Economy
Europe has ‘maybe 6 weeks of jet fuel left’: IEA chief
The head of the International Energy Agency warned on Thursday of possible flight cancellations “soon” if oil supplies remain blocked by the Iran war, as he said Europe has “maybe six weeks or so (of) jet fuel left.”
IEA Executive Director Fatih Birol painted a sobering picture of the global repercussions of what he called “the largest energy crisis we have ever faced,” stemming from the pinch-off of oil, gas and other vital supplies through the Strait of Hormuz.
“In the past there was a group called ‘Dire Straits.’ It’s a dire strait now, and it is going to have major implications for the global economy. And the longer it goes, the worse it will be for the economic growth and inflation around the world,” he told The Associated Press (AP).
The impact will be “higher petrol (gasoline) prices, higher gas prices, high electricity prices,” Birol said.
Economic pain will be felt unevenly, and “the countries who will suffer the most will not be those whose voice are heard a lot. It will be mainly the developing countries. Poorer countries in Asia, in Africa and in Latin America,” said the Turkish economist and energy expert who has led the IEA since 2015.
But without a settlement of the Iran war that permanently reopens the Strait of Hormuz, “Everybody is going to suffer,” he added.
“Some countries may be richer than the others. Some countries may have more energy than the others, but no country, no country is immune to this crisis,” he said.
Without a reopening of the waterway, some oil products may dry up, he warned.
In Europe, “I can tell you soon we will hear the news that some of the flights from city A to city B might be canceled as a result of lack of jet fuel,” he said.
Birol spoke out against the so-called “toll booth” system that Iran has applied to some ships, letting them travel through the strait for a fee. He said allowing that to become more permanent would run the risk of setting a precedent that could then be applied to other waterways, including the vital Malacca Strait in Asia.
“If we change it once, it may be difficult to get it back,” he said. “It will be difficult to have a toll system here, applied here, but not there.”
“I would like to see that the oil flows unconditionally from the point A to point B,” he said.
Birol said more than 110 oil-laden tankers and more than 15 carriers loaded with liquified natural gas are waiting in the Persian Gulf and could help ease the energy crisis if they could escape through the Strait of Hormuz.
“But it is not enough,” he added.
Even with a peace deal, strikes on energy facilities mean it could be many months before pre-war production levels are restored, he said.
“Over 80 key assets in the region have been damaged. And out of these 80, more than one-third are severely or very severely damaged,” he said.
“It will be extremely optimistic to believe that it will very quick,” Birol said. “It will take gradually, gradually, up to two years to come back where we were before the war.”
The U.S. will impose “the toughest sanctions in history” on Iran, Treasury Secretary Scott Bessent said Thursday, a focus on economic measures he suggested would lessen the need for new major military operations against Tehran.
His statement followed President Donald Trump’s threat a day earlier of “Economic Warfare” and warning of economic consequences against any country that provided “any type of lifeline to Iran.”
Oil prices rose to more than a three-week high on Thursday following those U.S. threats of financial penalties aimed at forcing an end to a nearly six-month-old war that has stranded millions of barrels of Middle Eastern oil.
“I’m not sure why oil has popped up on this,” Bessent told CNBC. “If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” he said, using a term referring to military force.
Iran calls U.S. sanctions ‘economic terrorism’
Thousands have been killed in the conflict, which drew in Gulf nations and shocked markets as Iran flexed its ability to curb shipping through the Strait of Hormuz – a waterway that carried about a fifth of all traded oil before February.
The U.S. and Iran have twice announced cease-fire deals, in April and June, aiming to restore the free flow of shipping through Hormuz on a path toward ending the conflict, but both quickly crumbled.
Before Bessent spoke, Iran’s Foreign Ministry said it condemned U.S. economic and trade sanctions, calling them “economic terrorism” that would target ordinary Iranians and amount to crimes against humanity.
Bessent told CNBC he would share more details and “talk about exactly what we’re going to do” on Iran at a press conference Monday.
“It is a one-two punch. We have the blockade (on Iran), and we are going to have the toughest sanctions in history,” he added, referring to a U.S. naval blockade imposed on Iran in April and paused for a month in mid-June.
“It is going to work in Iran and we are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” he said.
