The Middle East is the world’s foremost oil-producing region and a major centre for maritime trade.
Its waterways are a critical thoroughfare for cargo ships transporting oil and container ships with goods and appliances on board.
Flare-ups in the Middle East have a predictable impact on the oil price, causing it to spike as investors grow fearful about supply constraints because of possible blockages and attacks on these maritime routes.
As a result, shipping insurance premiums also rise, which are ultimately passed on to the consumer.
Brent crude, the international benchmark, was up 8%, at $75 (£55) a barrel.
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3:30
Israel-Iran: Most asked questions
That has a feed-through across the economy because oil goes into the manufacturing process of many goods and services, whether that’s plastic toys or air travel.
According to the International Monetary Fund (IMF), inflation in advanced economies rises by about 0.4 percentage points for every 10% increase in oil prices.
Some experts are still sanguine about the impact on trade, but the region is already dealing with challenges.
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0:44
Smoke rises in Iran after Israeli strikes
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Houthi rebels, backed by Iran, have been attacking ships passing through the Red Sea to the Suez Canal – a major hub route for container shipping.
“This has forced many ships to go the long way around Africa on routes between Asia and Europe, which adds one to two weeks of travel time and around $1m in cost per journey,” said Sarah Schiffling, an academic at the Hanken School of Economics.
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0:36
Israeli ambassador: ‘We were expecting Iran’s retaliation’
“Longer travel times also mean that global capacity is reduced as ships are tied up on a journey for longer and that all has ripple effects across global transport networks and supply chains.”
Iran has also repeatedly threatened to block the Strait of Hormuz, which connects the Persian Gulf and the Arabian Sea.
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The strait handles a quarter of the world’s oil trade, and analysts at Goldman Sachs predict blockades in the Strait of Hormuz could push prices above $100 (£74) per barrel.
That being said, this would be an extreme step for Iran that would anger its major customer – China – as well as Qatar and the United Arab Emirates (UAE), two other major oil-producing states, who also rely on the strait.
Turkey has urged the US to take action after accusing Israel of violating the Gaza ceasefire deal.
The country’s president Recep Tayyip Erdogan said Washington and its allies should consider sanctions and halting arms sales to put pressure on Israel to abide by the agreement.
Turkey, a NATO member, joined ceasefire negotiations as a mediator, and increased its role following a meeting between Mr Erdogan and Donald Trump at the White House last month.
“The Hamas side is abiding by the ceasefire. In fact, it is openly stating its commitment to this. Israel, meanwhile, is continuing to violate the ceasefire,” Mr Erdogan told reporters.
“The international community, namely the United States, must do more to ensure Israel’s full compliance to the ceasefire and agreement,” he said.
Mr Erdogan was also asked about comments from Israeli Prime Minister Benjamin Netanyahu, who hinted that he would be opposed to any peacekeeping role for Turkish security forces in the Gaza Strip.
The Turkish president said talks on the issue were still underway, adding: “As this is a multi-faceted issue, there are comprehensive negotiations. We are ready to provide Gaza any form of support on this issue.”
Israel has accused Hamas of breaching the truce and previously said its recent military action in Gaza was designed to uphold the agreement.
Relations between former allies Israel and Turkey hit new lows during the Gaza war, with Ankara accusing Mr Netanyahu’s government of committing genocide, an allegation Israel has repeatedly denied.
Image: A rally in support of Palestinians in Istanbul. Pic: Reuters
Speaking during a visit to Israel on Friday, US Secretary of State Marco Rubio said that a planned international security force for Gaza would have to be made up of “countries that Israel’s comfortable with,” but declined to comment specifically on Turkey’s involvement.
Around 200 US troops are working alongside the Israeli military and delegations from other countries, planning the stabilisation and reconstruction of Gaza.
The US is seeking support from other allies, namely Gulf Arab nations, to build an international security force to be deployed to Gaza and train a Palestinian security force.
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1:15
Rubio warns against West Bank annexation
Mr Rubio said many nations had expressed interest, but decisions had yet to be made about the rules of engagement. He added that countries need to know what they were signing up for.
“Under what authority are they going to be operating? Who’s going to be in charge? What is their job?” said Mr Rubio.
The secretary of state also reiterated his earlier warning to Israel not to annex the occupied West Bank, land that Palestinians want for part of an independent state.
A bill applying Israeli law to the West Bank won preliminary approval from Israel’s parliament on Wednesday.
Image: US Secretary of State Marco Rubio speaks with US military personnel in Israel. Pic: Reuters
“We don’t think it’s going to happen”, Mr Rubio said, adding that annexation “would also threaten this whole process”.
“If [annexation] were to happen, a lot of the countries that are involved in working on this probably aren’t going to want to be involved in this anymore. It’s a threat to the peace process and everybody knows it”, he added.
