits on the Bab el-Mandeb strait – the southern gateway to the Red Sea – and closing that would open up a new front in the energy crisis and Iran’s overarching conflict with the U.S.
With the Strait of Hormuz already disrupted, the Red Sea has become a critical alternative outlet for Gulf oil and other products. A serious disruption would mean both of the Middle East’s major oil export routes are shut simultaneously.
Iran’s partial blockade of the Strait of Hormuz after Israel and the U.S. attacked it on Feb. 28 disrupted most oil and other exports from the Gulf, raising prices and delivering a global energy shock.
Saudi Arabia responded by diverting more than 70% of its normal daily crude exports to the Red Sea port of Yanbu. Ships from Yanbu bound for Europe go north through the Suez Canal. Those heading to Asia go south through Bab el-Mandeb.
Shipments from Yanbu averaged 4 million barrels per day in recent weeks according to data from Kpler and Signal Ocean, up from around 973,000 bpd a year earlier.
Total petroleum volumes transiting Bab el-Mandeb amounted to 7.4 million bpd in June, or about 7% of global oil output, according to Kpler data, up from 4.2 million bpd last year.
That has provided a lifeline for the energy market, helping to keep down global oil prices. Saudi Arabia is considering an expansion of its crude oil pipeline to the Red Sea coast, Reuters reported last week.
When the Houthis launched attacks on Red Sea shipping in November 2023, Gulf oil exports were flowing freely.
Are Houthis closing Red Sea energy routes on behalf of Iran?
The Houthis have been in a civil war against the Saudi-backed, internationally recognized government for more than a decade and have attacked Gulf neighbors with missiles and drones.
However, a 2022 truce between the country’s warring sides largely held until last week, when Yemen’s internationally recognized government said it had struck Sanaa airport to stop an Iranian plane landing.
The Houthis said Saudi Arabia was responsible and, in response, fired missiles at Abha airport in the kingdom’s mountainous southwest.
A senior Houthi official, politburo member Mohammad al-Farah, then warned in an interview on Iran’s Press TV website that if the situation kept escalating, Bab el-Mandeb would be closed.
The U.S. says Iran has armed, funded and trained the Houthis with help from Hezbollah. The Houthis deny being an Iranian proxy and say they develop their own weapons.
It is not clear how far the group’s stance on Bab el-Mandeb and the Red Sea stems from its own strategic priorities or is being made on Iran’s behalf.
What happened when Houthis attacked Red Sea ships before?
After Israel’s genocidal campaign in Gaza, the Houthis began firing at Israel and on shipping in the Red Sea, saying they were doing so in support of Palestinians.
The attacks severely disrupted global shipping, prompting Maersk, Hapag-Lloyd and other major companies to divert around Africa – a far longer, more expensive route.
Red Sea traffic has not recovered since, with traffic through the Suez Canal down 52% in 2025 versus 2023 levels and at its lowest in at least 50 years, Suez Canal Authority data shows.
A U.S.-led mission to restore free navigation in the Red Sea involved repeated strikes on Houthi targets and a campaign that shot down hundreds of drones and missiles.
But some Houthi attacks continued until last summer, only ending completely with the Gaza cease-fire in October.
Last month, the Houthis said they would ban ships linked to Israel from the Red Sea after Israel renewed military attacks on Iran.
However, that threat was never acted on and shipping groups Maersk and Hapag-Lloyd are resuming some Red Sea routes that they had abandoned during the Houthi attacks last year, Maersk said this month.
What have they done during the latest Iran war?
While Hezbollah and the Iraqi groups joined the war early with rocket and drone fire after the first U.S. and Israeli strikes on Iran, the Houthis had been comparatively quiet.
The group’s leader Abdul Malik al-Houthi said on March 5: “Our fingers are on the trigger at any moment should developments warrant it.”
Iranian commanders have repeatedly warned that the Houthis could join the war. The Houthis launched a few missile and drone attacks on Israel in late March and early April.