When asked if the United States could target China for doing business with Iran, Bessent said many conversations were best to have in private.
“Keep in mind that the Chinese get 50% (of their) energy from inside from the Gulf. So it would do them a big service to get with the program,” he said.
China buys more than 80% of Iran’s shipped oil, according to 2025 data from analytics firm Kpler, but engaging in further economic warfare with China, a major exporter to the U.S. including vital rare-earth minerals, risks retaliation against Washington.
Iran has faced years of sanctions
In a social media message Wednesday, Trump promised “Economic Warfare and Isolation on an unprecedented scale,” although details were scant.
Iran has weathered near-continuous, punishing economic sanctions for nearly 50 years, since the 1979 Revolution.
“ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences,” Trump wrote.
Iranian Foreign Minister Abbas Araqchi called Trump’s comments an attempt to divert American public opinion from domestic financial problems, including record debt and rising interest rates.
He said Washington’s insistence on policies he described as failed would bring further failures and alienate Iranians.
“America’s economic terrorism threatens the global economy and the national sovereignty of countries around the world,” he said on X.
Trump has yet to achieve the objectives he set out at the start of the war: dismantling Iran’s nuclear program, curbing its ability to attack regional rivals and creating conditions for Iranians to overthrow their rulers.
Trump’s social media threats and announcements do not always get implemented as written. He did not say what specific steps the U.S. would take or name any country, though the warning would appear to extend to U.S. allies that have helped mediate peace talks.
Iran has separately been negotiating an agreement on managing the Strait of Hormuz with Oman and has said several times in recent weeks that an agreement was close.
Trump responded on Monday to those negotiations with a threat, warning he might bomb the Gulf state, a longstanding U.S. security partner, if it “gets in the way.”
Omani Foreign Minister Badr Albusaidi, speaking after meeting his Japanese counterpart, said on Thursday that lasting security in the strait required a permanent peace in the region and rejected further escalation.
Israel’s aviation sector is facing mounting capacity pressures as staffing shortages, labor unrest and the prolonged regional conflict prevent international air travel from returning to normal.
The fragility of the system became particularly evident Thursday when a wildcat strike brought operations at Ben Gurion Airport near Tel Aviv to a standstill for several hours on one of the busiest travel days of the year.
Employees stopped working to protest staffing shortages and heavy workloads, leading to the closure of check-in counters and the suspension of arrival procedures.
Numerous flights were delayed or canceled, leaving thousands of passengers stranded and creating long lines inside the terminals.
The workers’ union denied formally declaring the strike, while airport management blamed the labor action for the disruption.
Following negotiations between union representatives and Israel Airports Authority officials, employees returned to work and flights gradually resumed.
The Airports Authority said “significant efforts” would be made to increase staffing levels to meet operational demands. It cautioned, however, that clearing the backlog caused by the hours-long stoppage would take time.
Netanyahu calls for workers to be fired
The strike prompted a strong response from Prime Minister Benjamin Netanyahu, who called for employees responsible for disrupting airport operations to be dismissed.
“Anyone who obstructs the operations of the airport will be sent home,” Netanyahu said, according to Israeli media.
Transportation Minister Miri Regev also threatened punitive action, saying those who led the disruption would “pay a heavy price.”
The confrontation highlighted growing tensions between the government and airport employees, who say current staffing levels are inadequate to handle the workload generated by the summer travel rush.
Around 2.6 million passengers are expected to pass through Ben Gurion Airport in August. Daily traffic is projected to reach between 90,000 and 95,000 passengers on weekdays and exceed 100,000 on certain days, according to figures cited by Israeli business daily Globes.
The airport has also faced additional operational pressure from U.S. military aircraft. The Airports Authority warned in late July that U.S. Air Force tanker planes stationed at Ben Gurion could contribute to flight delays during the peak summer season.
Foreign airlines slow to return
Israel’s international flight network has yet to fully recover from repeated suspensions prompted by the war Israel started jointly with the U.S. against Iran in late February.
Several major foreign airlines halted Tel Aviv services following the outbreak of the war, leaving Israeli carriers to accommodate a larger share of international demand.
American Airlines, which had planned to resume flights to Israel in January 2027, postponed its return until March. Delta Air Lines and United Airlines are expected to restore their Tel Aviv services in September.
