PARIS: At least three ships sailing from Iranian ports crossed the Strait of Hormuz despite a US military blockade, but some vessels taking the route later turned back, maritime tracking data indicated on Tuesday (Apr 14).

They were among at least seven Iran-linked vessels that passed through the strait after Washington's blockade came into effect at 1400 GMT (8pm, Singapore time) on Monday, according to maritime data provider Kpler.

The Liberia-flagged bulk carrier Christianna crossed the strait after unloading 74,000 tonnes of corn at the Iranian port of Bandar Imam Khomeini in the Gulf, passing Iran's Larak Island in the strait around 1600 GMT on Monday, Kpler data showed.

A second ship, the Comoros-flagged tanker Elpis, was near Larak Island around 1100 GMT and cleared the strait about 1600 GMT.

It was loaded with 31,000 tonnes of methanol, having left the Iranian port of Bushehr in the Gulf on Mar 31, Kpler data showed.

The tracker indicated that the other vessels that crossed included the Argo Maris, which had also sailed from Iran.

Maritime analysts have cautioned during the recent weeks of conflict around the strait that ships' signals in the region have been disrupted and manipulated, making precise, comprehensive tracking difficult.

US SAYS BLOCKADE INTACT

Iranian forces effectively closed the strait after the war broke out with US and Israeli strikes on Iran on February 28.

The US on Sunday announced its own blockade after peace talks with Iran failed.

The US military said Tuesday its blockade had held and that it had stopped six vessels from sailing out of Iranian ports outside the Gulf during the first 24 hours.

"No ships made it past the US blockade and six merchant vessels complied with direction from US forces to turn around to re-enter an Iranian port on the Gulf of Oman," outside the strait, regional command CENTCOM said in a post on X.

It said the blockade was "being enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman".

The Elpis's AIS transponder signal appeared to go off at 2300 GMT on Monday after it crossed the strait and its location on Tuesday could not be determined.

CHINESE TANKER TURNS AROUND

A Chinese tanker, the Rich Starry, also crossed the strait overnight from Monday to Tuesday via the Iranian-approved vetting route south of Larak Island.

Kpler said that vessel was carrying 31,500 tonnes of methanol and was bound for Sohar in Oman, according to data from its transponder.

It turned around while in the Gulf of Oman at around 1100 GMT on Tuesday and headed back up towards the strait, its destination unknown.

The Christianna turned around off Oman, where it was heading, at around 1500 GMT. Its new destination was also unknown.

The other vessels crossing were the bulk carrier Manali, which had traded with Iran in the past.

The other two were Iran-flagged ships: the container carrier Kashan, which is under US sanctions, and the Moshtari, a cargo ship that then went to an Iranian port on the strait.

The Rich Starry and Elpis are listed by the United States' Office of Foreign Assets Control as being sanctioned for ties to Iran.

WASHINGTON: Donald Trump's son Eric, who oversees the family business empire, will accompany the United States president on his trip next month to China, a spokeswoman for the family organisation told Reuters on Tuesday (Apr 14).

Eric and his wife Lara will accompany Trump in a personal capacity on the May 14 to 15 visit, Trump Organization spokeswoman Kimberly Benza said.

"Eric is deeply proud of his father and the accomplishments of this term, and is attending in a personal capacity as a supportive son. He does not have business ventures in China nor plans on doing business in China. He will not be participating in private meetings, but will instead stand alongside the president to mark this historic occasion."

Nevertheless, the move could raise concerns about a possible conflict of interest, given that Trump's personal wealth and business dealings are managed by Eric and other members of his family.

CNA Games

Guess Word

Crack the word, one row at a time

Buzzword

Create words using the given letters

Mini Sudoku

Tiny puzzle, mighty brain teaser

Mini Crossword

Small grid, big challenge

Word Search

Spot as many words as you can

Show More

Show Less

Eric Trump is executive vice president of the Trump Organization, overseeing investments spanning real estate, golf and blockchain. Lara Trump, a former co-chair of the Republican National Committee, hosts Fox News Channel's My View with Lara Trump.

TRUMP'S CRITICISM OF FORMER PRESIDENT BIDEN'S SON

Trump had criticised his Democratic predecessor, President Joe Biden, for allowing his son Hunter to accompany him to China when Biden was vice president. He accused the younger Biden of using his influence to secure China's financial backing for his investments.

In 2019, Trump publicly invited China to open an investigation into his political rivals. The Biden family has denied wrongdoing.