The US has announced it is sending an aircraft carrier to the waters off South America as it ramps up an operation to target alleged drug smuggling boats.
The Pentagon said in a statement that the USS Gerald R Ford would be deployed to the region to “bolster US capacity to detect, monitor, and disrupt illicit actors and activities that compromise the safety and prosperity of the United States homeland and our security in the Western Hemisphere”.
The vessel is the US Navy’s largest aircraft carrier. It is currently deployed in the Mediterranean alongside three destroyers, and the group are expected to take around one week to make the journey.
There are already eight US Navy ships in the central and South American region, along with a nuclear-powered submarine, adding up to about 6,000 sailors and marines, according to officials.
It came as the US secretary of war claimed that six “narco-terrorists” had been killed in a strike on an alleged drug smuggling boat in the Caribbean Sea overnight.
Image: A still from footage purporting to show the boat seconds before the airstrike, posted by US Secretary of War Pete Hegseth on X
Pete Hegseth said his military had bombed a vessel which he claimed was operated by Tren de Aragua – a Venezuelan gang designated a terror group by Washington in February.
Writing on X, he claimed that the boat was involved in “illicit narcotics smuggling” and was transiting along a “known narco-trafficking route” when it was struck during the night.
All six men on board the boat, which was in international waters, were killed and no US forces were harmed, he said.
Ten vessels have now been bombed in recent weeks, killing more than 40 people.
Mr Hegseth added: “If you are a narco-terrorist smuggling drugs in our hemisphere, we will treat you like we treat al Qaeda. Day or NIGHT, we will map your networks, track your people, hunt you down, and kill you.”
While he did not provide any evidence that the vessel was carrying drugs, he did share a 20-second video that appeared to show a boat being hit by a projectile before exploding.
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0:32
Footage of a previous US strike on a suspected drugs boat earlier this week
Speaking during a White House press conference last week, Donald Trump argued that the campaign would help tackle the US’s opioid crisis.
“Every boat that we knock out, we save 25,000 American lives. So every time you see a boat, and you feel badly you say, ‘Wow, that’s rough’. It is rough, but if you lose three people and save 25,000 people,” he said.
On Thursday, appearing at a press conference with Mr Hegseth, Mr Trump said that it was necessary to kill the alleged smugglers, because if they were arrested they would only return to transport drugs “again and again and again”.
“They don’t fear that, they have no fear,” he told reporters.
The attacks at sea would soon be followed by operations on land against drug smuggling cartels, Mr Trump claimed.
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“We’re going to kill them,” he added. “They’re going to be, like, dead.”
Some Democratic politicians have expressed concerns that the strikes risk dragging the US into a war with Venezuela because of their proximity to the South American country’s coast.
Others have condemned the attacks as extrajudicial killings that would not stand up in a court of law.
Jim Himes, a member of the House of Representatives, told CBS News earlier this month: “They are illegal killings because the notion that the United States – and this is what the administration says is their justification – is involved in an armed conflict with any drug dealers, any Venezuelan drug dealers, is ludicrous.”
He claimed that Congress had been told “nothing” about who was on the boats and how they were identified as a threat.
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2:02
What happened at ‘coalition of the willing’ meeting?
European allies were quick to follow that lead. And some countries that have been trading Russian oil appear spooked enough to start backing away from doing so.
But analysts are warning against overstating the impact of all this.
Alexander Kolyandr, senior fellow at the Centre for European Policy Analysis, told Sky News that sanctions won’t be enough on their own.
“There should be an understanding that sanctions alone would not force Putin to stop the war,” he said.
“So Ukraine should get more arms, Ukraine should get more support, and Ukraine should get more guarantees.”
Image: The aftermath of a Russian airstrike in Kharkiv, Ukraine. Pic: Reuters
There appears to have been progress on sending more long-range weapons to Ukraine.
It needs them to neutralise the threat of drones launched from miles behind Russia‘s border.
And possibly towards unfreezing Russia assets to use the proceeds to help fund the Ukrainian war effort, though some nations still oppose the idea.
But this week has seen an unusual level of alignment between the allies on both sides of the Atlantic. That will last as long as Trump does not change his mind.
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2:49
Sanctions are ‘unfriendly act’
The US president wants to broker an end to the war.
Putin will not be serious about negotiating for peace as long as he thinks he has a chance of victory.
“Putin and the Kremlin are pretty much sure that they are winning the war,” Mr Kolyandr told Sky News, “and that if they keep on pushing, Ukraine might collapse.
“And that’s why I don’t think that President Putin is ready to agree to any kind of compromise which would be acceptable for Ukraine or its European allies.”
It may take a lot more than sanctions on a handful of oil companies to persuade Putin it is not in his interest to continue this war.