Türkiye on Tuesday signed a financing agreement with the World Bank worth 1.67 billion euros (about $1.97 billion) for the long-awaited railway project that will cross over the Bosporus.

The deal was signed by Treasury and Finance Minister Mehmet Şimşek in Washington, where he is attending the spring meetings of the International Monetary Fund (IMF) and the World Bank.

Known as the Istanbul North Rail Crossing Project (INRAIL), the investment that is estimated to top $8 billion is expected to create a new high-capacity rail line to strengthen freight and passenger connections between Asia and Europe.

The planned double-track electrified line stretching roughly 126 kilometers (78.29 miles) will link the metropolis’ two airports by crossing over the Yavuz Sultan Selim suspension bridge, one of the longest and widest of its kind in the world. It is also known as the third bridge to span the Bosporus

Speaking at the signing ceremony, Şimşek said global energy security and trade corridors are under strain due to conflicts, fragmentation and years of underinvestment, underscoring the need for coordinated international responses.

He highlighted the importance of the so-called Middle Corridor, describing it as the fastest route between Beijing and London, with a transit time of around 18 days.

Şimşek said infrastructure has been a cornerstone of Türkiye’s development strategy, noting that the country has invested $355 billion in transport infrastructure over the past two decades, including $180 billion in highways and a major expansion of its airport network.

‘Signal of confidence’

The partnership with World Bank “provides financing, strengthens standards and sends a signal of confidence to global markets,” Şimşek said, describing the project as more than a conventional infrastructure investment.

The Istanbul North Rail Crossing Project is designed to address one of the most constrained transit points along the Middle Corridor by offering a high-capacity rail alternative across the Bosporus.

It is expected to significantly boost the corridor’s reliability and strategic importance for global trade, Şimşek noted.

The project is aimed at easing passenger and freight traffic on the Marmaray line while directly connecting Istanbul Airport and Sabiha Gökçen Airport by rail for the first time.

Marmaray is the world’s first underwater rail link between two continents. Opened in 2013, it carries subway commuters and serves freight trains.

‘Transformational leap’

According to Şimşek, the project will increase annual rail freight capacity across the Bosporus from 3 million tons to 50 million tons, marking what he called a “transformational leap” and contributing to the development of carbon-neutral freight infrastructure for intercontinental transport.

With a total estimated cost of $8.1 billion, around 83% of the project’s financing will come from international financial institutions, he added.

“This is the third-largest project ever approved in the entire history of the World Bank. This fact alone demonstrates the scale of our ambition and the confidence our partners have in Türkiye’s capacity to bring the project to fruition,” Şimşek said.

He added that the project is expected to generate more than 400,000 higher-income jobs, emphasizing that infrastructure investments not only facilitate trade but also create livelihoods.

Anna Bjerde, the World Bank’s managing director of operations, said the project would deliver lasting benefits for Türkiye’s transport system and economic growth.

She described its impact as “transformational,” noting that it would relieve one of the country’s most critical transport bottlenecks by increasing rail capacity along the Bosporus.

Bjerde said the project would strengthen connectivity across three strategic corridors, namely the Middle Corridor, the Development Road and the Türkiye-Europe Corridor, making crossings faster, more reliable and more efficient.

“This is significant not only for Türkiye but also for regional and international trade.”

Bjerde said the project is expected to attract around $6.75 billion in international financing.

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Türkiye is continuing efforts to evacuate eight of its vessels from the Strait of Hormuz, Transport and Infrastructure Minister Abdulkadir Uraloğlu said on Wednesday.

Speaking to reporters at Parliament, Uraloğlu said Türkiye had initially had 15 ships in the strategic waterway before it was effectively shut after the U.S. and Israel launched strikes on Iran in late February.

Three of the Turkish-owned ships have already been safely withdrawn, the minister said.

Of the remaining 12 vessels, four are not seeking evacuation as they continue operations in the area, he noted. Two of these are power-generating ships, while the other two are engaged in ship-to-ship cargo transfer activities.

