Key Takeaways
- US military forces have struck over 7,000 targets in Iran, claiming a 95% reduction in drone capabilities and the virtual decimation of the country's anti-aircraft equipment.
- President Trump has announced a rapid ramp-up of Venezuela oil production, inviting "big companies" to rebuild infrastructure following the recent ouster of the Maduro regime.
- The London Metal Exchange (LME) halted electronic trading on Monday following technical failures and extreme volatility driven by the ongoing disruption in the Strait of Hormuz.
- The UK is set to raise steel tariffs to 50% this week as part of a new sector strategy, mirroring aggressive trade stances taken by the US administration.
- EU Commission President von der Leyen unveiled the "EU Inc." proposal, promising a unified corporate structure that allows companies to register across the bloc within 48 hours.
US-Iran Conflict: "Operation Epic Fury" Enters Third Week
President Donald Trump reported on Monday that the US-led military campaign against Iran, dubbed Operation Epic Fury, has continued in "full force" over the past few days. The President claimed that the US has successfully struck more than 7,000 targets, resulting in a 95% reduction in Iranian drone attacks and the destruction of 30 mine-laying ships in the Strait of Hormuz. Despite these gains, the Islamic Revolutionary Guard Corps (IRGC) has vowed to retaliate by targeting American factories across the region in the coming hours, urging civilians to evacuate nearby areas.
The Strait of Hormuz remains a primary global flashpoint, with Trump strongly encouraging nations like China, Japan, South Korea, and European allies to provide naval assistance. While the President noted that "numerous countries" are on the way, he expressed frustration with varying levels of enthusiasm among allies, warning that the level of cooperation "matters to me." Market analysts suggest that the continued closure of the Strait has kept oil prices near $105 a barrel, forcing a massive shift in global energy logistics.
The Venezuela Pivot and Energy Security
To offset the massive disruption in Middle Eastern supplies, President Trump announced that major energy corporations are "going in to Venezuela" to step up oil production rapidly. This follows the capture of Nicolás Maduro in January and the restoration of diplomatic ties between Washington and Caracas. Companies like Chevron (CVX) have already reported record production days in the country, while ExxonMobil (XOM) is reportedly exploring a return to assets previously expropriated.
In Europe, German Chancellor Friedrich Merz confirmed that Norway has pledged to utilize its full oil and gas production capacity to assist the continent. However, Merz took a cautious stance on the conflict, stating that while the war must end quickly, Germany will not participate militarily. He warned that attempting regime change through "bombs" is unlikely to succeed and urged a clear strategy to prevent a total collapse of Iranian statehood.
Market Disruptions and Trade Escalations
The London Metal Exchange (LME) experienced a major technical halt on Monday, forcing the exchange to rely on a "backup pricing waterfall" to produce closing prices. The disruption comes as Gulf smelters, including Aluminium Bahrain (Alba) and Qatalum, declare force majeure due to gas supply cuts and logistical bottlenecks in the Strait. Physical aluminum premiums have surged across Japan and Europe as traders scramble to secure metal that is currently trapped behind the blockade.
On the trade front, the United Kingdom is expected to raise steel tariffs to 50% this week, aligning with the US administration's protectionist shift. Meanwhile, China’s He Lifeng has urged the US to remove unilateral tariffs, though both nations have reportedly agreed to "properly manage differences" despite the escalating regional war. In corporate news, Rolls-Royce (RR) secured a major order for 40 Trent XWB-97 engines from Atlas Air, while Google (GOOGL) announced new project spend caps in its AI Studio to help developers manage costs.
EU Regulatory Overhaul: "EU Inc." and Energy Caps
EU Commission President Ursula von der Leyen announced a sweeping legislative package aimed at shielding the European economy from prolonged Gulf disruptions. The centerpiece is the "EU Inc." proposal, a "28th regime" for corporate law that will allow businesses to register fully online within 48 hours with no minimum share capital. This move is intended to help European startups scale rapidly to compete with US and Chinese giants.
To address skyrocketing energy costs, von der Leyen proposed amending the Emissions Trading System (ETS) Market Stability Reserve to keep carbon prices in check. The Commission is also looking to cut electricity taxation and assess national emergency plans to cap gas-powered generation prices. British Airways, operated by International Airlines Group (IAG), has added extra flights to Singapore and Bangkok to accommodate travelers displaced by the widening conflict zone in the Middle East.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.