Revolutionary Guards Quds Force commander Esmaeil Qaani said on June 1 they could choke off the Red Sea.
That may now have changed with their announcement of the blockade on Monday against Saudi Arabia in retaliation for what they called the kingdom’s siege of its ports and airports, including last week’s strike.
Hungarian authorities announced on Monday they had launched an investigation into a major foreign investment deal with BYD that was brokered by a former foreign minister who last week stepped down from Parliament to accept a top position at the Chinese automaker.
Peter Szijjarto’s announcement last Wednesday that he would take the job at the world’s top electric carmaker prompted accusations of a conflict of interest and criticism over his role in facilitating substantial government subsidies to the company while in office.
Prime Minister Peter Magyar told lawmakers on Monday that Szijjarto, a close ally of former Prime Minister Viktor Orban, had helped BYD while he was in office “with hundreds of billions (of forints) in public money, diplomatic support and state infrastructure.”
“We will examine all the decisions, negotiations and state commitments made by Peter Szijjarto that were related to the BYD Hungary investment,” Magyar said Monday.
He added the investigation would look into all subsidies, tax breaks, permits, environmental exemptions and publicly funded investments given to large multinational firms during Orban’s tenure.
“We will investigate who made these decisions, who prepared them, what professional warnings were ignored, and how much burden they left on Hungarian taxpayers, workers, local communities and the environment,” Magyar said.
Neither Szijjarto nor BYD have responded to Magyar’s allegations of conflict of interest while Szijjarto was in office. The former foreign minister has posed his new job as a “prestigious” opportunity to work for one of the “greatest success stories” in the automotive industry.
While serving in government, Szijjarto was instrumental in securing foreign investments in Hungary from Chinese companies, including his now-employer BYD, which received considerable state subsidies during his tenure.
In 2023, Szijjarto announced that BYD would open its first European factory in Hungary – allowing the conglomerate to skirt European Union import tariffs on Chinese electric vehicles imposed to protect the continent’s domestic auto manufacturing sector.
In 2025, Szijjarto also announced BYD would locate its European headquarters and a research and development center in Budapest and receive 20 billion forints ($63.7 million) in government assistance.
The investments were part of the Orban government’s push to make Hungary a global hub for lithium-ion battery manufacturing, largely by attracting Chinese battery manufacturers, who opened a series of plants across the country.
The moves led local residents, environmentalists and opposition politicians to protest over fears the new industry would exacerbate existing environmental problems, hit the country’s precious water supplies and further undermine its economy to China.
While foreign minister, Szijjarto also maintained close relations with Russia despite its full-scale invasion of Ukraine on Feb. 24, 2022. Breaking with nearly all of his EU counterparts, he frequently traveled to Moscow to negotiate agreements on purchasing Russian oil and gas and to meet with Russian Foreign Minister Sergey Lavrov, whom he referred to as his “friend.”
He was embroiled in controversy during Hungary’s 2026 election campaign when The Washington Post reported that he made regular phone calls to Lavrov during high-level EU meetings with “live reports on what’s been discussed.”
Szijjarto has dismissed the report while acknowledging that he conferred with Lavrov before and after EU foreign minister meetings about their agenda and decisions.
During a government news conference last week, Magyar said that “as far as I know,” an investigation had been launched concerning Szijjarto’s connections to the Russian government.
Diesel- and liquefied petroleum gas-powered cars in Türkiye’s vehicle fleet continue to decline steadily, as hybrid and electric vehicles maintain their rapid growth, the official data showed.
The total number of registered motor vehicles in Türkiye rose 6.7% year-over-year to 34.55 million by the end of June, from 32.37 million a year earlier, according to the data from the Turkish Statistical Institute (TurkStat).
Passenger cars accounted for 51.7% of all registered vehicles, followed by motorcycles at 21.5%, light commercial vehicles at 14.4%, tractors at 6.8%, trucks at 3.1%, minibuses at 1.6%, buses at 0.6% and special-purpose vehicles at 0.3%.
