BRUSSELS — United Nations Secretary-General António Guterres said Thursday there are “reasonable grounds” to believe both sides in the U.S.-Israel conflict with Iran may have committed war crimes, as attacks and retaliatory strikes on energy facilities intensify. Speaking exclusively to POLITICO on a visit to Brussels before Thursday’s European Council summit, Guterres said: “If there are attacks either on Iran or from Iran on energy infrastructure, I think that there are reasonable grounds to think that they might constitute a war crime.”  Israel attacked Iran’s South Pars natural gas field on Wednesday, then Tehran launched a retaliatory strike on a major energy complex in Qatar. Beyond that, Guterres said the growing civilian casualties left both sides in the conflict open to possible war crimes charges. “I don’t see any difference. It doesn’t matter who targets civilians. It is totally unacceptable,” he said. Representatives for the U.S. and Israeli governments did not immediately respond to requests for comment on Guterres’ remarks. America and Israel began a bombing campaign on Feb. 28, killing Iran’s supreme leader and sparking ongoing retaliatory missile-and-drone attacks from Tehran on sites across the Middle East. Having called for deescalation in the region, Guterres appeared to blame Israel for driving the conflict forward, and called on U.S. President Donald Trump to persuade Israeli leader Benjamin Netanyahu to bring it to an end. “The war needs to stop … and I believe that it is in the hands of the U.S. to make it stop. It is possible [to end the war], but it depends on the political will to do it,” Guterres told host Anne McElvoy for an episode of the EU Confidential podcast publishing Friday morning. “I am convinced that Israel, as a strategy, wants to achieve a total destruction of the military capacity of Iran and regime change. And I believe Iran has a strategy, which is to resist for as much time as possible and to cause as much harm as possible. So the key to solve the problem is that the U.S. decides to claim that they have done their job. “President Trump will be able to convince … those that need to be convinced that the work is done. That the work can end,” Guterres added. The secretary-general also attributed America’s decision to launch strikes on Iran to Israel. “I have no doubt that this was something that corresponds to Israel’s strategy … to draw the United States into a war. That objective was achieved. But this is creating dramatic suffering in Iran, [and] in the region, even in Israel. And it is creating a devastating impact in the global economy and whose consequences are still too early to foresee. So, we absolutely must end this conflict,” he said. But finding an off-ramp might prove difficult, and relations between the U.N. and the Trump administration remain frosty.   Asked if he had spoken with Trump since the conflict began three weeks ago, Guterres responded emphatically: “No, no, no … I speak with those I need to speak to. But this is not a soap opera.” He claimed, however, to have been “in contact with all sides,” including with the Trump administration, since hostilities spread across the Gulf.  “It’s vital for the world at large that this war ends quickly,” Guterres said. “This is indeed spiraling out of control and the recent attacks represent an escalation that is extremely dangerous.” Trump said on his Truth Social site that the U.S. had not authorized the attack by Israel on the South Pars site, and that Israel had “violently lashed out,” raising questions about how much influence the U.S. has over its ally. “My hope is that the United States will be able to understand that this has gone too far,” Guterres said. The conflict was primarily benefitting Russia, Guterres added, with Moscow welcoming the distraction from its own war on Ukraine. “Russia is the biggest beneficiary of the Iran crisis,” Guterres said. “Russia is the country that is gaining more with what’s happening in this horrible disaster. Russia is already the winner.” Meanwhile, European leaders, including U.K. Prime Minister Keir Starmer and German Chancellor Friedrich Merz, have said they won’t be sending ships to the Persian Gulf in response to Trump’s appeal for help to open the Strait of Hormuz. France has said it will only contribute support vessels “when the situation is calmer.” Guterres applauded the restraint shown by the Europeans, despite Trump’s anger at their refusal to actively support the war or help reopen the Strait of Hormuz, a critical maritime artery that Iran has largely sealed off, driving up global energy prices. “I think these countries made their own reading of the situation, and I believe they took a decision not to get too much involved, knowing that the most important objective is the deescalation,” he said. Listen to the full episode of EU Confidential on Friday morning.

Dr. Daniel Steiners This is not an obituary for Germany’s economic standing. It is an invitation to shift perspective: away from the language of crisis and toward a clearer view of our opportunities — and toward the confidence that we have more capacity to shape our future than the mood indicators might suggest. For years, Germany seemed to be traveling along a self-evident path of success: growth, prosperity, the title of export champion. But that framework is beginning to fray. Other countries are catching up. Parts of our industrial base appear vulnerable to the pressures of transformation. And global dependencies are turning into strategic vulnerabilities. In short, the German model of success is under strain. Yet a glance at Europe’s economic history suggests that moments like these can also contain enormous potential — if strategic thinking and decisive action come together. One example, which I find particularly striking, takes us back to 1900. At the time, André and Édouard Michelin were producing tires in a relatively small market, when the automobile itself was still a niche product. They could have focused simply on improving their product. Instead, they thought bigger; not in silos, but in systems. With the Michelin Guide, they created incentives and orientation for greater mobility: workshop directories, road maps, and recommendations for hotels and restaurants made travel more predictable and attractive. What began as a service booklet for motorists gradually evolved into an entire ecosystem — and eventually into a globally recognized benchmark for quality. > In times of change, those who recognize connections and are willing to shape > them strategically can transform uncertainty into lasting strength. What makes this example remarkable is that the real innovation did not lie in the tire itself or merely even a clever marketing idea to boost sales. It lay in something more fundamental: connected thinking and ecosystem thinking. The decision to see mobility as a broad space for value creation. It was the courage to break out of silos, to recognize strategic connections, to deepen value chains — and to help define the standards of an emerging market. That is precisely the lesson that remains relevant today, including for policymakers. In times of change, those who recognize connections and are willing to shape them strategically can transform uncertainty into lasting strength. Germany’s industrial health economy is still too often viewed in public debate in narrowly sectoral terms — primarily through the lens of health care provision and costs. Strategically, however, it has long been an industrial ecosystem that spans research, development, manufacturing, digital innovation, exports and highly skilled employment. Just as Michelin helped shape the ecosystem of mobility, Germany can think of health as a comprehensive domain of value creation. The industrial health economy: cost driver or engine of growth? Yes, medicines cost money. In 2024, Germany’s statutory health insurance system spent around €55 billion on pharmaceuticals. But much of that increase reflects medical progress and the need for appropriate care in an aging society with changing disease patterns. Innovative therapies benefit both patients and the health system. They can improve quality and length of life while shifting treatment from hospitals into outpatient care or even into patients’ homes. They raise efficiency in the system, reduce downstream costs and support workforce participation. > In short, the industrial health economy is not merely part of our health care > system. It is a key industry, underpinning economic strength, prosperity and > the financing of our social security systems. Despite public perception, pharmaceutical spending has remained remarkably stable for years, accounting for roughly 12 percent of total expenditures in the statutory health insurance system. That figure also includes generics — medicines that enter the ‘world heritage of pharmacy’ after patent protection expires and remain available at low cost. Truly innovative, patent-protected medicines account for only about seven percent of total spending. Against these costs stands an economic sector in which Germany continues to hold a leading international position. With around 1.1 million employees and value creation exceeding €190 billion, the industrial health economy is among the largest sectors of the German economy. Its high-tech products, bearing the Made in Germany label, are in demand worldwide and contribute significantly to Germany’s export surplus. In short, the industrial health economy is not merely part of our health care system. It is a key industry, underpinning economic strength, prosperity and the financing of our social security systems. Its overall balance is positive. The central question, therefore, is this: how can we unlock its untapped potential? And what would it mean for Germany if we fail to recognize these opportunities while economic and innovative capacity increasingly shifts elsewhere? Global dynamics leave little room for hesitation Governments around the world have long recognized the strategic importance of the industrial health economy — for health care, for economic growth and for national security. China is demonstrating remarkable speed in scaling and implementing biotechnology. The United States, meanwhile, illustrates how determined industrial policy can look in practice. Regulatory authorities are being modernized, approval procedures accelerated and bureaucratic barriers systematically reduced. At the same time, domestic production is being strategically strengthened. Speed and market size act as magnets for capital — especially in a sector where research is extraordinarily capital-intensive and requires long-term planning security. When innovation-friendly conditions and economic recognition of innovation meet a large, well-funded market, global shifts follow. Today roughly 50 percent of the global pharmaceutical market is located in the United States, about 23 percent in Europe — and only 4 to 5 percent in Germany. This distribution is no coincidence; it reflects differences in economic and regulatory environments. At the same time, political pressure is growing on countries that benefit from the American innovation engine without offering an equally attractive home market or recognizing the value of innovation in comparable ways. Discussions around a Most Favored Nation approach or other trade policy instruments are moving in precisely that direction — and they affect Europe and Germany directly. For Germany, the implications are clear. Those who want to attract investment must strengthen their competitiveness. Those who want to ensure reliable health care must appropriately reward new therapies. Otherwise, these global dynamics will inevitably affect both the economy and health care at home. Already today, roughly one in four medicines introduced in the United States between 2014 and 2023 is not available in Europe. The gap is even larger for gene and cell therapies. The primacy of industrial policy: from consensus to action — now Germany does not lack potential or substance. We still have a strong industrial base, a tradition of invention, outstanding universities and research institutions, and a private sector willing to invest. Political initiatives such as the coalition agreement, the High-Tech Agenda and plans for a future strategy in pharmaceuticals and medical technology provide important impulses, which I strongly welcome. > A fair market environment without artificial price caps or rigid guardrails is > the strongest magnet for private capital, long-term investment and a resilient > health system. But programs must now translate into a coherent action plan for growth. We need innovation-friendly and stable framework conditions that consider health care, economic strength and national security together — as a strategic ecosystem, not as separate silos. The value of medical innovation must also be recognized in Germany. A fair market environment without artificial price caps or rigid guardrails is the strongest magnet for private capital, long-term investment and a resilient health system. Faster approval procedures, consistent digitalization and a determined reduction of bureaucracy are essential if speed is once again to become a competitive advantage and a driver of innovation. Germany can reinvent itself, of that I am convinced. With courage, strategic determination and an ambitious push for innovation. The choice now lies with us: to set the right course and unlock the potential that is already there.