The reduced presence of foreign carriers has limited competition and contributed to persistently high ticket prices, particularly on long-haul routes.
Despite an increase in available seats on the Tel Aviv-New York route, fares remain volatile and vary sharply depending on the airline and travel date.
Israeli travel industry data showed that economy-class round-trip fares for the September holiday period ranged from around $1,460 to more than $3,000, while business-class fares ranged from approximately $5,700 to nearly $10,000.
A Ukrainian man wanted in Germany in connection with the Nord Stream explosions was arrested while working on a Hollywood movie about the gas pipeline attack starring Adrien Brody and Sean Penn, a report said Thursday.
Police in Pula, Croatia, on Wednesday detained Volodymyr Zhuravlov under a European arrest warrant put out by Germany, which is seeking his extradition.
German prosecutors say Zhuravlov is a trained diver and accuse him of helping plant explosives on the Baltic Sea energy link between Russia and Germany that destroyed three of the four pipelines in 2022.
Germany’s Legal Tribune Online reported he was arrested while working on the set for the movie “Snake Island” by U.S. director Doug Liman (“Bourne Identity”), with Brody and three-time Oscar winner Penn.
Zhuravlov worked as an advisor for the film, according to media reports.
The Ukrainian suspect had previously been held in Poland for his alleged role in destroying the pipelines.
But authorities there refused to extradite him and let him go, judging that any such Ukrainian attack would have been a legitimate act of war rather than a crime.
Poland has long opposed the Nord Stream pipelines, viewing them as an attempt by Russia to use its vast energy resources to gain leverage across Europe. Prime Minister Donald Tusk said at the time of Zhuravlov’s extradition hearing that it would not be in Poland’s interest to hand him over.
The Baltic Sea sabotage attack came months after Moscow’s February 2022 full-scale invasion of Ukraine.
German investigators believe the attack was ordered by a Ukrainian state agency with the aim of depriving Russia of future energy revenues to finance its war in Ukraine.
Prosecutors charge Zhuravlov worked closely with Serhii Kuznetsov, another Ukrainian man who was arrested in Italy last year before being extradited to Germany.
Kuznetsov faces charges of causing an explosion, damaging property, disrupting public service and being an “accomplice to war crimes” by attacking civilian objects.
The case is politically awkward for Germany and Ukraine, as Berlin has strongly backed Kyiv in its fight against Russia.
German government officials, when asked about the issue, have pointed to the independence of the judiciary.
Ukrainian President Volodymyr Zelenskyy has said his government knew nothing about any plan to blow up the pipelines.
Shein aims to launch its Hong Kong initial public offering (IPO) Monday and is targeting a listing on Sept. 1, slightly later than previously planned, a report said Thursday.
While Sept. 1 is the target date, the listing could happen a few days later, Reuters said, citing a source.
The online fast-fashion retailer was earlier reported to have been aiming to list on Aug. 28.
The delay, first reported by the South China Morning Post, comes as slower growth and rising costs have dampened investor appetite for Shein.
The retailer was seen just a few years ago as a disruptive challenger to established retailers such as H&M and Zara, thanks to its rapid supply chain and ultra-low prices.
Among cornerstone investors in the IPO is the asset management arm of UBS Group, which would be investing in Shein for the first time, Reuters reported, citing another source with direct knowledge of the matter. A spokesperson for the Swiss bank declined to comment.
Cornerstone investors agree to buy a set amount of shares before an IPO, and sign up to a lockup period of six months.
Shein is targeting a valuation of $26 billion to $27 billion, another source told Reuters, down sharply from the $100 billion valuation it achieved in a private fundraising in 2022.
The company had previously sought an IPO valuation of $30 billion to $40 billion when investor meetings ahead of the IPO first kicked off.
Türkiye’s exports to Africa surged notably to hit some $13.3 billion in the first seven months of the year, led by expanding logistics networks and construction projects, alongside ongoing diplomatic and trade efforts based on the “win-win” principle.
The export volume jumped 12.6% compared with the same period last year, according to data compiled by Anadolu Agency (AA).
Turkish exports to Africa rose 16.3% in July alone, reaching $2.3 billion, the report said.