Of the 194,740 vehicles newly registered in June, motorcycles made up 49.4%, while passenger cars accounted for 37.8%.
The transition in Türkiye’s auto market has leaped since 2020.
Gasoline-powered cars increased their share of the passenger car fleet to 31% by the end of last month, up from 24.4% in 2020. Their number rose to 5.55 million from 3.20 million over the period.
Diesel-powered cars remained the largest fuel category by number, increasing to 5.74 million from 5.01 million, but their share of the fleet fell to 32.1% from 38.3%.
LPG-powered cars rose in absolute terms to 5.25 million from 4.81 million, although their share declined to 29.4% from 36.7%.
Hybrid vehicles recorded the fastest growth among conventional powertrains, with registrations climbing to 846,813 by the end of June from just 33,690 in 2020. Their share of the passenger car fleet increased to 4.7% from 0.3%.
Electric vehicle adoption also accelerated. The number of registered battery-powered cars rose to 445,939 by the end of June, compared with only 2,797 in 2020. Their share of the passenger car fleet reached 2.5%, up from 0.1% in 2022.
Overall, Türkiye’s passenger car fleet grew to 17.87 million vehicles by the end of June, compared with 13.10 million in 2020.
As the United States and Israel went to war with Iran at the end of February, analysts predicted the price of crude oil could hit $150 a barrel or even rise as far as $200, with the fifth of global supply that transits the vital Strait of Hormuz suddenly cut off from world markets.
But, Brent crude futures peaked around $126 – comfortably below 2008’s all-time high of $147 – and averaged just $101 a barrel between the start of the conflict on Feb. 28 and June 11 when U.S. President Donald Trump called off strikes on Iran, before briefly retreating to pre-war levels of $70 in early July.
Below are some of the reasons why the oil price hasn’t gone crazy. Yet.
1. Chinese surprise
The biggest surprise was China, the world’s largest oil importer, which had slashed crude imports to the lowest in nearly a decade by June. Fuel exports were curbed, its population started using electric taxis instead of personal cars and its petrochemical sector also reduced volumes.
2. U.S. pumps more
The United States, the world’s largest oil producer, pumped more crude, with production reaching a record 13.93 million barrels per day by April. It also freed crude from its Strategic Petroleum Reserve as part of a record 400 million-barrel release coordinated by the International Energy Agency in March, helping cushion supply disruptions.
3. Trump burns bulls
U.S. President Donald Trump repeatedly wrong-footed oil market bulls by making statements about peace agreements and the resumption of flows through the Strait of Hormuz.
Oil market liquidity has dropped as many traders have become reluctant to make large bullish bets amid the risk of sudden market reversals.
“Everybody is bullish now, but nobody is long,” said Ilia Bouchouev of the Oxford Institute for Energy Studies.
After driving their bullish position in Brent futures to its smallest this year in early July, funds then made their largest addition in six months in the week to July 14, according to data from the ICE exchange on Friday.
However, at around $14.8 billion based on Monday’s prices, this position is still more than 50% below late March’s six-year peak.
The market is suffering from headline fatigue, which reduces the price impact of fresh announcements, said Saxo Bank head of commodity strategy Ole Hansen.
4. Hormuz flows rebound
Saudi Arabia, the biggest Gulf oil exporter, sharply increased shipments from its Red Sea Yanbu port, helping to offset the loss of barrels via the Strait of Hormuz.
Hormuz shipments briefly restarted in June, easing concerns about crude availability, but dropped again in July as the fighting resumed.
5. Amply supply of prompt physical cargoes
Traders say there is an ample supply of physical oil, limiting the price reaction to the latest escalation in the conflict. Crude oil differentials in Europe, such as North Sea Forties, that help set the global dated Brent benchmark have fallen to a discount from a record premium in April.
“There is a lot of prompt crude around for now,” said veteran trader Adi Imsirovic. “It may not last!”