A blue wave may already be cresting. Democrats have flipped 28 Republican-held seats in state legislatures across the country over the past 14 months, a sign that the GOP is indeed at risk of losing control of the House, and maybe even the Senate, in the midterms. Democratic wins have come even in deep red states, including Texas, Arkansas and Mississippi, and often by margins that make Republican leaders uneasy. “I’m ringing the alarm bell,” said Brendan Steinhauser, a Texas GOP consultant who has run campaigns for Republicans in the state, including Sen. John Cornyn and Rep. Dan Crenshaw. The results of these state-level elections reflect the immediate concerns of the electorate, provide a launching pad for the next generation of national leaders and could influence the future makeup of Congress through redistricting. They may also give both Republicans and Democrats a preview of the midterm battles to come. For Republicans, the results are a sign that they must do more to motivate low-propensity voters who helped carry President Donald Trump back to the White House, said a senior GOP campaign operative, who was granted anonymity because he didn’t have permission from the party to speak freely about the losses. “We’re the party of low propensity voters now,” said the operative. “How do we turn out these Republican voters in a midterm election?” One of the first signs that Democrats were building momentum came in August, when an Iowa Senate district swung more than 20 points to elect Democrat Catelin Drey. It was the second seat Democrats flipped in the state last year, and the moment that broke the Republican Senate supermajority in the General Assembly. Then in November, Democrats did it again: They flipped three of the six Republican-held districts in a Mississippi special election, again breaking a GOP Senate supermajority. “You are seeing people just vote for change,” said Brian Robinson, a GOP consultant in Georgia, where Republicans lost a seat in December. Robinson, an outside adviser for the state House GOP caucus, says Republicans are blamed for high prices because they’re in charge. “If it’s any one thing, it is [the] cost of living.” Robinson said, arguing that Trump will do something to reduce prices before the midterms. In recent weeks, the president has indeed taken steps, including by touting a pledge from tech companies to reduce energy costs associated with data centers and releasing 172 million barrels of oil from the Strategic Petroleum Reserve. The Iran war, which has sent global oil prices skyrocketing, complicates that effort. After Democrats flipped 13 Virginia seats and five New Jersey seats in November, the Democratic Legislative Campaign Committee went back to reassess state races around the country. They expanded their 2026 target map to 42 chambers and invested $50 million in changing the makeup of state legislatures — the widest map and largest single-year budget DLCC has ever approved. Legislatures in Arizona and New Hampshire are now on the “flip” list, and the DLCC hopes to break or prevent GOP supermajorities in red states across the South and Midwest. Their success could give Democrats more state power over judicial nominees, protect the veto power of Democratic governors in states with GOP-led legislatures and hand Democrats greater influence over redistricting. Republicans, meanwhile, are waiting for the funding to hit. As of January, the RNC has just over $100 million and Trump’s MAGA Inc. PAC has $300 million. State Republicans say when that cash flows into midterm races, it will enable them to get low-propensity voters to vote. Turnout was a major point of discussion at an RNC conference call that Wisconsin GOP Chair Brian Schimming attended Tuesday, and he says Republicans will dedicate a lot of resources to motivate voters in November. “We’ve met with the White House more than once, and they keep track of the target states pretty closely,” said Schimming, adding he also expects Trump and Vice President JD Vance to stump in key Wisconsin congressional districts closer to the election. “They are big base motivators.” In the meantime, Democrats keep flipping state seats. The latest came Tuesday night, when Bobbi Boudman beat Republican Rep. Dale Fincher in a New Hampshire Senate seat that Trump won by 9 points. On March 24, voters will decide in a special election who represents the Florida state House seat that includes Mar-a-Lago. Democrat Emily Gregory, a small business owner who is running against Republican Jon Maples, a businessman, saw her total campaign earnings jump by nearly 75 percent between Jan. 9 and Feb. 12. In November, a national PAC connected Gregory with Drey, who flipped the Iowa seat in August. Drey advised Gregory to find the affordability issue that matters most to her district — the way energy costs resonate in New Jersey and property insurance does in Florida. “In this moment, we have all of the issues on our side. We have all of the momentum on our side,” Gregory recalled Drey telling her. “It’s just up to you as a candidate to get in front of every single voter you can and communicate that message.”

