LONDON — Emergency support to help Brits grappling with rising bills should go to “those who need it most,” Chancellor Rachel Reeves said Tuesday — all-but ruling out a Liz Truss-style universal bailout in response to the Iran war. Pledging to “learn the mistakes of the past,” Reeves told MPs Tuesday that, while “contingency planning” is underway for “every eventuality,” the government will be “responsible” with public finances in any new state intervention. Oil and gas prices have soared since the conflict began, leading to higher fuel prices in the U.K. and sparking fears of a sharp increase in family and business energy bills when a regulated price cap period ends in July. Reeves said that, while the full impact of the crisis is not yet known, “the challenges may be significant.” In response to the 2022 energy crisis sparked by Russia’s invasion of Ukraine, the government of then-Prime Minister Liz Truss subsidized the bill of every household in the country — a policy backed by the Labour Party at the time. But Reeves today criticized the “unfunded, untargeted” 2022 package, saying it had pushed up borrowing, interest rates and inflation. Between 2022 and 2024, households in the top income decile received an average £1,350 of direct energy bill support, Reeves said, contributing to national debt “still being paid today.” However, the chancellor stopped short of explicitly ruling out a similar approach. She said: “Contingency planning is taking place for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our ironclad fiscal rules to keep inflation and interest rates as low as possible.” The government has already announced a £53 million package of support for households that use heating oil, which are not protected by the energy price cap. The majority of households that use gas and electricity will not see prices rise until July, when the next price cap period ends. The latest expert projections suggest the average annual bill could rise by more than £200 from current levels. On fuel pricing, Reeves said the government would give an update “within the next month,” amid pressure from opposition parties to extend a longstanding five pence tax relief on gasoline and diesel — the fuel duty cut — beyond its expiry date in September. U.K. gasoline prices have have risen by nearly 16 pence per liter since the war began, while diesel has risen by more than 31 pence.

LONDON — Countries focused on reopening the Strait of Hormuz will meet for a security summit in the near future, which the U.K. has offered to host. More than 30 nations including United Arab Emirates, the U.K., France, Germany, Italy and the Netherlands have now signed a joint statement agreeing to work on “appropriate efforts” to safeguard the major trade route. A British official, granted anonymity because they are not authorized to speak on the record, said Tuesday the U.K. wanted to help “build this coalition and develop momentum” in order to “open a route safe through the Strait of Hormuz, and provide that reassurance to merchant shipping.” They added that cooperation between like-minded partners would include a security conference on the topic, which could be hosted in London or Portsmouth, the home of the Royal Navy on the south coast of England. NATO chief Mark Rutte and British PM Keir Starmer now appear to be leading the push to restart traffic through the Strait, despite skepticism from other allies. The same British official discussed options for securing the channel, such as deploying autonomous minehunting systems from a mothership in the Gulf, while conceding this would not be possible while the current level of hostilities continue. They expressed confidence that “we will see different nations coming forwards with different offers to support us”and “we will be able to find in the right conditions a coalition that will be able to provide that assurance to the merchant shipping industry.”