“The remaining eight ships are being handled under the coordination of our Foreign Ministry. We hope to remove them in the coming days,” Uraloğlu said.

The war shut in about 20% of global oil and liquefied natural gas shipments that usually transited through the waterway before the conflict.

Shipping remained constrained despite a two-week cease-fire between the U.S. and Iran. As of Monday, the U.S. has also enacted a blockade of shipping leaving Iranian ports.

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U.S. President Donald Trump has threatened to renege on a trade agreement with the United Kingdom that limits the impact of U.S. tariffs, as he again criticized Britain’s lack of support in the Iran war.

But Trump, who has repeatedly slammed the policies of British Prime Minister Keir Starmer, said strains in the relationship with the U.S. NATO ally would “not at all” negatively affect King Charles III’s state visit to the United States later this month.

“We gave them a good trade deal, better than I had to, which can always be changed,” the president was quoted as saying by Sky News on Wednesday. The comments came in a phone interview with Sky News U.S. reporter Mark Stone.

London and Washington concluded a trade agreement last year capping U.S. tariffs at 10% on most British manufactured goods. In return, the U.K. agreed to open its markets further to American ethanol and beef, sparking domestic concerns.

At the time, the agreement was advantageous for London, which benefited from the lowest tariffs granted by the U.S. That advantage has since weakened after the Supreme Court struck down some U.S. tariffs and Washington retaliated by imposing a temporary 10% tariff on nearly all imports pending a new tariff regime by July.

While Trump praised his relationship with Starmer at the time of the agreement, transatlantic ties have since deteriorated, particularly over the war in the Middle East.

Starmer angered Trump by refusing to allow British bases to be used for the initial U.S. strikes on Iran last month. He later agreed to a U.S. request to use two British military bases for a “specific and limited defensive purpose.”

“It’s a relationship where when we asked them for help, they were not there,” Trump told Sky News. “When we needed them, they were not there. When we didn’t need them, they were not there. They still aren’t there.”

Starmer’s Labour government, which has sought to build bridges with Trump since his return to the White House in January 2025, has recently hardened its rhetoric toward its historic ally.

Treasury chief Rachel Reeves on Tuesday hit out at the “folly” of Trump launching a war with Iran “without a clear exit plan.”

Starmer told Parliament on Monday that Trump was wrong to threaten to destroy Iranian civilization, while Health Minister Wes Streeting on Sunday criticized the president’s language as “incendiary, provocative, outrageous.”

Against this backdrop, Reeves was scheduled to meet with U.S. Treasury Secretary Scott Bessent on Wednesday as part of an International Monetary Fund (IMF) meeting set to detail the economic impact of the conflict.

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The European Union on Wednesday warned member states that a prolonged Iran conflict could trigger a lasting energy supply shock, potentially forcing cuts in fuel consumption, according to a report.

Global energy supplies are reeling ​from the war’s effective closure of the Strait ​of Hormuz, ⁠usually a transit route for 20% of the world’s oil and liquefied natural gas (LNG). Europe has not yet faced supply shortages, but is grappling with soaring oil and gas prices and airports have warned the first jet fuel shortages could hit within weeks.

In a closed-door meeting with EU countries’ ambassadors on Wednesday, the European Commission said it was considering two main scenarios, diplomats with knowledge of the talks told Reuters.

In a scenario where the cease-fire agreed ⁠between ⁠the U.S. and Iran holds, and the U.S. blockade of the strait is lifted, oil and gas flows would recover in a few months and prices should decline, the Commission said.

Diesel and jet fuel prices would ease later, by the end of summer, while the global market for LNG would remain tightened until 2030, due to damage to infrastructure in Qatar, it added.

But if tensions continue, ⁠energy markets would face a prolonged supply shock and extreme price spikes, with ripple effects across industries’ supply chains. Continued oil supply disruption would increasingly force “demand destruction” – meaning reduced fuel ​use, the Commission said.