"President Trump looks forward to travelling to China to discuss many issues of shared importance between our two countries, including enhancing fair trade, improving economic cooperation, and ending the flow of fentanyl precursors into the United States," said White House spokeswoman Anna Kelly.

"This trip will build on the past year of constructive dialogue."

The Chinese embassy in Washington did not immediately respond to a request for comment. The White House has said Trump fully complies with financial ethics and reporting requirements.

A spokesman for Donald Trump Jr said the president's eldest son, who is also an executive vice president at the Trump Organization, would not join the trip.

The trip is the first by a US president in eight years and is aimed at maintaining stable relations between Beijing and Washington.

The world's two largest economies agreed to a truce last year after a bruising period marked by Trump's tariffs and China’s chokehold on rare-earth exports. But some US companies had also hoped Trump's visit could go further than approving deals on Chinese purchases of soybeans and Boeing aircraft, which are already under consideration.

US Senator Elizabeth Warren, a Massachusetts Democrat, in March said Eric Trump's business dealings with Bitmain, a Chinese cryptocurrency mining equipment maker, posed a potential conflict of interest for his father, who has promised to be the "crypto president" and popularise cryptocurrencies' mainstream use in the US.

Warren asked the Commerce Department to address potential national security risks linked to Bitmain, which has supplied equipment to a cryptocurrency mining venture co-founded by Eric Trump, American Bitcoin. Bitmain has repeatedly denied that its hardware poses a security risk.

The spokeswoman for the Trump Organization did not immediately reply to requests for comment on the cryptocurrency allegations.

Miami, Florida-based energy and technology firm Hut 8 launched American Bitcoin in 2025 to focus mainly on bitcoin mining while building a strategic bitcoin reserve. Eric Trump serves as chief strategy officer.

SINGAPORE: After the failure of peace talks over the weekend, United States President Donald Trump declared that he would impose a blockade on the Strait of Hormuz. 

What has come into effect since Monday (Apr 13, US time) should be understood more as a military blockade of Iranian ports. US Central Command clarified that it will not impede ships transiting the strait to and from other ports. 

Control of the Hormuz Strait is the only leverage the Iranians have now. Iran has lost the war militarily, given the extent of damage to its armed forces, its drone and missile stockpiles, its political and military leadership, as well as its uranium enrichment programme.

Using sea mines and the threat of attacks, Iran has declared a large stretch across the strait a “hazardous area” and effectively shut for about 20 per cent of the world’s oil and liquefied natural gas shipments. The last oil tankers to transit the strait before the war are expected to make delivery in the coming days, a pivotal moment in the deepening global energy crisis.

So could Mr Trump’s blockade actually be an astute tactical move?

REMOVING IRAN’S POWER IN THE STRAIT

If enforced effectively, the naval blockade will help the US regain the initiative from Iran’s closure of the Strait of Hormuz. It removes Tehran’s power in deciding which ships to let through, especially in extracting fees in exchange for safe passage through Iranian territorial waters.

A blockade will prevent weapons and other assistance reaching Iran by sea, while also ensuring Iran is unable to pay for external support with relatively cheap oil. 

In particular, the US will also try to ensure that China does not benefit from a steady flow of energy exports via the strait – Beijing is the top buyer of oil passing through the strait (nearly 40 per cent) and also the largest buyer of Iranian oil. This could serve as leverage in China-US negotiations, as the summit between Presidents Xi Jinping and Trump in May looms.

With control of the strait, Iran tried to stretch out talks, in the hope of weakening US resolve to accept a deal – one which would enable Iran to resume its nuclear ambitions and rebuild military assets. 

The US, however, is determined to see that Iran agrees to tough terms or face the resumption of war. The US Navy has deployed two destroyers, drones and helicopters to clear mines in the strait. The Gulf states, as well as France and the United Kingdom are expected to join the mine-clearing operation. Despite threats to destroy the ships, Iran has not attacked them.

WIDER IMPLICATIONS OF A US BLOCKADE

But the blockade also heightens the risk of confrontation. 

Iran’s attacks have spooked insurers and tankers, though relatively few have been hit and with minimal damage, while several Iranian attacks having missed their targets entirely. Despite a dwindling stock of weapons, Iran could still challenge the US blockade or launch fresh attacks on Israel or the Gulf states.

There are also fears that Iran will react to the blockade in one waterway by closing another: Iran has threatened to disrupt the Bab el-Mandeb strait that is a key entry point to the Red Sea and the Suez Canal for shipping between Asia and Europe. Already, Saudi Arabia is reportedly urging the US to end the blockade in the Strait of Hormuz for fear of retaliation on Red Sea transit.

