Economy
German exporters turn to Syria, Türkiye land routes amid Hormuz crisis
German exporters seeking to reach Gulf markets are looking beyond the sea routes they have relied on for decades, and are evaluating options such as transport via Türkiye and Syria, as disruptions from the war between the U.S., Israel and Iran continue to drive up freight and insurance costs.
Hans-Ulrich Dicke, a project manager at logistics company Derda, said the latest developments have spurred interest in transporting goods through Syria.
“Iran war is, of course, hampering all business with the Middle East. The container ships cannot cross the Strait of Hormuz anymore, so we’re seeking alternative solutions on a daily basis,” he told Anadolu Agency (AA).
When the conflict started, Dicke said, logistics companies pivoted to the Port of Fujairah on the eastern coast of the United Arab Emirates (UAE) as an alternative to avoid the Strait of Hormuz. However, he noted that Fujairah is getting more and more congested.
We then tried the Jeddah option, but it was not viable as it cost four times more, he said.
Air cargo was also not the preferred option for many German exporters, forcing logistics firms to look for emergency solutions, he said.
Now we are looking to move goods through Syria to the Gulf countries, he added.
High-value destination
The Gulf is a high-value destination for German exporters for machinery, auto and chemicals. It also serves as a key hub for reaching customers across the wider Middle East.
German exports to the six Gulf Cooperation Council (GCC) states – the UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain – totaled about 25 billion euros ($29 billion) in 2025.
Disruption in the Strait of Hormuz risks running into billions of euros.
Dicke said the ongoing conflict has hit German companies, particularly those exporting nondurable goods such as medicine supplies and food and beverages.
It has also made pre-planning difficult for firms producing machinery or similar products.
“So the longer this blockade takes, the more dangerous it gets because the companies invest and they cannot sell the goods in the end. And this, of course, is a huge problem,” he said.
“If this war keeps on for a longer time, this will have a catastrophic influence on all of us,” he warned.
Alternative route via Türkiye, Syria
Okba Shech Ahmad, business development manager at logistics company Roland, said they are receiving a growing number of calls from German exporters seeking alternative routes to the Middle East and Gulf, with many increasingly shifting shipments via Türkiye and Syria.
“More than 50% of companies are directly affected by the current conflict,” he said, adding that they monitor developments in the Iran war and the blockade of the Strait of Hormuz daily.
“We are developing, of course, new, alternative solutions, from Germany to Arab countries, through Syria for example,” he told AA.
The location of Syria is “very strategic,” but without Türkiye it will not work, he said.
Ahmad said they have shifted some of their logistics operations to overland transportation via Türkiye and Syria, then on to Jordan, Saudi Arabia, and other destinations in the region.
Another route they are using combines sea and land freight; from European ports to Türkiye’s Mersin port, and from there onward by land via Syria.
Ahmad said overland transport from Germany to Saudi Arabia takes at least three weeks, while a combined sea-and-land route takes about 35 days.
“Our clients are pleased with these solutions; they want to move forward with these options,” he said.
“It may take longer and be more expensive at the moment, but it’s working. It’s the (only) possible solution right now.”
Türkiye’s military spending increased by 7.2% in 2025, according to a report by a conflict think tank on Monday that also showed global expenditure hit a new all-time high, driven by wars and geopolitical tensions.
Türkiye’s expenditure reached $30 billion to make it the 18th biggest spender in the world, the Stockholm International Peace Research Institute (SIPRI) said.
The figure accounted for 1.9% of Türkiye’s gross domestic product (GDP), and the 2025 growth rate lifted the increase over the past decade to 94%.
The report showed global military spending rose by 2.9% compared with 2024 to nearly $2.9 trillion, marking an 11th consecutive year of growth.
That came despite a 7.5% reduction by the U.S., the world’s biggest spender, as President Donald Trump halted new financial military aid to Ukraine.
The 2025 total brought the growth over the past decade to 41% and took spending as a share of GDP to 2.5% – its highest level since 2009.
The top three military spenders, the U.S., China and Russia, accounted for a combined $1.48 trillion, or 51% of global spending.
The main contributor to higher global spending was a 14% rise in Europe to $864 billion.
In total, 22 European NATO members met the 2% of GDP benchmark. Their combined spending reached $559 billion to rise faster than at any time since 1953, according to SIPRI.
The expenditure of all the 32 NATO members amounted to almost $1.6 trillion in 2025, or 55% of spending globally.
In Türkiye, the overall increase was mainly driven by the country’s continuous investments in its domestic arms industry, SIPRI said.