LONDON — Keir Starmer’s keeping Britain out of the war in Iran — but he can’t duck the conflict’s grave economic consequences. In a sign of growing fears about the impact of the war on Britain, the prime minister chaired a rare meeting of the government’s emergency COBRA committee Monday night, joined by senior ministers and Governor of the Bank of England Andrew Bailey. Starmer’s top finance minister, Rachel Reeves, will update the House of Commons on the economic picture Tuesday, as an already-unpopular administration worries that chaos in the Middle East is shredding plans to lower the cost of living and get the British economy growing. For Starmer’s government — headed for potentially brutal local elections in May — the crisis in the Gulf risks a nightmare combination of a rise in energy prices, interest rates, inflation and the cost of government borrowing that threatens to undermine everything he’s done since winning office. Economists are now warning that even if Donald Trump’s promise of a “complete and total resolution of hostilities” with Iran were to bear fruit, the effects on the British economy could still last for months. Already there are signs of a split within Starmer’s party over how to respond. Labour MPs want the government to think seriously about action to protect households — but Starmer and Reeves have long talked up the need for fiscal responsibility, and economics are warning that there’s little room for maneuver. Fuel prices displayed at a Shell garage in Southam, Warwickshire on March 23, 2026. | Jacob King/PA Images via Getty Images Jim O’Neill, a former Treasury minister who served as an adviser to Reeves, told POLITICO the government should “not get sucked into reacting to every external shock” and “concentrate on boosting our underlying growth trend.” WHY THE UK IS SO HARD HIT Just before the outbreak of war, there was reason for Starmer and Reeves to feel quietly optimistic about the long-stagnant British economy. The Bank of England had expected inflation to fall back sustainably toward its two percent target for the first time in five years, giving the central bank the space to carry on cutting interest rates.  With the Iran war in full flow, it was forced to rewrite those forecasts at the Monetary Policy Committee’s meeting last week — and now sees inflation at around 3.5 percent by the summer. The U.K. is a big net importer of energy and also needs constant imports of foreign capital to fund its budget and current account deficits. That’s made it one of first targets in the financial markets’ crosshairs. The government’s cost of borrowing has risen by more than half a percentage point over the last month. That threatens both the real economy and Reeves’ painstakingly-negotiated budget arithmetic. Higher inflation means higher interest rates and a higher bill for servicing the government’s debt: fiscal watchdog the Office for Budget Responsibility estimates a one-point increase in inflation would add £7.3 billion to debt servicing costs in 2026-2027 alone. The effect on businesses and home owners is also likely to be chilling. Britain’s banks are already repricing their most popular mortgages, which are tied to the two-year gilt rate. Hundreds of mortgage products were pulled in a hurry after the MPC meeting last week, something that will hit the housing market and depress Reeves’ intake from both stamp duty and capital gains. Duncan Weldon, an economist and author, said: “Even if this were to stop tomorrow, the inflation numbers and growth numbers are going to look materially worse throughout 2026. “If this continues for longer… it’s an awful lot more challenging and you end up with a much tougher budget this autumn than the government would have been hoping to unveil.” DECISION TIME The U.K.’s economic plight presents an acute political headache for Starmer, as he faces a mismatch between his own party’s expectations about the government’s ability to help people and his own scarce resources. Energy Secretary Ed Miliband has promised to keep looking at different options for some form of assistance to bill-payers hit by an energy price shock. A pain point is looming in July, when a regulated cap on energy costs is due to expire and bills could jump significantly. One left-leaning Labour MP, granted anonymity to speak frankly, said: “They [ministers] need to be treating this like a financial crisis. They need plans for multiple scenarios with clear triggers for government support.” A second MP from the 2024 intake said “it’s right that a Labour government steps in, particularly to help the most vulnerable.” Foreign Secretary Yvette Cooper and Chancellor of the Exchequer Rachel Reeves at the first cabinet meeting of the new year at No. 10 Downing St. on Jan. 6, 2026 in London, England. | Pool photo by Richard Pohle via Getty Images This demand for action is being felt in the upper echelons of the party too, as Culture Secretary Lisa Nandy recently argued Reeves’ fiscal rules — seen as crucial in the Treasury to reassure the markets — may need to be reconsidered if prices continue to rise and a major support package is needed.  One Labour official said there are clear disagreements with Labour over how to go about drawing up help and warned “the fiscal approach is going to be a massive dividing line at any leadership election.” The same official pointed to recent comments by former Starmer deputy — and likely leadership contender — Angela Rayner about the OBR, with Rayner accusing the watchdog of ignoring the “social benefit” of government spending. Despite the pressure, ministers have so far restricted themselves to criticizing petrol retailers for alleged profiteering, and have been flirting with new powers for markets watchdog the Competition and Markets Authority. The government said Reeves would on Tuesday set out steps to “help protect working people from unfair price rises,” including a new “anti-profiteering framework” to “root out price gouging.” But Starmer signaled strongly in an appearance before a Commons committee Monday evening that he was not about to unveil any wide-ranging bailout package, telling MPs he was “acutely aware” of what it had cost when then-Prime Minister Liz Truss launched her own universal energy price guarantee in 2022.  O’Neill backed this approach, saying: “I don’t think they should do much… They can’t afford it anyhow. The nation can’t keep shielding people from external shocks.” Weldon predicted, however, that as the May elections approach and the energy cap deadline draws nearer, the pressure will prove too much and ministers could be forced to step in. The furlough scheme rolled out during the pandemic to project jobs and Truss’s 2022 intervention helped create “the expectation that the government should be helping households,” he said. “But it’s incredibly difficult. Britain’s growth has been blown off-course an awful lot in the last 15 years by these sorts of shocks.” Geoffrey Smith, Dan Bloom, Andrew McDonald and Sam Francis contributed to this report.