In this scenario, Europe could struggle to fill ​its gas storage ahead of winter. Localized shortages of jet fuel are also possible, the Commission said, according to the diplomats.

Europe’s ⁠reliance on ‌oil ‌and gas imports has left it exposed to spiralling ⁠global prices – even though its top ‌suppliers are the U.S., Norway and other producers outside the Middle East. The Commission is ​drafting proposals to attempt to ⁠offset the energy fallout.

A draft shows plans to cut electricity taxes and seek to scale ⁠up clean technologies faster, ​to slash Europe’s dependence on fossil fuels and protect the bloc from future oil and gas shocks.

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The Middle East war has hurt the sales of some of the world’s largest luxury groups, while also denting the sales at air hubs in the region, financial data shows.

From Hermes to Gucci and duty-free stores, the impact of conflict is seen on the sheets of the sector, which has already been facing a slower demand in recent quarters.

French luxury group Hermes reported weaker-than-expected first-quarter sales on Wednesday as the Iran war hit spending in the Middle East as well ⁠as in France, with fewer ⁠tourists visiting Paris and buying designer items.

Sales of products including Birkin and Kelly bags, silk scarves and perfume rose by ​5.6% in currency-adjusted terms, but lower than a Visible Alpha ​analyst ⁠consensus of 7.1% growth.

Currency fluctuations took 290 million euros ($342 million) off Hermes’ revenue, leading to a 1% drop in reported sales to 4.07 billion euros, from 4.13 billion euros a year ago.

Hermes, which caters to the ultra-wealthy with handbags starting at $13,000, said weaker tourist flows had hit sales in concession stores at airports and in the Middle East, as well as in France, Britain, Italy and Switzerland, where Gulf shoppers are a key driver.

Investors’ hopes for luxury demand to recover ⁠this ⁠year have been dashed by the Iran war, which has dented Dubai mall sales and sent energy prices soaring, hitting consumer confidence.

Gucci sales also down

Similarly, sales at Kering’s Italian flagship brand Gucci ⁠dropped by 8% in the first quarter from ⁠the previous year, the fashion group said on Tuesday, with the decline also tied to the curtailed shopping due to the conflict in the Middle East and disruptions in international travel.

Gucci’s 1.35 billion euro sales from January to ​March were slightly below analyst forecasts, with the drop marking the 11th ​straight ⁠quarterly decline.

A Visible Alpha analyst consensus for revenues had projected around 1.37 billion euros.

The result, days before Kering CEO Luca de Meo is due to unveil his strategic plan to turn around the group’s fortunes, serves as a reminder of the steep challenge ahead for the storied fashion house and its controlling shareholder, the French Pinault family. Kering called the quarterly outcome a “first step” in its recovery.

Investors are pinning hopes on de Meo’s ability to find a recipe for success amid a jittery market and rapidly shifting trends, though most analysts expect Gucci to only return to growth in the second half of the year.

Still, Kering’s shares are down about 8% this year.

Impact seen at duty-free stores

From DFS ​to Avolta, duty-free stores selling premium perfumes and spirits to big spenders are also feeling the pinch as conflict in the Middle East shuts airports and curbs travel to the ⁠region – a setback likely to become more acute if ⁠the war drags on.

The disruption, now in its sixth week, exposes a vulnerability for luxury and beauty groups that have relied on airport shopping and Gulf hubs – among their highest-margin channels – to offset weaker demand ​in China and Europe, making even short-term airport closure a potential drag on ​quarterly ⁠profit.

Analysts have said a prolonged slump in Middle East air traffic could compound pressure on a travel-retail industry still recovering from the COVID-19 pandemic, squeezing underperforming businesses such as LVMH’s DFS and weighing on prestige beauty and luxury firms including Estee Lauder, Puig and L’Oreal.

International flights to and from the Middle East plummeted in the first half of March. While some airlines in the United Arab Emirates are slowly restarting, flights remain well below normal levels.