Allocations to the special fund to support the Turkish arms industry rose by 25% year-over-year and accounted for 22% of Türkiye’s total expenditure in 2025, according to the report.
Türkiye has injected billions of dollars over the past two decades to transform it from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a NATO member.
Türkiye’s defense exports sealed a record 2025, rising about 48% year-over-year to more than $10 billion. The goal for 2028 is to lift the full-year figure to $11 billion, placing Türkiye among the world’s top 10 biggest defense exporters, according to officials.
Despite persistent tensions in the Middle East, military expenditure in the region rose only marginally, by 0.1%, to $218 billion, SIPRI said.
In Asia and Oceania, spending reached $681 billion, an 8.5% increase from 2024, the region’s largest annual increase since 2009.
Total military spending in Africa increased by 8.5% in 2025 to reach $58.2 billion, SIPRI said.
British energy giant Shell announced on Monday it would acquire Canadian firm ARC Resources in a $16.4 billion deal, which would see it boost its access to shale gas and liquids production.
“This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions,” said Shell CEO Wael Sawan in a statement.
The buyout would value ARC at about $13.6 billion, while Shell would also take on some $2.8 billion in net debt, to give a total purchase price of some $16.4 billion.
“We are accessing uniquely positioned assets and welcoming colleagues that bring deep expertise, which, combined with Shell’s strong basin-level performance, provides a compelling proposition for shareholders,” said Sawan.
The boards of both companies had approved the sales, Shell said in a statement, “which is expected to close in the second half of 2026,” subject to final approvals.
ARC’s operations are located in the same region as Shell’s existing Groundbirch asset in western British Columbia and Gold Creek in the neighbouring province of Alberta.
“ARC is combining with a company that has a global portfolio of best-in-class assets,” said ARC president and CEO Terry Anderson.
“I’m excited that ARC’s assets and world-class people will play an important role in helping Shell to further strengthen Canada’s resource landscape whilst also providing the secure energy that the world needs.”
Last year, ARC produced the equivalent of 374,000 barrels per day (bpd).
Beijing on Monday criticized the recently unveiled industrial policy of the European Union aimed to bolster the bloc’s industries against fierce competition from China, vowing countermeasures if it is enacted.
The EU unveiled in March new “Made in Europe” rules for companies trying to access public funds in strategic sectors, including cars, green tech and steel, obliging firms to meet minimum thresholds for EU-made parts.
The proposal, held up for months by wrangling over the measures, is a key part of a European Union drive to regain its competitive edge, reduce its industrial decline and stave off hundreds of thousands of job losses.
Beijing’s Commerce Ministry said on Monday that it had submitted comments to the European Commission on Friday, expressing China’s “serious concerns” regarding the act it called “systemic discrimination.”
“If the EU… presses ahead with the legislation, and thereby harms the interests of Chinese companies, China will have no choice but to take countermeasures to firmly safeguard the legitimate rights and interests of its enterprises,” the ministry warned in a statement.
European businesses in many of the sectors concerned by the proposal have long lamented that they face unfair competition from heavily subsidised Chinese rivals.
The EU proposal, formally known as the “Industrial Accelerator Act” or IAA, implicitly targets Chinese makers of batteries and electric vehicles by requiring foreign firms to partner with European firms and pass on technological know-how when setting up shop in the bloc.
The Chinese Chamber of Commerce to the EU said this month the plan marked a shift towards protectionism that would affect trade cooperation between the EU and China.
Canadian Prime Minister Mark Carney on Monday announced the creation of the country’s first sovereign wealth fund, backed by an initial endowment of CAN$25 billion, aimed at strengthening the economy and reducing long-term reliance on the United States.
The fund will include both public and private investment and will aim to support major projects Carney says are crucial to reducing Canada’s economic reliance on the United States over the coming decades.
“The U.S. has changed. That’s their right and we are responding. That is our imperative,” the prime minister said in Ottawa.
In launching the fund, Carney referenced Norway – which, like Canada, has vast natural resources – but has for several decades used some of its energy revenue to build long-term national wealth and insulate the country from global economic shocks.
Carney said the Canada Strong Fund will direct capital to projects related to energy, critical minerals and infrastructure.
The fund marks his latest effort at deepening Canada’s economic sovereignty as his government heads into tense trade talks with President Donald Trump’s administration.
The existing North American free trade agreement – which has kept more than 85% of U.S.-Canada trade tariff-free since Trump’s return to office – is set to be revised this summer.
The United States has said it wants major changes and Trump’s trade team has escalated its personal insults towards Carney, who has emerged as a leading figure in criticizing Trump’s global leadership.