HOUSTON — The Trump administration reached a nearly $1 billion agreement with French energy giant TotalEnergies on Monday to cancel its offshore wind leases off the coasts of New York and North Carolina. The announcement marks the latest blow by the Trump administration against the U.S. offshore wind industry, particularly in the Northeast, after it faced a series of recent legal losses. “The era of taxpayers subsidizing unreliable, unaffordable and unsecured energy is officially over,” Interior Secretary Doug Burgum told reporters at the CERAWeek by S&P Global conference in Houston. As part of the agreement, the Interior Department would terminate the leases for TotalEnergies’ Attentive Energy and Carolina Long Bay projects, worth $928 million, the department said. The lease sales occurred during the Biden administration. TotalEnergies committed to invest the value of those leases into oil and natural gas production in the United States, after which the United States will reimburse the company dollar-for-dollar for the amount they paid for the offshore wind leases, the department said. The company is poised to redirect the funds toward the Rio Grande LNG plant in Texas and the development of upstream conventional oil in the Gulf of Mexico and of shale gas production, according to the Interior Department. Burgum and TotalEnergies signed the agreements Monday from the conference. President Donald Trump has often attacked the U.S. offshore wind sector as unreliable and expensive. He’s repeatedly said he plans to have “no windmills built in the United States” under his tenure. Still, the settlement would suggest a new tack by the administration to target the sector. The Trump administration previously issued stop-work orders for offshore wind projects currently under construction on the East Coast, but judges lifted all five orders earlier this year. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees,” TotalEnergies Chair and CEO Patrick Pouyanné said in a statement. Pouyanné previously said the company would halt development of the Attentive Energy project, off the New Jersey and New York coasts, following Trump’s return to the White House. Both the Attentive Energy and Carolina Long Bay projects were in the early stages of development. Pouyanné told reporters that the company continues to invest in solar, onshore wind and batteries. The deal is a major blow for New York’s offshore wind targets, although proposed projects in the lease area controlled by TotalEnergies and its partners never secured final contracts with the state. New York Gov. Kathy Hochul (D) called the prospect of a deal “not helpful” last week. Attentive Energy dropped out of a bidding process for deals with New York in October 2024, even before Trump’s election. The state concluded that process last month with no awards amid the federal uncertainty and officials have struggled to determine next steps for the industry writ large. Hochul has pivoted to an “all of the above” energy strategy in the face of Trump’s opposition to offshore wind — including nuclear and fossil fuels. Further delays to the development of the technology off New York’s coast will likely further the state’s reliance on repowering fossil fuel plants to serve the New York City region. The deal also leaves New Jersey without any workable offshore wind projects at a time when Democratic Gov. Mikie Sherrill is already searching for more clean energy to combat a regional power crunch. The project was supposed to provide more than 1,300 megawatts of power. Sherrill’s predecessor, Phil Murphy, had lofty ambitions for the industry that were all for naught. His administration approved a series of offshore wind projects that all ran into financial or permitting challenges. The state approved Attentive Energy’s project in early 2024 as part of an attempted reset of the industry, which was already facing woe. The new affront could also prove problematic to permitting reform discussions on the Hill, as Democratic lawmakers have linked progress on those negotiations to whether or not the administration continues its attacks on renewable energy. ClearView Energy Partners said in a note last week the deal could also “re-raise concerns about the durability of federal approvals and therefore further erode, but not eliminate, the thin opportunity for bipartisan permitting reform on Capitol Hill.” So far, Senate Environment and Public Works ranking member Sheldon Whitehouse (D-R.I.) is staying the course on permitting talks, despite reports of the settlement agreement last week — a development he derided as “just more selling out the public for the fossil fuel industry.” His office did not immediately provide further comment Monday. Some Moderate New York Republicans last week also criticized the reported settlement. Marie French and Ry Rivard contributed to this report.

HOUSTON — Oil companies and the world’s largest energy consumers face a significant challenge to rebuild global petroleum supply chains and inventories once the critical Strait of Hormuz bottleneck opens, Chevron CEO Mike Wirth said Monday. “We’ve got a lot of oil and gas now that is not flowing into the market,” Wirth said at the CERAWeek by S&P Global conference in Houston. “Physical supply chains don’t respond immediately, so even if the strait opens at some point, it will take time to rebuild inventories of the right grades of crude and the right types of fuel.” Wirth cautioned that Iran’s attacks on oil tankers and the broader damage of the Middle East war did greater damage to oil and gas markets than the Russia-Ukraine war. Asian nations are running low on diesel and jet fuel. The war has held up deliveries of LNG, fertilizer and other products. Part of the challenge, Wirth said, will be taking a read of the damage. It’s unclear how much production has been shut in, Wirth said, and how badly some facilities were damaged. At the same event, Energy Secretary Chris Wright reiterated to oil executives that he anticipated the global disruption to oil and gas flows would be “short-term,” but he encouraged companies to ramp up production. “Markets do what markets do,” Wright said. “Prices went up to send signals to everyone that can produce more: ‘Please, produce more.’”