The US blockade is likely to face opposition from countries prepared to pay fees or accept preferential treatment for being “friendly” to Iran, such as China, Russia and Iraq. Mr Trump had also threatened to interdict vessels that have paid tolls to Iran, as tolls carry the implication of recognising Iran’s right to control passage through the strait. For now, there is no confirmation that the US will intercept such vessels or clarity about what it could lawfully do to them.

Tolls and exercise of authority over international waterways are illegal and infringe the United Nations Convention of the Law of the Sea (UNCLOS). The fact is, no country has the right to restrict passage, transit rights, insist on prior permission or collect fees in international waterways. This applies not only to the Strait of Hormuz but also the Straits of Malacca and Taiwan, and the South China Sea. 

Foreign Minister Vivian Balakrishnan in Parliament and other political leaders have eloquently elucidated why Singapore will not compromise on its firm stand that transit passage is an international right that cannot be negotiated.

AT WHAT PRICE VICTORY?

Iran and the US hold irreconcilable differences: Iran’s nuclear programme is seen by Tehran as an indispensable guarantee of regime survival, but as an existential threat by Washington. Collecting tolls in the Strait of Hormuz is seen as a way to fund this. 

So even if the ceasefire does not break down entirely, conflict is inevitable unless one side backs down. 

The blockade could push Iran to a point of making more concessions about its nuclear programme. During the failed weekend negotiation, Iran had already been prepared to suspend its nuclear activity for up to five years, in a counterproposal to the 20 years sought by the US. Iran's Foreign Minister Seyed Abbas Araghchi in an X post on Monday, before the blockade started, said that Tehran had been “just inches away” from an agreement with the US.

A Reuters report since then suggests that US and Iran could resume peace talks this week.

Militarily, the US could probably maintain the blockade for a long time, but it cannot do so politically, given the mounting domestic opposition to the war and the approach of the mid-term elections.

What have both sides achieved? For Iran, a pyrrhic victory, it still stands – but in ruins, its economy devastated. For America, it has successfully halted Iran’s nuclear and regional ambitions by a decade or more, but it has not achieved the strategic result of neutralising Iran permanently. It effected leadership change, but possibly to a more radical regime infused with fresh hatred and notions of revenge. 

Nearly seven weeks since the first US-Israeli strikes hit Iran, it is still too soon to declare “victory” or “defeat” for either side. The final chapters of this war are still being written. Meanwhile, the US blockade appears to have forced Iran back to the table with a weakened position – but expect that negotiations and conflict will exist side by side.

Lawrence Anderson is a former Singapore diplomat and Senior Fellow at the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

SYDNEY: The successful Artemis II trip around the Moon was a historic achievement – the first crewed lunar fly-by in more than 50 years, and the greatest distance yet travelled by humans from our “pale blue dot”.

The mission was marked by engineering, scientific and technical feats, by the astronauts and team at NASA and beyond, who got the crew there and back safely.

With the technical achievement came symbolic firsts, too. The first woman and the first person of colour to orbit the Moon. As astronaut Victor Glover put it: “People need to be able to see themselves in the things that they dream about.”

Artemis II deserves celebration. But the celebration should not crowd out political scrutiny.

POWER AND RESOURCES ON THE MOON

Artemis II is one mission in a broader US programme to start establishing a permanent moon base by 2030.

This is about more than exploration. As United States President Donald Trump has said, it is about asserting “American space superiority”, establishing a “sustained American presence” and developing a lunar economy. The US colonial thinking of a “manifest destiny to the stars” returns.

The bigger picture is that the US sees itself in a “space race” with what NASA Administrator Jared Isaacman has called its “geopolitical adversary” China.

One point of conflict is access to finite, valuable resources at the lunar south pole, where water ice could sustain life and provide rocket fuel for missions to Mars. More speculative, profit-driven visions also play a part, from mining helium-3 to extracting resources from asteroids and bringing them to Earth.

GLOBAL RULES – BEYOND THE GLOBE

International space treaties, largely forged during the 20th-century Cold War, have little to say about appropriating resources off-Earth.

The US wants to shape the rules, and the US-led Artemis Accords are part of that effort. They are non-binding principles, but consequential.

Grounded in the Outer Space Treaty of 1967, they offer a “blueprint” for how resource activities, and other unsettled topics, may be governed.

Many observers see the Artemis Accords as more transparent and open than China’s counterpart, the International Lunar Research Station. However, critics argue the Artemis Accords undermine multilateral, consensus-based processes.