The deputy U.S. Trade Representative, Rick Switzer, told the Council of Foreign Relations last week that Carney was acting “superior” and was letting his “ego” prevent him from acting in Canada’s best interests.
“I would argue there’s not a grown-up in Canada in charge there. You don’t go out of your way to antagonize the leader of the country that you are absolutely existentially tied to. It’s just political malpractice,” Switzer said.
Carney said last week that some people were overstating Canada’s reliance on the United States and that Washington does not get to dictate the terms of the upcoming trade negotiations.
Military spending around the world reached a new all-time high in 2025 to mark an 11th consecutive year of growth, a report by a conflict think tank showed on Monday, as insecurity and rearmament fueled defense budgets.
Expenditure rose by 2.9% compared with 2024 to nearly $2.9 trillion, despite a reduction by the U.S., the Stockholm International Peace Research Institute (SIPRI) said.
The 2025 total brought the increase over the past decade to 41% and took spending as a share of global gross domestic product (GDP) to 2.5% – its highest level since 2009.
“Given the range of current crises, as well as many states’ long-term military spending targets, this growth will probably continue through 2026 and beyond,” SIPRI said in the report.
The top three military spenders, the U.S., China and Russia, accounted for a combined $1.48 trillion, or 51% of global spending.
The U.S. remained by far the top spender last year despite a 7.5% decline to $954 billion. That was mainly because no new financial military assistance for Ukraine was approved, the report said. In the previous three years, U.S. military funding to Ukraine totaled $127 billion.
“The decline in U.S. military expenditure in 2025 is likely to be short-lived,” SIPRI said.
“Spending approved by the U.S. Congress for 2026 has risen to over $1 trillion, a substantial increase from 2025, and could rise further to $1.5 trillion in 2027,” it said.
Researcher Lorenzo Scarazzato said the decrease from the U.S. was more than offset by increases in Europe and Asia, as the world marked “another year of wars and increased tensions.”
Scarazzato said this was also reflected in the global “military burden,” the share of worldwide GDP devoted to military spending.
“Everything points to a world that feels less secure and is spending on its military to compensate for the global landscape,” he told Agence France-Presse (AFP).
Europe main driver
The main contributor to higher global spending was a 14% rise in Europe to $864 billion.
Concerns over the reliability of the U.S. as a NATO partner contributed to higher budgets, SIPRI expert Diego Lopes da Silva said, as governments sought to bolster security amid a deteriorating international environment.
“That is driven by two major factors. One is the ongoing war in Ukraine, and the other is the decreased U.S. engagement with Europe,” Scarazzato said.
He explained that the U.S. is “pushing for Europe to take more care of its own defense.”
Spending by Russia and Ukraine continued to grow in the fourth year of the war, while increases by European members of the NATO alliance led to the sharpest annual growth in Central and Western Europe since the end of the Cold War.
Germany, the fourth-largest spender, raised expenditure by 24% in 2025 to $114 billion.
For the first time since 1990, German defense outlays exceeded the NATO target of 2% of GDP.
Spain also recorded a 50% jump to $40.2 billion, pushing military spending above 2% of GDP for the first time since 1994.
In total, 22 European NATO members met the benchmark.
Their combined spending reached $559 billion to rise faster than at any time since 1953, said Jade Guiberteau Ricard, researcher with the SIPRI Military Expenditure and Arms Production Program.
The expenditure of the 32 NATO members amounted to almost $1.6 trillion in 2025, or 55% of spending globally.
France’s expenditure rose by 1.5% to $68 billion. Spending by the U.K. decreased by 2% to $89 billion.
Russia and Ukraine each record the highest share of government spending allocated to the military.
Russia’s spending rose 5.9% to $190 billion, equivalent to 7.5% of GDP.
Ukraine, meanwhile, boosted spending by 20% to $84.1 billion – a staggering 40% of GDP.
Türkiye focuses on domestic industry
Türkiye increased its expenditure by 7.2% from 2024 to $30 billion, SIPRI said, making it the 18th biggest spender in the world.
The figure accounted for 1.9% of Türkiye’s GDP, and the growth rate lifted the increase over the past decade to 94%.
The overall increase was mainly driven by the country’s continuous investments in its domestic arms industry.
Allocations to the special fund to support the Turkish arms industry rose by 25% year-over-year and accounted for 22% of Türkiye’s total expenditure in 2025, SIPRI said.
Türkiye has injected billions of dollars over the past two decades to transform it from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a NATO member.