BRITAIN’S LABOUR PARTY STARES INTO THE ABYSS IN ITS WELSH HEARTLAND In the old coalfields of south Wales, Britain’s center-left establishment faces being crushed by a nationalist left and populist right. POLITICO went to find out why. By DAN BLOOM and SASCHA O’SULLIVAN in Newport, South Wales Photo-Illustration by Natália Delgado/POLITICO Eluned Morgan, the Welsh first minister, stood in a sunbeam at Newport’s Victorian market and declared: “Wales is ready for a new chapter.” Many voters agree. The problem for Morgan is: few think she’ll be the one to write it. This nation of 3 million people, with its coalfields, docks, mountains and farms, is the deepest heartland of Morgan’s center-left Labour Party. Labour has topped every U.K. general election here for 104 years and presided over the Welsh parliament, the Senedd, since establishing it 27 years ago. Yet Senedd elections on May 7 threaten not only to end this world-record winning streak, but leave Welsh Labour fighting for a reason to exist. One YouGov poll in January put the party joint-fourth with the Conservatives on 10 percent, behind Welsh nationalists Plaid Cymru on 37 percent, Nigel Farage’s populist Reform UK on 23 percent and the Greens on 13 percent. Other polls are less dramatic (one last week had Reform and Plaid equal, and Labour a closer third), but the mood remains stark.  The most common projection for the 96-seat Senedd is a Plaid minority government propped up by Labour — blowing a hole in Labour’s status as the default governing party and safe vote to stop the right, and echoing recent by-elections in Caerphilly (won by Plaid) and Manchester (won by Greens). POLITICO visited south Wales and spoke to 30 politicians and officials across Labour, Plaid and Reform. | Dan Bloom/POLITICO It would raise the simple question, said a senior Welsh Labour official granted anonymity to speak frankly: “What is the point in this party?’” POLITICO visited south Wales and spoke to 30 politicians and officials across Labour, Plaid and Reform, including interviews with all three of their Welsh leaders, for this piece and an episode of the Westminster Insider podcast. The conversations painted a vivid picture of a center-left establishment fighting for survival in an election that could echo far beyond Wales. While in the 1980s Welsh Labour could unite voters against Margaret Thatcher’s Conservatives, now it is battling demographic changes, a decline in unionized heavy industry and an anti-incumbent backlash. All have killed old loyalties and habits. Squeezed by Plaid and Greens to their left and Reform to their right, some in Labour see parallels with other mainstream postwar parties facing a reckoning across Europe. This week, Germany’s conservative Christian Democrats and center-left Social Democrats lost to the Greens in the car production region of Baden-Württemberg; the latter barely scraped 5 percent. In the recent Manchester by-election, the Conservatives lost their deposit. Welsh Labour MPs fear a reckoning. One said: “We will have to start again. We rebuild. We figure out, what does Welsh Labour mean in 2026? What do we stand for?” NEW CHAPTER, SAME AUTHOR It takes Morgan 20 minutes to walk the 500 meters from Newport Market to our interview. Some passers-by flag her down; others she ambushes. We pass a baked goods shop (“Ooh, Gregg’s! That’s what I want!”) and Morgan emerges with a latte, though not with one of the chain’s famous sausage rolls. She introduces herself to one woman as “Eluned Morgan, first minister of Wales.” Her target looks vaguely bemused.  After the Covid pandemic, people are simply more aware of what the Welsh government actually does — which means Labour, as the incumbent, gets more blame when things go wrong. | Matthew Horwood/Getty Images A peer and ex-MEP who joined the Senedd in 2016, Morgan is a fixture of Wales’ Labour establishment who became first minister unopposed in August 2024 after her predecessor, Vaughan Gething, resigned over a donations scandal. “I didn’t have a mandate really, because I was just kind of thrown in,” she tells POLITICO midway up the high street. “I thought, right, I need a program, so I went out on the streets and took my program directly from the public without any filter.”  She is selling a nuts-and-bolts offer of new railway stations, a £2 bus fare cap and same-day mental health care. Morgan casts herself as the experienced option to beat what she calls the “separatists” of Plaid and the “concerning” rise of populism. She means Reform, which wants to scrap net zero targets and cut 580 Welsh civil service jobs. Yet paradoxically, she also paints herself as a vessel for change. “[People] want to see change faster,” she said in John Frost Square, named after the leader of an 1839 uprising that demanded voting rights for all men. She wants to show “delivery” and “hope.” Dimitri Batrouni, Newport Council’s Labour leader, suggested an Amazonification of politics is under way. “Our lives commercially are instant,” he said. “I want something, I order it, it’s delivered to my house … people quite naturally want that in their governments.” But after 27 years, many voters are rolling the dice on delivery elsewhere. Welsh Labour is promising to end homelessness by 2034, but previously made the same pledge by 2026. Around 6,900 people are still waiting two years or more for NHS treatment (though this figure was 10 times higher during the Covid-19 pandemic). Education rankings slumped in 2023. At Newport’s Friars Walk shopping center, retired mechanical engineer Roy Wigmore, 81, said all politicians are liars. “I’ve voted Labour all my life until now,” he said, “but I’ll probably vote for somebody else — probably Nigel Farage.” ‘SHIT, WELL, HE DIDN’T CALL ME’ Much of this anger is pointed at Westminster — which is why Labour has long tried to show a more socialist face to Wales.  It was the seat of Labour co-founder Keir Hardie as well as of Nye Bevan, who launched Britain’s National Health Service in 1948. “Welsh Labour” was born out of the first Senedd-style elections in 1999, when Plaid surged in south Wales heartlands while Tony Blair’s New Labour appealed to the middle classes. For years, this deliberate rebranding worked; Labour pulled through with the most seats even when the Tories ruled Westminster. Yet in 2024, the party boasted of “two Labour governments at both ends of the M4” — in London and in Cardiff — working in harmony. The emphasis soon flipped back when things went wrong in No. 10; Morgan promised a “red Welsh way” last May. She is “trying to find our identity again,” said the MP quoted above. Morgan appeared to disown the “both ends of the M4” approach, while declining to call it a mistake. “Look, that was a decision before I became first minister,” she said. A peer and ex-MEP who joined the Senedd in 2016, Morgan is a fixture of Wales’ Labour establishment who became first minister unopposed in August 2024 after her predecessor, Vaughan Gething, resigned over a donations scandal. | Matthew Horwood/Getty Images She tries to be playful in distancing herself from Keir Starmer. “He came down a couple of weeks ago and I was very clear with him, if you’re coming you need to bring something with you. Fair play, he brought £14 billion of investment,” she said. “If he wants to come again, he’ll have to bring me more money.” But she has also hitched herself to Starmer for now — unlike Scottish Labour leader Anas Sarwar, who has called for the PM to go. As we sat down, Morgan professed surprise at news that Sarwar called several Cabinet ministers beforehand. “Did he! Shit, well, he didn’t call me,” she said. “Look at the state of the world at the moment; actually what we need is stability,” she added. “We need the grown-ups in the room to be in charge, and I do think Keir Starmer is a grown-up.” ‘ELUNED WASN’T HAPPY’ Morgan has mounted a fightback since Plaid won October’s Caerphilly by-election.  She has hired Matt Greenough, a strategist who worked on London Mayor Sadiq Khan’s re-election campaign last year, said three people with knowledge of the appointment. One of the people said: “During Caerphilly, it became quite clear there were a lot of problems. Eluned wasn’t happy with Welsh Labour or the way the campaign was running. She did a lot of lobbying and got the Welsh executive to basically give her complete power over the campaign.” Morgan “was angry that the central party [in London] took control of the Caerphilly by-election,” another of the people added. (A Morgan ally disputed this reading of events, saying she would always take a bigger role as the election drew near, and that a wide range of Labour figures are involved in the campaign committee such as a Westminster MP, Torsten Bell.) Morgan also has more support these days from Labour’s MPs — who pushed last year for her to focus less on Plaid and more on Reform. That lobbying may have been a mistake, the MP quoted above admits now. “We were quite naive in thinking that the progressives would back us,” this MP said. Privately, Labour politicians and officials in Wales say the mood and prospects are better than the start of 2026. Though asked if Labour would win the most seats in the Senedd, Batrouni said: “Let’s look and see. It’s not looking good in the polls but … politics changes so quickly.” IT’S NOT JUST ABOUT KEIR STARMER The harsh reality is that Labour’s base in Wales began slipping long before Starmer, rooted in deindustrialization since the 1970s and 80s. Newport, near England on the M4 corridor, has a measure of prosperity that other parts of Wales do not. The 137-year-old market has had a makeover, Microsoft is building data centers and U.S. giant Vishay runs Britain’s biggest semiconductor plant. Here Labour is mostly expecting a fight between itself and Reform. At Newport’s Friars Walk shopping center, retired mechanical engineer Roy Wigmore, 81, said all politicians are liars. “I’ve voted Labour all my life until now,” he said, “but I’ll probably vote for somebody else — probably Nigel Farage.” | Jon Rowley/Getty Images Wales’ west coast and north west are more Plaid-dominated, with more Welsh speakers and independence supporters. But support for nationalists is spreading in the southern valleys. “All across the valleys you’re seeing places where Labour has dominated for 100 years plus but is now in deep, deep crisis,” said Richard Wyn Jones, professor of Welsh politics at Cardiff University. “It has long been the case that a lot of Labour supporters have had a very positive view of Plaid Cymru — they just didn’t have a reason to vote for them until now.” Wyn Jones attributes the change to trends across northern Europe, where traditional left-wing parties have been “unmoored” from working-class occupations. A growing service sector has brought more white-collar voters with socially liberal values. Carmen Smith, a 29-year-old Plaid campaigner who is the House of Lords’ youngest-ever peer, said Brexit had unhitched young, left-leaning voters from the idea of British patriotism: “There are a lot more young people identifying as Welsh rather than British.”  