Osman Aksoy, coordinator and chair of the Foreign Economic Relations Board’s (DEIK) Türkiye-Africa Business Council, said that the export performance has been “the most concrete proof of the solid foundation of the multidimensional economic ties between Türkiye and Africa.”
Looking at countries, Turkish exports to Egypt surged 49.3% to $426.2 million in July and 26.1% to $2.3 billion in January-July.
Exports to South Africa climbed 8.3% in July to $66.9 million and 31.3% over the seven months to $479 million.
At the same time, exports to Nigeria increased 7.5% last month to $60.2 million and 52.1% to $453.2 million in January-July.
Meanwhile, Türkiye’s exports to Libya surged 22.4% to $289 million in July and 2.3% over the seven months to $1.59 billion.
Exports to Tunisia also rose 0.3% to $101 million and 9.9% in January-July to over $720 million.
At the same time, exports to Niger surged 80.5% in July to $255 million and 8% over the seven months, surpassing $302 million.
Exports to Morocco and Algeria, two of Türkiye’s key export markets on the continent, fell 24.8% to $277.5 million and declined 5.8% to $142.5 million in July, respectively.
Exports to Morocco jumped 11.7% to $2.43 billion while falling 18.8% to $1.09 billion in Algeria during the seven months.
“The momentum in the African market is the result of the commercial diplomacy we pursued for many years based on a win-win approach,” Aksoy told AA.
“Turkish Airlines’ flights to over 60 destinations across the continent and the diversification of maritime container routes boosted our export deliveries, while the massive contracting sector projects we have undertaken on the continent with roads, ports, public housing, and airports contributed to the export performance,” he noted.
Aksoy stated that Türkiye’s machinery and equipment, electrical and electronics, automotive, chemicals, iron and steel, textiles, food, and construction materials sectors played prominent roles in this success.
He suggested developing local production, joint investments, strong distributor networks, and flexible financing models to take advantage of the surging exports to Egypt, South Africa, and Nigeria, the continent’s largest markets, especially through opportunities via the African Continental Free Trade Area (AfCFTA).
“The positive diplomatic climate between Türkiye and Egypt, and the existing Free Trade Agreement, are advantages, but selling goods isn’t enough for sustainable success,” he said, urging increased investments through the Turkish Organized Industrial Zone in the Suez Canal region and efforts to reach previously untapped areas of the continent via joint production through Egypt’s Common Market for Eastern and Southern Africa (COMESA) advantages.
“We can establish a lasting presence in South Africa in high-value-added industrial equipment, electronics, and renewable energy solutions, while Nigeria offers immense potential with its population but struggles with currency fluctuations, so we must focus on local currency trade, bartering, and the direct supply of industrial and food-processing machinery to ensure sustainable growth,” he added.
Aksoy stated that Turkish firms could focus on a sector- and project-focused approach specially tailored to each country’s dynamics.
“Libya’s energy, infrastructure, construction, electricity, health care, agriculture, and food industries, Tunisia’s textiles, automotive supply industry, machinery, chemicals, and technology, and Niger and the Sahel region’s energy, agriculture, food security, irrigation, mining and infrastructure sectors present massive potential,” he said.
Germany’s economy, once the engine of European growth, has barely expanded since 2020, raising concerns over the future outlook, mainly due to weakening industrial performance and the automotive sector crisis.
Although Germany emerged from two years of recession in 2025, gross domestic product (GDP) grew 0.2%, too little to offset the preceding downturn.
The GDP rebounded 3.7% in 2021 and 1.4% in 2022 following the 4.1% pandemic contraction in 2020. Output then fell 0.9% in 2023 and 0.5% in 2024.
The economy grew 0.4% quarter-over-quarter in the first three months of 2026 and 0.2% in the second quarter.
Investment declined in April-June, showing the expansion was not broad-based.
The European Commission expects growth of just 0.6% in 2026 and 0.9% in 2027, while the Bundesbank projects 0.5% this year.
Industrial decline at heart of stagnation
Germany’s economic model was built on manufacturing that transformed inexpensive imported energy into high-value vehicles, machinery and chemicals.
That model is under pressure from the loss of cheap Russian pipeline gas, elevated energy and labor costs, weak investment and Chinese competition in world markets.
Industrial production rose only 0.2% month-over-month in June, following years of declining production.