President Donald Trump said Monday the United States would pause “any and all military strikes against Iranian power plants and energy infrastructure” for five days as Tehran and Washington engage in diplomatic negotiations. In a social media post, Trump wrote that the U.S. and Iran have had “very good and productive conversations” in the past two days and that the pause on strikes against energy infrastructure came as a direct result of the “in depth, detailed, and constructive conversations.” Trump added that the talks “will continue throughout the week.” The move indicates that a diplomatic off-ramp to the conflict between the U.S. and Iran could be in reach. It also followed increasing unease from the U.S.’s allies in the Middle East and Europe over the conflict continuing to spiral. Ferdinand Knapp contributed to this report. This is a breaking news story that will be updated.

Iranian missiles late Saturday hit two southern Israeli towns close to a nuclear facility in what Tehran said was retaliation for Israeli strikes on Iran’s nuclear site at Natanz. More than 160 people were injured in the strikes, which hit the towns of Dimona and Arad near Israel’s Negev Nuclear Research Center, according to the Israeli health ministry. The attack came as U.S. President Donald Trump warned that the United States will “obliterate” energy plants in Iran if the government in Tehran doesn’t fully open the Strait of Hormuz, giving the country a 48-hour deadline to comply. Tehran warned in reply that any strike on its energy facilities would prompt retaliatory attacks on U.S. and Israeli energy and infrastructure facilities. Iranian state TV said Saturday’s strikes by Tehran were a response to an attack on Iran’s Natanz nuclear facility earlier in the day, according to the BBC. Mohammad Bagher Ghalibaf, speaker of Iran’s parliament, said the fact that ballistic missiles evaded Israeli defenses and struck near the nuclear research site appears to signal “a new phase” in the war. “If Israel is unable to intercept missiles in the heavily protected Dimona area, it is, operationally, a sign of entering a new phase of the conflict,” he posted on social media network X. “Israel’s skies are defenseless.” He added that the “time has come to implement the next pre-planned schemes,” without providing further details. Israeli military spokesman Effie Defrin said the strikes did not represent a new threat. “The air defense systems operated but did not intercept the missile. We will investigate the incident and learn from it,” he wrote on X. Israeli Prime Minister Benjamin Netanyahu said it had been a “very difficult evening,” and vowed to “continue to strike our enemies on all fronts.” The International Atomic Energy Agency said it was aware of the strikes near the nuclear research center and has not received any indication of damage to the facility, nor any information from regional states indicating that abnormal radiation levels have been detected.

U.S. President Donald Trump warned late Saturday that the United States will “obliterate” energy plants in Iran if the government doesn’t fully open the Strait of Hormuz, giving the country a 48-hour deadline to comply. “If Iran doesn’t fully open, without threat, the Strait of Hormuz, within 48 hours from this exact point in time, the United States of America will hit and obliterate their various power plants, starting with the biggest one first,” Trump said in a post on Trust Social. Iran warned in reply that any strike on its energy facilities would prompt attacks on U.S. and Israeli energy and infrastructure facilities — specifically information technology and desalination operations — in the region, the Associated Press reported, citing a statement by an Iranian military spokesperson carried by state media and semiofficial outlets. The warnings of escalation in the Mideast conflict come after the British government on Saturday confirmed that Tehran launched an unsuccessful attack on Diego Garcia, a joint U.S.-U.K. military base in the Indian Ocean. Media reports said Iran fired two ballistic missiles at the base but missed. Meanwhile, Israel claimed that Iran has missiles with a range of about 4,000 kilometers, capable of hitting London, Paris and Berlin. “The Iranian terrorist regime poses a global threat. Now, with missiles that can reach London, Paris or Berlin,” the Israel Defense Forces said in a post on X. Iran’s targeting of the base on Diego Garcia occurred before Britain on Friday confirmed that U.S. use of its bases includes defensive operations against “missile sites and capabilities being used to attack ships in the Strait of Hormuz,” a permission that includes the Indian Ocean island.