And after the Covid pandemic, people are simply more aware of what the Welsh government actually does — which means Labour, as the incumbent, gets more blame when things go wrong.  All the while, a left-behind contingent of socially conservative ex-Labour voters is turning to Reform UK. At the Tumble Inn, a Wetherspoons chain pub in the valley town of Pontypridd, retired gas engineer Paul Jones remembered: “You could leave one job, walk a couple of hundred yards and start another job … it was a totally different world. I wish we could get it back, but I don’t think it’s going to happen.” He hasn’t voted for years but plans to back Reform. THEY’VE BLOWN UP THE MAP All these changes will be turbocharged by a new electoral map. A previous Labour first minister, Mark Drakeford, introduced a more proportional voting system which will see voters elect six Senedd members in each of 16 super-constituencies. The results will reflect the mood better than U.K. general elections (Labour won 84 percent of Wales’ seats on a 37 percent vote share in 2024), but create a volatile outcome. In the mega-constituency for eastern Cardiff, Wyn Jones believes the six seats could be won by six parties: Labour, Plaid, Reform, the Conservatives, Greens and Liberal Democrats. Ironically, said the Labour MP quoted above, Welsh Labour is now polling so badly that it could actually win more seats under the new system than the old one. Trying to win the sixth seat in each super-constituency will hoover up many resources. The size of each patch changes how parties campaign, said Plaid’s Westminster leader Liz Savile Roberts: “We’ve had to go to places that I’ve never been to.” And the scale means activists have a weaker connection to the candidates they campaign for — compounded in Labour by many Senedd members stepping down. Just six people turned up to one recent Labour door-knocking session in a heartland seat. A left-behind contingent of socially conservative ex-Labour voters is turning to Reform UK. | Huw Fairclough/Getty Images After May 8, the new system will make coalitions or informal support deals more necessary to command a Senedd majority. Morgan declined to say if she would support Plaid’s £400 million-a-year offer to expand free childcare (which Labour says is unfunded), rather than see it voted down. “I’m certainly not getting into hypotheticals,” she said. “I’m in this to win it.”  Her rivals have other ideas. THE PRESIDENT IS COMING On the hill above Newport, a two-story presidential-style image of Rhun ap Iorwerth filled a screen at the International Convention Centre above the words: “New leadership for Wales.” The former BBC presenter, who took over Plaid’s leadership in 2023, strained not to make his February conference look like a premature victory lap. Members could’ve been fooled. They struggled to find parking. There were more lobbyists; more journalists. It is a slow burn for a party founded in 1925, which won its first Westminster seat in 1966. Ap Iorwerth ramped up the anti-establishment rhetoric in his conference speech while Lindsay Whittle, who won Caerphilly for Plaid in October’s by-election, bellowed: “Rich men from London, we are waiting for you!” Yet he insists his success is more than a protest vote, a trend sweeping Europe or a mirror of Reform’s populism. “I’d like to think that we’re doing something different,” Ap Iorwerth told POLITICO. While Morgan accuses him of “separatism,” he said: “We have a growing sense of Welsh nationhood and Welsh identity, at a time when there’s deep disillusionment in the old guard of U.K. politics and a sense of needing to keep at bay that populist right wing.” Ap Iorwerth said there is a “very real danger” that Labour vanishes entirely as a serious force in the Senedd. “The level of support that they have collapsed to is a level that most people, probably myself included, could never have imagined would happen so quickly,” he said. INDEPENDENCE DAY? But Plaid faces three big challenges to hold this pole position. The first is its ground game, stretched thin to cover the new world of mega-seats. On the hill above Newport, a two-story presidential-style image of Rhun ap Iorwerth filled a screen at the International Convention Centre above the words: “New leadership for Wales.” | Matthew Horwood/Getty Images The second is to remain distinct from Labour and the insurgent Greens while running a broad left-leaning platform focused on energy costs, childcare and the NHS. The third is to convince unionist voters that Plaid is not simply a Trojan horse for Welsh independence. Independence is Plaid’s core belief, yet Ap Iorwerth did not mention the word once in his speech, instead promising a “standing commission” to look at Wales’ future. He told POLITICO he would rather have a “sustained, engaging, deep discussion … than try to crash, bang, wallop, towards the line.”  But opponents suggest Plaid will push hard for independence if they win a second term in 2030 — like the Scottish National Party did after topping elections in 2007 then 2011. One conference attendee, Emyr Gruffydd, 36, a member for 19 years, said independence “is going to be part of our agenda in the future, definitely. But I think nation-building has to be the approach that we take in the first term.” Savile Roberts accepted that shelving talk of independence (which is still supported by less than half the Welsh population) is part of a deliberate strategy to broaden the party’s reach and keep a wide left-leaning appeal. “I mean, we know the people that we need to appeal to — it is the disenchanted Labour voters,” she said. For some shoppers in Newport — not Plaid’s home turf — it may be working. One ex-Labour voter, Rose Halford, said of Plaid: “All they want to do is make everybody speak Welsh.” But she’ll consider backing them: “They’re showing a bit more gumption, aren’t they?” TAXING QUESTIONS FOR PLAID If Plaid does win, that’s when the hard part begins. Ap Iorwerth would seek urgent talks about changing Wales’ funding formula from Westminster — but cannot say how much this would raise. And Plaid has vowed not to hike income tax, one of the few (blunt) tax instruments available to the Welsh government. Strategists looked at the issue before and feared it would prompt taxpayers to flee over the border to England. So Plaid promises vague financial “efficiencies” in areas such as child poverty, where spending exceeded £7 billion since 2022, and health. Whittle said: “There’s an awful lot of people pen-pushing in the health service. We don’t need pen-pushers.” Labour’s attack machine argues that Plaid and Reform UK alike would cut services. Ap Iorwerth insists his and Farage’s promises are different: “We’re talking about being effective and efficient.” But he admitted: “You don’t know the detail until you come into government.”  Ap Iorwerth jettisoned any suggestion that Plaid would introduce universal basic income, saying it is “not a pledge for government.” He added: “It’s something that I believe in as a principle. I don’t think we’re in a place where we have anything like a model that could be put in place now.” Ap Iorwerth would seek urgent talks about changing Wales’ funding formula from Westminster — but cannot say how much this would raise. | Matthew Horwood/Getty Images The blame game between Cardiff and Westminster will run hot. Ap Iorwerth voiced outrage this week at a leaked memo from Starmer in December, ordering his Cabinet to deliver directly in Wales and Scotland “even when devolved governments may oppose this.” FARAGE’S WELSH SURGE And then there’s Reform. Farage’s party has rocketed in the polls since 2024; typical branch meetings have swelled from a dozen members to several dozen. Since February, Reform has even had its own leader for Wales — Dan Thomas, a former Tory councillor in London who says he recently moved back to the area of Blackwood, in the south Wales valleys. Some party figures have observed a dip after the Caerphilly by-election, where Reform came second. Thomas insists: “I don’t think we’ve plateaued” — and even said there is room to increase a 31 percent vote share from one (optimistic) poll. “There’s still a Labour vote to squeeze,” he told POLITICO.  “We’re targeting all of Wales.” It is a measure of Plaid’s success that Reform UK often now presents the nationalist party as its main competition. “It’s a two-horse race [with Plaid], that’s what I say on the doors,” said Leanne Dyke, a Reform canvasser who was drinking in the Pontypridd Wetherspoons. James Evans, who is now one of Reform’s two Senedd members after he was thrown out of the Conservative group in January on suspicion of defection talks, argues his supporters are underrepresented in polling because they are “smeared” as bigots. Evans added: “Very similarly to what happened in America when Donald Trump was elected, I think there is a quiet majority of people out there who do not want to say they’re voting Reform, who will vote Reform.”  