Türkiye’s defense exports sealed a record 2025, rising about 48% year-over-year to more than $10 billion. The goal for 2028 is to lift the full-year figure to $11 billion, placing Türkiye among the world’s top 10 biggest defense exporters, according to officials.
Middle East tensions
Despite persistent tensions in the Middle East, expenditure in the region rose only marginally, by 0.1%, to $218 billion.
While most countries in the region increased spending, Israel and Iran actually recorded declines.
In Iran, it fell 5.6% to $7.4 billion, but this was mostly due to high annual inflation of 42%. In nominal terms, spending actually rose.
Israel’s 4.9% drop to $48.3 billion reflected a reduced intensity in the Gaza war after a January 2025 cease-fire deal, the researchers explained. Israeli spending was still 97% higher than in 2022, they added.
The report showed Saudi Arabia’s expenditure increased by 1.4% to reach $83.2 billion, making it the eighth biggest military spender in the world.
In Asia and Oceania, spending reached $681 billion, an 8.5% increase from 2024, the region’s largest annual increase since 2009.
Scarazzato said the “major player” in the region was China, which has been increasing its spending every year for the past three decades, and spent an estimated $336 billion in 2025.
“But perhaps what’s interesting is the reaction of some other states, such as South Korea, Japan, and Taiwan, reacting to the threat perception,” he said.
Japan raised military expenditure by 9.7%, to $62.2 billion in 2025, equivalent to 1.4% of GDP, its highest share since 1958, while Taiwan increased its spending by 14% to $18.2 billion.
India, the fifth biggest military spender in the world in 2025, increased its military spending by 8.9% to $92.1 billion. Pakistan’s spending increased by 11% to $11.9 billion.
Total military spending in Africa increased by 8.5% in 2025 to reach $58.2 billion, SIPRI said.
Nigeria’s military expenditure grew by 55% to $2.1 billion in 2025, as insurgencies and extremist violence contributed to worsening insecurity.
The upward trend in global military spending is expected to continue in 2026, SIPRI’s da Silva said. He added that there were currently many conflicts worldwide and it was difficult to imagine the situation improving so much within a year that the trend would reverse.
The annual SIPRI report is considered the most comprehensive dataset of its kind. The researchers also include spending on personnel, military aid, as well as military research and development.
Türkiye’s military spending increased by 7.2% in 2025, according to a report by a conflict think-tank on Monday that also showed global expenditure hit a new all-time high, driven by wars and geopolitical tensions.
Türkiye’s expenditure reached $30 billion to make it the 18th biggest spender in the world, the Stockholm International Peace Research Institute (SIPRI) said.
The figure accounted for 1.9% of Türkiye’s gross domestic product (GDP), and the 2025 growth rate lifted the increase over the past decade to 94%.
The report showed global military spending rose by 2.9% compared with 2024 to nearly $2.9 trillion, marking an 11th consecutive year of growth.
That came despite a 7.5% reduction by the U.S., the world’s biggest spender, as President Donald Trump halted new financial military aid to Ukraine.
The 2025 total brought the growth over the past decade to 41% and took spending as a share of GDP to 2.5% – its highest level since 2009.
The top three military spenders, the U.S., China and Russia, accounted for a combined $1.48 trillion, or 51% of global spending.
The main contributor to higher global spending was a 14% rise in Europe to $864 billion.
In total, 22 European NATO members met the 2% of GDP benchmark. Their combined spending reached $559 billion to rise faster than at any time since 1953, according to SIPRI.
The expenditure of all the 32 NATO members amounted to almost $1.6 trillion in 2025, or 55% of spending globally.
In Türkiye, the overall increase was mainly driven by the country’s continuous investments in its domestic arms industry, SIPRI said.
Allocations to the special fund to support the Turkish arms industry rose by 25% year-over-year and accounted for 22% of Türkiye’s total expenditure in 2025, according to the report.
Türkiye has injected billions of dollars over the past two decades to transform it from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a NATO member.
Türkiye’s defense exports sealed a record 2025, rising about 48% year-over-year to more than $10 billion. The goal for 2028 is to lift the full-year figure to $11 billion, placing Türkiye among the world’s top 10 biggest defense exporters, according to officials.
Despite persistent tensions in the Middle East, military expenditure in the region rose only marginally, by 0.1%, to $218 billion, SIPRI said.
In Asia and Oceania, spending reached $681 billion, an 8.5% increase from 2024, the region’s largest annual increase since 2009.
Total military spending in Africa increased by 8.5% in 2025 to reach $58.2 billion, SIPRI said.
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