European countries are being advised to lower gas storage filling targets and to start refilling gas stores early, as the conflict in Middle East drives up global energy prices. European Energy Commissioner Dan Jørgensen urged in a letter to national energy ministers, seen by POLITICO, that countries should be flexible in how they refill gas stores, to “help reduce the gas demand at times where the supply is tense and ease the pressure on gas prices in Europe.” Since the U.S. and Israel launched strikes on Tehran in late February, the ensuing conflict has caused global energy prices to spike, driven in part by Israeli strikes on Iran’s vast offshore gas field and Tehran’s effective closure of the Strait of Hormuz, a critical passage that facilitates a significant share of the world’s oil and natural gas trade. In the letter, Jørgensen asked EU countries to lower their gas storage refilling targets to 80 percent, 10 percentage points below normal targets. He also suggested that countries could start storage injections early to avoid an “end-of-summer rush to refill storages,” which would put upward pressure on prices. He also suggested that governments extend the deadline to meet filling targets to as late as December, two months later than usual. He said countries can take these measures under the EU Gas Storage Regulation, which provides for flexibility in difficult market conditions. The EU requires member countries to maintain gas reserves at 90 percent of capacity by the winter — a measure brought in after Russia’s 2022 invasion of Ukraine. But this year’s colder-than-average winter depleted those reserves to an average of under 30 percent as of March, the lowest since 2022. Anxiety has been growing in Brussels over whether the conflict in Iran, coupled with already low gas reserves, could spark a fight among countries over dwindling global energy supplies. Jørgensen said that the EU’s gas supplies remain “relatively protected” since the bloc only has “limited reliance” on gas imports from the region. But as a “net importer” of gas globally, “high and volatile global prices may also impact the EU gas storage injections,” he said. As developments in Iran and the wider region are “are significantly impacting global oil and gas markets,” there are indications that it could take longer for Qatari gas production to return to pre-crisis levels, Jørgensen said. The commissioner said he would support countries to make use of the allowed flexibilities, which should be discussed with the European Commission and other member states before being implemented. A Commission spokesperson confirmed that the letter was sent to energy ministers.

Israel and Iran launched fresh attacks on each other on Saturday, the latest in a string of attacks since the U.S. and Israel launched strikes on Tehran in late February.  The U.S., meanwhile, was sending thousands more Marines to the Middle East, according to media reports, even as U.S. President Donald Trump broached “winding down” American military operations in the regioin.  Israel’s military said Saturday’s attacks targeted “the Iranian terrorist regime” in Tehran, as well as “Hezbollah targets” in Beruit. Israel also said that it identified missiles fired from Iran at Israeli territory.  Tehran also fired two ballistic missiles at Diego Garcia, a joint U.S.-U.K. military base in the middle of the Indian Ocean, but did not hit the base, according to a report by the Wall Street Journal. The British government condemned “Iran’s reckless strikes” and confirmed London’s agreement for Washington to use U.K. bases in attacks against Iranian “missile sites and capabilities being used to attack ships in the Strait of Hormuz.” The U.K. “is working closely with international partners to develop a viable plan to safeguard international shipping in the Strait of Hormuz,” it said in a statement.  Defense ministries in Saudi Arabia and United Arab Emirates said on Saturday that they were responding to incoming missile and drone threats, as the conflict continues to spill over into Persian Gulf states. Trump said in a Truth Social post late Friday that Washington is “getting very close to meeting our objectives as we consider winding down” the U.S. military campaign against Iran. He listed the objectives being met as “completely degrading” Iran’s missile capability, “destroying” the country’s defense industrial base, “eliminating” Iran’s navy and air force, keeping the country far away from nuclear capability, and protecting U.S. allies in the Middle East. Trump’s statement is at odds with the reports that the U.S. is sending more troops and warships to the region, and has requested another $200 billion from Congress to fund the war. The conflict has caused global oil prices to spike, driven in part by Israeli strikes on Iran’s vast offshore gas field and Iran’s closure of the Strait of Hormuz, a critical trade passage that facilitates a significant share of the world’s oil and natural gas trade. The U.S. said on Friday that it would temporarily waive sanctions on Iranian oil to help ease the short term shock to global markets, as Trump called NATO allies “cowards” for refusing to join the U.S.-Israeli war with Iran and help reopen the Hormuz channel.