Reform has its own custom-built member app, ReformGo, as it canvasses data on where its supporters live for the first time. It sent a mass appeal by post to all registered Welsh voters in late 2025 (before spending limits kicked in). Welsh campaign director David Thomas is recruiting a brand new slate of 96 candidates, booking hotels for training days with interviews, written exercises and team-building. Daytime TV presenter Jeremy Kyle has helped with media training. English officials cross the border to help; Reform still only has three paid officials in Wales. FARAGE HAS AN NHS PROBLEM Lian Walker, a postal worker from the village of Pen-y-graig, would be a prime target for Reform. “There’s people who I see on the databases, they don’t work,” she said in Pontpridd’s Patriot pub, “but they get everything; new windows, earrings, T-shirts, shorts.” She supports Reform’s plans to deport migrants. But on the NHS, she says of Reform: “They want it to go private like America.” Labour and Plaid drive this attack line relentlessly. The full picture is more nuanced — but still exposes a tension between Farage and Thomas. But Farage has an advantage; the right is less split than the left. | Ben Birchall/PA Images via Getty Images While Reform emphasizes it would keep the NHS free at the point of use, Farage has not ruled out shifting its funding from general taxation to a French-style insurance model, saying that would be “a national decision ahead of a general election.” Thomas, however, broke from this stance. He told POLITICO: “No, no. We rule out any kind of insurance system or any kind of privatization.” He added: “Nigel’s also said that devolved issues are down to the Welsh party, and I wouldn’t consider any kind of insurance-based or private-based system for the Welsh NHS.” Labour and Plaid are relying on an anti-Reform vote to keep Farage’s party out of power. Opponents have also highlighted the jailing of Nathan Gill, Reform’s former Welsh leader, for taking bribes to give pro-Russia interviews and speeches. But Farage has an advantage; the right is less split than the left. In Evans’ sprawling rural seat of Brecon and Radnorshire, two people with knowledge of the Conservative association said its membership had fallen catastrophically from a recent peak of around 400. On the other hand, the sheer number of defections makes Reform look more like a copycat Conservative Party. A former Tory staffer works for Evans; Thomas’ press officer is the Welsh Conservatives’ former media chief. Evans said last year that 99 percent of Reform’s policies were “populist rubbish,” but was allowed to see the policy platform in secret before he agreed to join (and has since contributed to it). While the long-time former UKIP and Brexit Party politician Mark Reckless led a policy consultation in the first half of 2025, former Conservative Welsh Secretary David Jones — who defected without fanfare last year — played a hands-on role behind the scenes working up manifesto policies, two people with knowledge of his work said. THE NIGEL SHOW Then there is Reform’s reliance on Farage himself.  The party deliberately left it late before unveiling a Welsh leader, said a Reform figure in Wales, and chose in Thomas a Welsh figure who would not “detract from Nigel’s overall umbrella and brand.” While Welsh officials and politicians worked on the manifesto, Farage himself was involved in signing it off — as were several others in London, said Evans, including frontbench spokespeople Robert Jenrick, Suella Braverman and Zia Yusuf. Thomas said: “Ultimately, it’s my decision to sign off the manifesto. Of course, Nigel was consulted because he’s our U.K. leader, and we want to ensure that what’s going on in Wales is aligned to the broader picture in the UK.” Reform’s Welsh manifesto promises to cut a penny off every band of income tax by 2030, end Wales’ “nation of sanctuary” plan to support asylum seekers, scrap 20mph road speed limits and upgrade the M4 and A55 highways. But costings have not been published yet — Reform has sent them to be assessed by the Institute for Fiscal studies, a nonpartisan think tank — and like other parties, Reform faces questions about how it will all be paid for. Asked if Reform would begin work on the M4 and A55 upgrades by 2030, Thomas replied: “We’d like to. But we all know in this country, infrastructure projects take a long time.” While Welsh officials and politicians worked on the manifesto, Farage himself was involved in signing it off — as were several others in London, said Evans, including frontbench spokespeople Robert Jenrick, Suella Braverman and Zia Yusuf. | Huw Fairclough/Getty Images ‘I’VE GOT TO FOCUS ON WHAT I CAN CONTROL’ These harsh realities facing Wales’ would-be rulers are a silver lining for Labour. Morgan avoided POLITICO’s question about whether she believes the polls — “I’ve got to focus on what I can control” — but insisted many voters remain persuadable. “People will scratch the surface and say [our rivals] are not ready,” she said. Alun Michael, who led the first Welsh Labour administration in 1999, said the idea that the Labour vote has “collapsed completely” is wrong. “It’s always dangerous to go on opinion polls as a decider of what will happen in an election,” he said. Whoever does win will deserve a moment of levity. If Ap Iorwerth wins the most seats on May 7, he will drink an Aperol spritz; Thomas will have a glass of Penderyn Welsh whisky.  As for Morgan? She would like a cup of tea — milk, no sugar. Perhaps survival would be sweet enough.

Reform UK’s Welsh leader has ruled out moving to an insurance-based healthcare system, despite the party’s U.K.-wide boss Nigel Farage keeping the idea on the table. Dan Thomas, who took charge of Farage’s populist right-wing party in Wales last month, said he would not consider “any kind of insurance-based” reform to Britain’s National Health Service (NHS). Thomas spoke to POLITICO for a special feature and Westminster Insider podcast on the battle for the Welsh parliament, the Senedd, on May 7. Both will be released on Friday. His position differs from that of Farage, who leads the insurgent party across the U.K. It is an early sign of the challenge that faces Farage — who has long had a presidential-like hold on his parties — in reconciling the messaging from Reform’s growing network of office-holders. While a Reform spokesperson told POLITICO it would keep the NHS free at the point of use for British citizens, Farage has not ruled out other reforms, such as moving funding of the NHS from general taxation to an insurance system. Asked at the party’s Welsh manifesto launch on Mar. 5 if he would be prepared to look at reforms such as a French-style insurance system (in which citizens have mandatory insurance and pay through social security contributions), Farage said: “That would be a national decision ahead of a general election.”  He added: “On the big U.K. picture of health, I’m prepared to consider any alternative to the failure we’ve got now … as for devolved powers, I’ll let Dan speak to that.” Thomas later said he would not support moving to an insurance-based system in Wales. “No, no,” he said in an interview. “We rule out any kind of insurance system or any kind of privatization.  “It will be free at the point of use. That’s what the public in Wales wants, and that’s what we will deliver.”  Asked if he disagreed with Farage’s remarks on an insurance model, Thomas replied: “Look, Nigel’s also said that devolved issues are down to the Welsh party, and I wouldn’t consider any kind of insurance-based or private-based system for the Welsh NHS.  “I think we can improve the NHS in Wales within the existing £14 billion budget, and it just takes focus. We [also] need more ministerial authority and intervention when services aren’t delivering.” A WELSH TEST Polls predict Reform (as well as Welsh nationalist party Plaid Cymru) will surge ahead of the Labour incumbents in elections to the Senedd on May 7. “We rule out any kind of insurance system or any kind of privatization,” said Dan Thomas. | Jon Rowly/Getty Images The future of the NHS is a key attack line in the campaign for the center-left Labour and left-wing Plaid Cymru, who accuse Reform of flirting with privatization. Reform said in its 2024 general election manifesto that NHS services “will always be free at the point of use,” though not for foreign citizens. In November, the party announced plans to raise the existing “health surcharge” for visa applicants from £1,035 to £2,718 per year. A Reform UK spokesperson said Wednesday: “We will always keep the NHS free at the point of use for British citizens.” The comments from Thomas and Farage appear to raise the prospect that Reform UK could consider one funding model for England and another for Wales. Mark Dayan, a policy analyst at the Nuffield Trust, a nonpartisan health think tank, said this would technically be possible, but changing the model at any level would be a major upheaval. “It would certainly be possible for Wales and England to have different approaches to coverage and user charges, because health is already a devolved issue,” Dayan said. “Wales already has some separate user charging policies around prescriptions, for example. “The taxation side of it will be really complicated … you’d be taking a lot of money out of some taxes and piling it into payroll taxes to make it social insurance. So you’d have to rewire things quite a bit, and some of that would probably require you to redesign how money goes from Westminster to the other U.K. countries, whether or not they had social insurance as well.”