Updating the nearly three-decade-old customs union, joining the “Made in EU” framework, and securing participation in the Single Euro Payments Area (SEPA) would significantly strengthen Türkiye’s economic integration with the European Union, the head of the country’s exporters said Monday.
“If the customs union revision, the work related to ‘Made in EU’ and participation in this payment system (SEPA) are achieved together, we would reach a completely different position from where we are today,” Mustafa Gültepe, chair of the Türkiye Exporters Assembly (TIM), said.
Türkiye and the EU have been holding talks about the EU’s 41-country Single Euro Payments Area, which makes cross-border euro-currency payments cheaper, faster and more secure.
Earlier this month, Ankara said it had sent a letter of intent to join the system.
Gültepe said the move would significantly simplify payments between Turkish companies and European partners.
“Transfers would be carried out as if they were domestic transactions. Large companies may not face major difficulties in this area, but it would provide much greater support for SMEs, both those making and receiving payments,” he told Anadolu Agency (AA).
The EU accounts for around 45%-50% of Türkiye’s exports, with the share exceeding 65% in some sectors.
Lobbying for ‘Made in EU’
Gültepe said exporter groups continue lobbying efforts regarding Türkiye’s inclusion in the EU’s “Made in EU” initiative, while the Trade Ministry is also working on the issue.
He said discussions around the framework, particularly its potential impact on the automotive industry, have not yet been concluded.
“The interim assessment is positive, but we need to remain synchronized with them in the next phase,” he said.
Gültepe warned that EU trade agreements with third countries should not disadvantage Türkiye because of the customs union arrangement.
“Work on ‘Made in EU’ continues, especially through our lobbying efforts. Intensive efforts are underway. We hope to remain included,” he noted.
At the same time, Gültepe reiterated that the customs union “genuinely” needs to be revised.
“The agreements the EU signs with third countries are harming Türkiye,” he said.
For decades, Türkiye and the bloc enjoyed good trade ties and cooperation on migration. However, relations have been strained over multiple issues, including the prolonged process of expansion of the scope of the customs union agreement and maritime issues with Greece and the Greek Cypriot administration.
The deeper 1990s-era trade agreement would be expanded to services, farm goods and public procurement. The current deal only covers a limited range of industrial products.
Business groups have long argued that the deal is outdated and ill-suited for today’s trade environment.
Gültepe highlighted Türkiye’s proximity to Europe, logistics advantages, manufacturing capacity and flexible production structure as key strengths.
“It is a market that demands flexibility, and we have flexibility. It demands quality, and we have quality. Beyond price flexibility, we currently have almost everything Europe is looking for,” he said.
Need for faster export growth
Türkiye’s exports rose 3.6% year-over-year in the first half of 2026 to $136.1 billion, a performance Gültepe described as positive given the impact of geopolitical tensions in the Gulf region and the Russia-Ukraine war.
Türkiye recorded $278 billion in exports over the past 12 months, but Gültepe stressed that annual growth rates of 3%-5% were insufficient.
“Türkiye needs to grow at double-digit rates,” he said, adding that the country’s long-term vision should be to become one of the world’s top 10 exporting nations.
He said achieving that goal would require contributions from all 27 sectors, including services, and called for investments in industries that currently contribute to the country’s current account deficit.
Gültepe said Türkiye’s exporters aim to reach $500 billion in total exports, including services, by 2030, compared with around $400 billion currently.
He said technology-intensive sectors would play a key role in achieving the target, adding that industries with labor costs below 20% of production expenses have greater growth potential as rising costs have weakened Türkiye’s price competitiveness.
Higher costs have made it harder for existing exporters to defend their markets and reduced the number of companies entering export markets for the first time, Gültepe said, adding that the number of first-time exporters has fallen by around half over the past 12-18 months.
He said the most difficult period should be behind the sector and predicted that Türkiye could achieve stronger growth from 2027, with monthly double-digit export increases across industries.
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