Flight cancellations from the Middle East, excluding Türkiye, decreased from their peak of 65% on March 3 to 13% on March 27, according to data from Cirium, but the number of flights scheduled has also fallen.

DFS “is costing two (percentage) points of growth” for its selective retailing division, which includes beauty brand Sephora, LVMH Chief Financial Officer Cecile Cabanis told analysts this week.

The conflict shaved at least 1% off ⁠group ⁠sales in the latest quarter due to lower spending in the Gulf region, LVMH said.

“What we see today is still that demand is very much down,” Cabanis said.

Gulf hubs suffer

Companies that operate in the $74 billion travel-retail industry have been shifting inventories and temporarily closing airport stores in the region. Normalcy for luxury airport shops may take time, analysts said.

Dubai International Airport, whose retail outlets include L’Oreal’s Aesop, Kering’s Gucci and Estee’s Jo Malone, is operating a reduced number of terminals after a drone attack forced the hub to temporarily close.

Kuwait International Airport has been shut due to repeated drone strikes, halting sales for airport outlets owned by Avolta and Boots.

Avolta, which earns ⁠3% of revenue from the Middle East, is moving inventory from locations with slower sales to those with more foot traffic, CFO Yves Gerster told Reuters. Still, partly shuttered airports in some instances were leading to strong sales of food and other items for stranded travelers, for instance, ​at Dubai airport, Gerster said.

Kering CFO Armelle Poulou told Reuters after the company’s first-quarter earnings report that travel retail ​was slightly down compared with last year, and that “performance with local customers has been more resilient than tourism-related demand.”

The conflict shaved 3% off overall Kering sales in March, or 1% for the quarter, with a similar ⁠effect at Gucci ‌in particular, Poulou ‌said.

Investors will keenly watch out for Estee’s quarterly results on May 1, as the ⁠firm explores a $40 billion acquisition of Spanish competitor Puig, which derives ‌a tenth of sales from travel retail. That makes it one of the more exposed beauty companies to swings in airport shopping and international travel, analysts ​said.

L’Oreal, whose travel-retail business in Asia accounted ⁠for less than 4% of the company’s $44 billion in 2025 sales, is scheduled to report ⁠quarterly results on April 22. The company does not provide total travel-retail sales, although analysts said Asia accounts for the ⁠largest share.

Estee Lauder and ​L’Oreal declined to comment to Reuters. Puig was not immediately available for comment.

As global demand for gold surges, a critical constraint is emerging in the background, one that could reshape financial power. The Vice Chairman of Ahlatcı Holding, Ahmet Emin Ahlatcı, warned that the number of refineries capable of meeting sovereign standards is shrinking even as central bank demand accelerates, a report said Tuesday.

The report by Forbes said growing demand for gold is colliding with a shrinking number of facilities able to refine it to the standards required by central banks and sovereign buyers.

Gold prices have risen sharply in recent years, increasing from about $2,039 per ounce in early 2024 to nearly $4,850 by April 2026, driven by geopolitical tensions, inflation concerns and strong central bank demand, the report said.

Ahlatcı said refineries that meet strict compliance and traceability requirements are becoming fewer.

“The number of refineries that can meet sovereign-grade compliance and traceability standards is shrinking, not growing,” he said, adding that central banks are becoming more selective about the gold they accept.

The report said this mismatch between rising demand and limited refining capacity is increasing the importance of refineries and certification institutions in global markets, as they determine whether gold can be accepted into official reserves.

According to the report, the trend is also linked to broader geopolitical developments, including competition between China and the United States.

China has been increasing its gold reserves as part of efforts to reduce reliance on the U.S. dollar, while maintaining its export-driven economic model, the report said.

Gold is being used as a neutral store of value by countries seeking to diversify reserves without shifting fully to another currency, it added.

The report said control over refining capacity could become more significant in the future, as countries expand efforts to secure access to gold and influence how it is processed and traded globally.

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