President Donald Trump’s military campaign against Iran has Washington’s Asian allies scrambling to address an energy crisis that could destabilize many of their economies within weeks. And so far their appeals for guidance or assistance from the Trump administration are going unheeded. Asian countries are some of the most exposed to the energy crisis sparked by the Iran war because they rely heavily on oil and liquefied natural gas that passes through the Strait of Hormuz, which has effectively ground to a halt since the first U.S.-Israeli strikes on Iran two weeks ago. In that time, Japan, Thailand, Vietnam, South Korea and others have struggled to decode Trump’s yo-yoing statements about the goals of the operation and when it will end, according to three Asian officials and one former U.S. official who were granted anonymity to discuss the tensions. “We’re not receiving any communication from the Trump administration,” said one of the people, a Washington-based Asia diplomat. Asked what the Trump administration could do, the person said, “Ideally, just end the conflict.” Another one of the officials from an Asian country pointed out that there are actions short of that that the U.S. could take to ease the pressure on energy markets, such as enlisting other countries to participate in its effort to guarantee insurance for tankers transiting the Strait of Hormuz. The Trump administration has given no indication that it plans to take such actions. The International Energy Agency said Wednesday its member countries would release 400 million barrels of oil from their emergency stocks in the largest such reserves distribution in its history, but it’s unclear how much this will ease the pressure on Asian countries. Many Asian economies lack large domestic reserves and are thus particularly exposed to price spikes and supply disruptions. “Our oil reserves are enough for about one month of domestic consumption,” the Washington-based Asian diplomat said. President Donald Trump said Wednesday that Washington’s attacks on Iran’s navy should assuage concerns about the safety of ships transiting the Strait, but that does not to appear to have done much to ease jitters. The second Asian official said some of Trump’s comments suggesting he is digging in for a long conflict are ratcheting up concern. His country’s alarm level will be dictated, “by how long this goes on,” the official said. Trump said Wednesday that the U.S. has hit a significant number of Iranian military targets and suggested the war could be over quickly. He has also said it could take four to six weeks, but has also called for Iran’s “unconditional surrender,” which could take much longer. Countries across the Indo-Pacific are taking measures to limit the impact of a looming cut in oil and gas from the Persian Gulf if supplies don’t resume in the next two weeks. The Philippines and Vietnam have revived Covid-era work-from-home directives to ease consumer demand for gasoline. India has imposed a 20 percent cut in LNG supply to the country’s industrial sector, New Delhi announced Wednesday. The Japanese government announced Wednesday it will release some of its strategic petroleum reserves to compensate for a shortfall in imports. The U.S. could see long term effects of leaving its Asian allies to fend on their own. “Foreign embassies need and expect information that explains what the U.S. is doing, reassurance that this is a short-term problem and what our plan is to help,” said Scot Marciel, former principal deputy assistant secretary for the State Department’s Bureau of East Asian and Pacific Affairs during the Obama administration. “Not doing that just adds to a pretty strong sense in the region that the administration is not really making a lot of effort to be a good partner.” The White House said allies will ultimately benefit from what is a temporary disruption. “President Trump has been clear that these are short-term disruptions,” White House spokesperson Taylor Rogers said. “President Trump is in close contact with our partners around the world, and the terrorist Iranian regime’s attacks on its neighbors prove how imperative it was that President Trump eliminate this threat to our country and our allies.” The Trump administration has limited options to cushion the impact of the supply interruption on the economies of allies and partners in the Indo-Pacific. An oil commodity trader at a major U.S. investment bank said America’s LNG production is already running at maximum and there is no emergency flex capacity that American producers can bring to bear to supply Asia. “There is no short term, immediate thing that the U.S. can do for Asia — there is no pipeline or trucking that can get more gas from here to there,” said the trader, who was granted anonymity because they were not authorized to speak publicly about the issue. Last week the Trump administration said it would temporarily allow India to accept Russian oil. India, a larger refiner, also supplies petroleum products like gasoline and diesel fuel to other Asian countries. Asian countries are competing with each other as they try to pivot to other sources of oil and gas. The jockeying is hitting the wall of recent restrictions on output by regional refineries due to the lack of crude oil coming from the Persian Gulf. China could potentially wrangle a short-term easing in supply constraints in Asia if it taps its close ties with Tehran to ensure that China-bound cargoes pass through the Strait of Hormuz unmolested by Iranian forces. Those shipments may already be happening, according to CNBC reporting Tuesday. Trump has spent the past week attempting to cool nerves in the global energy market, as the price of oil has spiked by more than 29 percent since the U.S. and Israel first launched attacks on Iran. “I think you’re going to see great safety. We have decimated that country. They’re paying a big price now,” Trump said Wednesday, responding to a question about whether oil companies should transit the Strait. But Iran has continued to hit ships in the vital waterway. On Wednesday “unknown projectiles” hit and sparked a fire on a Thai cargo vessel in the Strait while two other ships were hit in the nearby Persian Gulf, the New York Times reported. The leaders of G7 countries — which includes Japan — agreed in a call on Wednesday to prepare for future freedom of navigation operations though such efforts are not possible now “as it remains an active theater of war,” according to a French account of the discussion. While the U.S. has been concerned that Iran has begun to lay mines in the Strait of Hormuz, Trump said Wednesday the U.S. believes Iran hasn’t yet done so. He said the U.S. has hit 28 mine-laying ships. Japan’s Prime Minister Sanae Takaichi will have the chance to raise her concerns and others on the continent when she arrives in Washington next week for a summit with Trump that was planned before the war broke out but has taken on new meaning amid the turmoil. “The president made a decision on Iran without consulting allies, and they’re bearing the brunt of it. So the president obviously needs to appreciate the cost that Japan will bear” when he meets with Takaichi next week, Rahm Emanuel, former U.S. ambassador to Japan, said.

Tensions in the Strait of Hormuz are escalating as ships come under attack and the U.S. moves to counter suspected Iranian mine-laying operations, raising fears of further disruption to global shipping and energy flows. The narrow channel between Iran and Oman carries roughly a fifth of the world’s oil supply, making it one of the most critical energy chokepoints in global trade. Europe relies on shipments passing through the strait for fuel imports and refining — including diesel and jet fuel — and disruptions have already pushed energy prices higher since the U.S.-Israel war on Iran began. The escalation comes amid U.S. media reports that Iran may be preparing to deploy naval mines in the area, prompting Washington to target suspected mine-laying vessels. The warning has also reached European shipowners. Greece’s shipping ministry circulated an internal advisory to shipping companies warning that Iran may already have mined the Strait of Hormuz or could do so imminently. “According to information from U.S. intelligence agencies reported by international and domestic media, there are reports that Iran has either already mined or may mine the Strait of Hormuz,” the advisory said. “Given that the possible mining of the area poses a very serious threat to the safety of navigation, shipping companies and captains of Greek ships … should incorporate the above into their risk assessment and monitor developments.” U.S. Central Command said in a social media post late Tuesday that it had struck 16 Iranian vessels believed to be involved in laying mines near the strait. It remains unclear whether any mines were successfully deployed. U.S. President Donald Trump also warned Tehran of severe consequences if mining operations continue. “If Iran has put out any mines in the Hormuz Strait … we want them removed immediately,” Trump said Tuesday in a post on Truth Social, adding that U.S. forces would “permanently eliminate” any boat attempting to lay mines. But even if mines are never deployed, the threat alone is enough to keep vessels away from the waterway. “It almost doesn’t matter [whether the strait is mined or not],” said Matthew Wright, principal freight analyst at Kpler. From a shipowner’s perspective, the risk is enough. “Iran does not need to attack a ship every day to stop shipping,” he added. “All they have to do is show they can — and they have.” On Wednesday, at least three new incidents involving commercial vessels were also reported, according to the United Kingdom Maritime Trade Operations (UKMTO). Donald Trump warned Tehran of severe consequences if mining operations continue. | Kay Nietfeld/picture alliance via Getty Images A cargo vessel was hit by an unknown projectile in the Strait of Hormuz, triggering a fire on board and forcing the crew to evacuate, UKMTO said in an incident warning issued early Wednesday. Another container vessel earlier reported sustaining damage from a suspected projectile. The escalating confrontation is deepening the crisis already affecting shipping in the area. Maritime traffic through the Strait of Hormuz has collapsed since the war began. Normally 15 million to 18 million barrels of crude oil pass through the strait each day, roughly a fifth of global oil consumption. But tanker traffic has fallen sharply as shipping companies suspend voyages and insurers raise war-risk premiums. “For Europe, diesel and jet fuel are likely to become major issues in the next couple of months,” Wright said. “There is simply no alternative route for much of that supply.” Major container carriers including Maersk, MSC, Hapag-Lloyd and CMA CGM have already halted transits through the strait, rerouting vessels or sending them to safe anchorages. Insurance has also become another major constraint. War-risk coverage was briefly withdrawn and is now returning only at sharply higher costs, with some hull and cargo premiums rising 200 to 300 percent. “In the 15 years I’ve covered oil and shipping markets, this is probably the biggest event,” he said in an interview earlier this month, comparing the shock to the early months of the Covid-19 pandemic and the start of the Russia-Ukraine war. Even an immediate ceasefire would not quickly restore shipping through the strait, Wright said. “If the U.S. announced today that the war was over, that could almost make things worse,” he noted. “How do you define the end of the war? If the U.S. simply pulls out or says military action is complete, that wouldn’t solve anything. Iran would still be capable of firing into the Strait of Hormuz, and that uncertainty would add even more risk to the market.” Nektaria Stamouli contributed to this report.