Manufacturing employed 5.29 million people at the end of the first half, down 144,100, or 2.7%, year-over-year.
Employment fell 3.8% in fabricated metal products, 3.7% in basic metals, 3.6% in chemicals and 3.4% in electrical equipment. Mechanical engineering reduced its workforce by 2.7%.
Automotive industry bears brunt of crisis
Germany’s automotive industry provides the clearest evidence of the structural downturn.
Sector employment fell by 42,300, or 5.8%, to 691,500 at the end of the first half, its lowest level since 2005 and the largest decline among major industrial sectors.
Employment among vehicle and engine manufacturers dropped 6.1% to 429,200, while parts and accessories suppliers recorded a 7.6% decline to 219,500.
Revenue at Volkswagen Group was almost unchanged at 158.1 billion euros ($184 billion), while operating profit declined 11.6% to 5.9 billion euros and its margin narrowed to 3.8%.
BMW’s pretax profit fell 29.4% to about 4 billion euros. Net profit declined 28.5% to 2.87 billion euros, and its automotive margin dropped to 3.6% from 6.2%.
Adjusted operating profit at Mercedes-Benz Group fell 10% to 4.07 billion euros, net profit dropped 6% to 2.52 billion euros and industrial free cash flow contracted 30% to about 3 billion euros.
Porsche’s revenue also fell 5.1% to 17.23 billion euros.
Profitability remained below earlier levels amid tariffs, restructuring costs and weak Chinese demand.
The results show the downturn extends beyond suppliers. Flagship automakers are selling fewer vehicles and operating with narrower margins as competition, tariffs and domestic costs erode earnings.
The electric-vehicle transition adds pressure because electric models require fewer mechanical components, threatening suppliers dependent on engines, transmissions and exhaust systems.
Export model loses strength
Germany has traditionally relied on trade surpluses to compensate for weak domestic demand, but that source of growth is becoming less dependable.
Exports fell 0.3% in 2025, their third consecutive annual decline, reflecting weaker foreign demand, U.S. tariffs and Chinese competition.
Exports improved 3.7% year-over-year in the first half of 2026, but imports rose faster at 4.4%.
In June, exports increased 0.9% to 139.3 billion euros, while imports surged 4.4% to 123.9 billion euros, narrowing the monthly trade surplus to 15.4 billion euros.
The commission expects exports to stagnate and the current-account surplus to fall from 4.7% of GDP in 2025 to 3.1% in 2027.
Labor market begins to weaken
Germany’s labor market initially resisted the downturn as companies retained skilled workers and employment grew in public services. That resilience is also fading.
Unemployment rose by 71,000 to 3.007 million in July, taking the rate to 6.4%, according to the Federal Employment Agency. Seasonally adjusted unemployment increased by 6,000.
Employment declined by 23,000 in June and was 225,000 lower than a year earlier. The agency said labor demand remained weak.
Business insolvencies remain elevated
Corporate insolvencies have risen as companies struggle with weak demand, high financing and energy costs, and the withdrawal of pandemic support.
Courts recorded 1,995 business insolvencies in May, 2% fewer than a year earlier. However, insolvencies increased 4.9% to 10,546 in January-May.
Germany registered 24,064 corporate insolvencies in 2025, the highest total since 2014, following increases of more than 20% in both 2023 and 2024.
Germany plans higher infrastructure and defense spending, but bureaucracy, labor shortages and slow planning could limit the effect.
The country is no longer technically in recession, but marginal growth conceals deeper weaknesses. Industrial employment is falling, automakers face shrinking margins, exports have lost momentum and insolvencies remain elevated.
Economic anxiety spreads among Germans
The economic deterioration is increasingly shaping public sentiment, according to the ARD-DeutschlandTREND survey for July.
More than three-quarters of Germans said they were worried about the country’s economic competitiveness, with concern greater than last autumn.
Almost one in four employed respondents feared losing their job, while more than half of workers worried they could face financial difficulties in retirement.
The economic concerns have also weighed on the government.
Only 13% of eligible voters said they were satisfied with its performance, while Chancellor Friedrich Merz’s approval fell to 13%, according to the representative survey commissioned by ARD, and public confidence continues to deteriorate further.
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