PARIS — The rising price of oil is undermining the European Union’s efforts to rein in Vladimir Putin’s shadow fleet of sanctioned oil tankers. Russian oil is in high demand as the war in the Middle East and tensions around the Strait of Hormuz tighten global supply, sending benchmark crude prices above $100 per barrel on Monday. That risks weakening a central plank of the EU’s efforts to cut off funding for the Russian president’s war in Ukraine: making it harder and more expensive for Moscow to export oil through a network of aging vessels operating outside the Western shipping system. EU countries have already sanctioned hundreds of tankers and are working on new measures aimed at the insurance, crewing and other maritime services that allow those ships to operate — tools Brussels hopes will make the shadow fleet increasingly costly and difficult to run. But a tighter oil market means buyers may still be willing to purchase discounted Russian crude. As prices rise, the financial incentive to secure cheaper Russian barrels grows, offsetting the higher risks and costs associated with sanctioned ships. The demand is expected to be driven by Asian countries like China and India — the world’s first and third-largest importers of oil — which rely heavily on Middle Eastern supplies and are likely to turn to Russia to make up for any shortfalls. Indian refiners have already reportedly moved to buy more Russian crude after the U.S. temporarily eased pressure on the South Asian country by allowing purchases to resume last week. India imports, on average, 10 million metric ton of crude oil per month through the Strait of Hormuz, said Vaibhav Raghunandan, an EU-Russia analyst at the Centre for Research on Energy and Clean Air. “Even if half of this volume is replaced with Russian volumes at sea, it will translate to huge profits for the Kremlin.” The shift comes after millions of barrels of oil were stranded at sea last week as escalating tensions blocked the Strait of Hormuz, a maritime choke point through which a fifth of the world’s oil and liquefied natural gas flows. Meanwhile, around €1.3 billion of Russian crude is currently at sea looking for buyers, Raghunandan estimates. SANCTIONS STALL The market squeeze also comes at a difficult moment for Brussels. The EU is trying to push through a new sanctions package aimed at tightening restrictions on Russia’s shadow fleet — including limits on maritime services — but the proposal is currently stalled after Hungary vetoed the plan. The shadow fleet includes hundreds of aging tankers used to transport Russian crude outside Western oversight. Last month, President Donald Trump announced a trade deal with Indian Prime Minister Narendra Modi that included a commitment from New Delhi to halt purchases of Russian oil in exchange for reduced trade barriers with the United States. | Andrew Harnik/Getty Images EU foreign policy chief Kaja Kallas warned last week that rising oil prices risk boosting Moscow’s war effort. “When the oil price goes up, it actually benefits Russia to fund its war,” she said, making the case for the maritime services ban at a virtual meeting of EU foreign ministers. Malte Humpert, founder and senior fellow at The Arctic Institute, said a prolonged Iran–U.S. conflict would likely benefit Moscow by pushing energy prices higher. “Rising prices for sure,” he said, noting that Russian oil and gas revenues have been declining in recent months.  “The question is how long the Hormuz situation is going to last,” he added. “If this is over in a week, the effects are probably negligible. If this continues for a few weeks … especially as we’re getting into the summer months, that’s when exports really pick up again from the Russian side.” Humpert argued that supply disruptions “always favor the seller who can deliver on time, reliably and discounted.” India has been a key buyer of Russian crude since the start of the war in Ukraine, though purchases had recently declined under pressure from Washington. Last month, President Donald Trump announced a trade deal with Indian Prime Minister Narendra Modi that included a commitment from New Delhi to halt purchases of Russian oil in exchange for reduced trade barriers with the United States. Before that, Indian ports had become a major destination for tankers carrying Russian crude that were shut out of Western markets by sanctions. Last September, the Boracay, a ship under EU sanctions carrying approximately $100 million in Russian oil, was boarded by the French navy, which found two Russian crew members presented by her captain as “security agents” on board.  Upon the ship’s release, it went on to the port of Vadinar in western India, home to an offshore oil terminal that supplies local refineries, maritime traffic data shows. Elena Giordano contributed reporting to this article.

Elisabeth Braw is a senior fellow at the Atlantic Council, author of the award-winning “Goodbye Globalization” and a regular columnist for POLITICO. Her new book, The Undersea War, is out later this year.   Since the U.S. and Israel attacked Iran on Feb. 28, the Strait of Hormuz — the narrow and crucial passage at the mouth of the Persian Gulf — has become extremely dangerous to pass. “Sanctioned tanker laden with flammable gas runs Hormuz gauntlet,” read one shipping headline just last week. And as the number of ships weighing whether to attempt this voyage grows, the escalating situation will have painful implications for global shipping as well as the world’s economies — and Europe won’t be immune. The ship in question was the Danuta I, a recently sanctioned LPG carrier likely “laden with Iranian LPG,” Lloyd’s List, a maritime news service, reported. Perhaps the ship’s owners felt they could take the risk precisely because the ship was transporting Iranian petroleum gas, and Iran — situated on one side of the strait, with Oman on the other — is the actor most likely to attack any ships sailing through. Indeed, the government in Tehran has vowed to attack any ship trying to transit the strait, through which some 20 percent of the world’s oil and natural gas passes on its way from the Persian Gulf to global markets. Large volumes of aluminum and fertilizer pass through the strait as well. Or rather, those are the transit volumes under ordinary circumstances. As of Feb. 28, conditions in the Strait of Hormuz have been decidedly extraordinary. “Right now, ships waiting to transit both on the inside and outside of the Hormuz are awaiting developments and not transiting,” said Svein Ringbakken, CEO of maritime war-risk insurer DNK. “Shipowners take the Iranian threats that ships will be attacked seriously and factor these into their risk assessments.” Even when covered by war-risk insurance (yes, it’s available in wars, including this one), shipowners are highly cautious when it comes to active war zones like the strait. “They’re primarily concerned about ensuring the safety of their crews. To await developments is natural in an early phase of the conflict with major combat operations ongoing,” Ringbakken explained. Only a few ships have been able and willing to transit the strait since clashes began, and like the Danuta I, most of them were shadow vessels transporting Iranian oil. Even if ships in the Gulf only continue to be hit by occasional drone and missile strikes, they, their crews and their cargoes will suffer. | Gallo Images/Orbital Horizon/Copernicus Sentinel Data 2025 The obvious question now is how long the conflict will last. Five days in, nine ships had already been hit or directly targeted in the strait or surrounding waters, with three crew members killed. And while U.S. President Donald Trump has said the war may last up to four to five weeks, wars famously deliver no certainty. Furthermore, because shipping is global by its very nature, Europe will be affected as well. A Swedish-owned tanker, the Stena Imperative, which was transporting oil for the U.S. military, is among the vessels that have been struck. Meanwhile, many more ships waiting north and south of the strait are either owned or flagged in Europe, or are carrying cargo bound for the continent — mostly oil and gas, and possibly aluminum and urea, a nitrogen fertilizer crucial to global agriculture and thus food security. Fortunately, the EU and the U.K. import most of their aluminum and urea from other countries, but they do import significant amounts of diesel, gasoline, oil, jet fuel and kerosene from the Gulf states. Also, while many of the ships idling at the strait’s southern entrance (southeastern, to be precise) will likely leave if the war lasts longer than, say, the end of this week, it’s a different story for the several thousand ships still inside the Persian Gulf. They’re trapped there, and the dangers in the strait mean most don’t dare transit it to reach their next destinations — let alone get back to the Gulf to collect more. War insurance would cover damage to the ship and cargo, but no war insurance can bring lives back. “A prolonged suspension of ship transits, particularly oil and gas tankers, could have a profound effect on energy prices,” Ringbakken pointed out. Indeed, on March 6, Qatar’s Minister of State for Energy Affairs Saad Sherida al-Kaabi told the Financial Times that the war in the Middle East could “bring down the economies of the world.” All Gulf energy exporters would declare force majeure and shut down production within days, he said. Iran has already demonstrated that it’s willing to retaliate against U.S. and Israeli attacks by striking Gulf countries. If the war continues, it may well decide to launch a campaign against selected vessels in the Gulf. To be sure, targeting merchant vessels violates international law — but Iran has never been a stickler for international rules, and it’s unlikely to fully commit to them now, especially after Trump recently told journalists he doesn’t “need international law,” and Defense Secretary Pete Hegseth openly dismissed “stupid rules of engagement” when speaking about the war against Iran. Imagine constant assaults on ships in the Persian Gulf — ships that represent virtually every country on the planet and are laden with cargo bound for worldwide destinations. If that comes to pass, European leaders wouldn’t be the only ones pleading with Trump to end the war. In fact, the whole world would join Qatar’s energy minister in sending distress signals. (Such strikes would also result in devastating oil spills.) Even if ships in the Gulf only continue to be hit by occasional drone and missile strikes, they, their crews and their cargoes will suffer. So would the economy — including America’s. While Trump may not care about international law, he does care about the stock market — and a large chunk of the world’s stock markets depend on the Strait of Hormuz. Let’s hope he heeds that call.

A week after it began its strikes on Iran, the Trump administration’s efforts to stem the rise in energy prices have yet to turn the tide — and analysts warn the worst of the price shocks may still be to come. The U.S. benchmark oil price eclipsed $90 a barrel on Friday for the first time since 2023, up more than $20 since the war began Saturday and the market’s highest one-week jump in history. The price increase has already started to appear for American consumers, with prices at the gas pump up 32 cents a gallon from a week ago. The unyielding price increases — which analysts attributed to the continued disruption in the Strait of Hormuz, through which 20 percent of the world’s crude passes each day — comes as President Donald Trump is under rising pressure to contain the economic impact of the war on Americans, eight months ahead of the midterms, where affordability issues are top of mind. “Crude WILL go to $200 [a barrel], en route higher, unless traffic through the Strait resumes,” said Rory Johnston, an oil analyst who writes the newsletter Commodity Context, in a post on X. “Not clickbait, but rather brutal physics and necessary economic incentives.” The White House has announced several measures aimed at calming the oil markets this week, including temporarily easing sanctions on India’s purchase of Russian oil and offering naval escorts and political risk insurance to oil and gas tankers traversing the Strait of Hormuz. None of those measures has succeeded, however, as traders boost prices on news of disruptions to supply. Iran has succeeded in damaging several oil tankers, Iraq and Kuwait have already throttled oil production because their crude tankers can no longer get to market, and China has warned it could stop exporting fuel amid supply concerns. The longer that ships avoid the Strait of Hormuz, Gulf countries will start to run out of storage capacity and be forced to shut in their production, said Claudio Galimberti, chief economist at research firm Rystad Energy. “If the Strait of Hormuz remains closed for, let’s say, three weeks, then you will have shut in 15 million barrels a day of production in the Middle East,” Galimberti said at a Rystad conference in Washington on Thursday. “That takes us from a position of comfortable oversupply as of [last] Friday to one of incredible deficit, the size of which we’ve never seen.” Galimberti noted that oil may be slow to flow even if shipping traffic resumes, given the difficult and expensive processes required to restart production. “If it’s shut for weeks or months, then it’s going to take weeks and probably months to bring it back to the same level,” he said. Still, the administration has said it sees little cause for long-term alarm. Energy Secretary Chris Wright said Friday morning that Americans should expect gas prices to come down again soon. “It’s weeks, I would say, in the worst case,” Wright told Fox News. “It’s weeks, not months.” Wright acknowledged that prices are “more than we’d like them to be,” but noted they remain far lower than the record levels hit after Russia’s invasion of Ukraine during the Biden administration, when global crude supplies were much tighter. White House press secretary Karoline Leavitt said in a statement that record U.S. oil production, new supplies from Venezuela and efforts to reopen the Strait of Hormuz will keep a lid on prices. “President Trump’s entire energy team, from the White House to the National Energy Dominance Council to Secretaries Wright and Bessent, have a game plan to keep oil prices stable throughout Operation Epic Fury,” Leavitt said. Market analysts are painting a much more dire picture of the situation, however. Six days into the conflict, oil and gas tankers remain largely unwilling to transit the strait, cutting off a key supply route between major oil producers in the Gulf and their customers in Asia and beyond. Even with the price increases this week, markets may not be pricing in the true impact of an extended closure of the strait, said Andon Pavlov, director of oil and tanker research at commodity tracking firm Kpler. “There is a widespread expectation across the market that the alternative of not opening the Strait of Hormuz is just so apocalyptically bad that eventually something will happen,” he said in a Thursday webinar. “Is it going to happen? Every day makes it less and less likely.” Even if the Trump administration can get the price of oil under control, that does not guarantee that the price of gasoline comes down with it, said Catherine Wolfram, a former deputy assistant secretary for climate and energy economics at the Treasury Department. “Economists talk about what’s called rockets and feathers — that gas prices go up like rockets when oil prices go up, but then if oil prices go back down … they go back down like feathers,” said Wolfram, who is now a professor of energy economics at the MIT Sloan School of Management. “Especially if you’re coming into the period when [gas prices] tend to rise because of summer driving, they might just stay high, even if oil prices go back down,” she said. The Development Finance Corporation announced new details Friday on the insurance program aimed at getting tankers moving again, which it said would cover losses up to $20 billion. “We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world,” DFC CEO Ben Black said in a statement. Ben Cahill, an oil analyst and nonresident fellow at Arab Gulf States Institute, said the insurance backstop does not alleviate the fear of being attacked by Iranians, who are “obviously desperate and backed into a corner.” “The measures taken could alleviate some of the risks and maybe drive down some of the costs associated with shipping insurance, but the fundamental problem is still there,” he said. In order to get shipping moving again, “you need a fundamental change in the trajectory of the conflict,” Cahill added. Wright acknowledged in an interview with ABC News on Thursday night that shipping companies have not been willing to transit the strait even with U.S.-backed insurance. “Right now, the biggest issue is just physical security,” he said. “You don’t want to run a large tanker ship through the Strait of Hormuz today, but that’ll change in the not too distant future.” Wright said the U.S. military would begin providing escorts to oil tankers “as quickly as we can,” but its immediate focus was on suppressing Iranian attacks. “First we’ve got to get their ability to cause trouble way down, and then as soon as it’s reasonable to do it, we’ll escort ships through the straits and get the energy moving again,” he said.