Sixty-one countries have signed the Artemis Accords. Only nine new signatories have joined since Trump’s return as US president, versus 19 in the year prior. It remains to be seen if the trend continues.

WHY US LEADERSHIP IN SPACE DEMANDS SCRUTINY

US leadership in space is often discussed only in contrast to China. This binary view can help the US escape scrutiny, especially in allied nations.

Consider America’s recent actions here on Earth. As Artemis II drew our gaze skyward, the US–Israel war on Iran was intensifying.

In an expletive-filled post on Truth Social, Trump hinted at a nuclear attack with a threat that “a whole civilisation will die tonight” unless Tehran reopened the Strait of Hormuz.

The US also threatened to target civilian infrastructure, after one strike hit a school, reportedly killing more than 150 people.

All of this occurred amid the ongoing crisis and civilian casualties in Gaza, where Trump’s “Board of Peace” has faced criticism for seeking to function as an alternative United Nations.

Trump has also revived territorial ambitions toward autonomous Danish territory, Greenland, saying: “We need it”. He floated annexing Canada as the 51st US state. He spoke of the “honour of taking Cuba”. He declared he would “run” Venezuela.

All of these places have natural resources that would give the US strategic advantages, including in critical minerals and oil.

This conduct has raised concerns from international lawyers and international organisations. Even US allies have spoken up, whom Trump criticised for not joining the Iran war.

HARD QUESTIONS ABOUT A US-LED FUTURE IN SPACE

A disregard for international law on Earth leads us to question how the US will ultimately act in space.

Scholars from the Global South, notably law professor Antony Anghie, have long argued that the US uses international law selectively and in line with its own interests. This is not new with Trump, even if the pattern has now become more visible and more intense. 

What may be changing is that more of the world is taking notice, including states that once benefited from that status quo.

At the World Economic Forum in Davos this year, Canadian Prime Minister Mark Carney described the “rules-based order” as “partially false”, in which “international law applied with varying rigour depending on the identity of the accused or the victim”. He was not speaking about space – but his point applies here too.

This puts question marks over US leadership in space – and whether it will abide by agreed rules when control over lunar resources is no longer just a hypothetical question. Even America’s own Artemis Accords principles may prove optional if they stop being convenient to US interests.

That question is worth considering, given Trump has already justified withdrawing from many international instruments and organisations for this reason. Even the North Atlantic Treaty Organization (NATO) may be next.

No superpower should be immune from scrutiny – on Earth or beyond.

Art Cotterell is Postdoctoral Fellow at the Faculty of Law & Justice, UNSW Sydney. This commentary first appeared on The Conversation.

NEW DELHI: Indian Prime Minister Narendra Modi said Tuesday (Apr 14) that US President Donald Trump had called him to discuss the Middle East war - and the importance of the Strait of Hormuz.

Modi said it was a "useful exchange of views", adding that India "supports de-escalation and restoration of peace at the earliest", he wrote on social media.

Maritime traffic through the Gulf chokepoint - which normally carries a fifth of the world's seaborne crude - has come to a virtual standstill since US-Israeli strikes on Iran last month, triggering a regional conflict that has rattled global energy supply chains.

"Ensuring that the Strait of Hormuz remains open, secure and accessible is essential for the whole world," Modi said.

US Ambassador Sergio Gor also said on social media that the leaders had discussed the war, "including the importance of keeping the Strait of Hormuz open".

India is the world's second-largest buyer of liquefied petroleum gas (LPG), which is used for cooking and predominantly sourced from the Middle East - and supplies through the Strait of Hormuz have been strangled by the conflict. 

Modi has urged states to curb black marketing and avoid panic, stressing that India's energy supplies remain stable.

Modi has close ties to Israeli counterpart Benjamin Netanyahu, but New Delhi has sought to be neutral in the war.

JUSTICE FOR "GOD"

ADDICTION STRUGGLES

WAITING FOR CLAIRTY

SCHOOL SAFETY

NEW YORK: Stock markets climbed and oil prices tumbled Tuesday (Apr 14) on rekindled hopes for a deal to end the Middle East war and reopen the Strait of Hormuz.

Wall Street's main indices climbed, with both the S&P 500 and the Nasdaq now back at levels from before the US and Israel began bombing Iran on Feb 28.

European equity markets also rose, although London advanced only 0.3 per cent as the retreat in oil prices from US$100 a barrel weighed on the shares of energy majors BP and Shell.

Asia's leading stock markets closed with sizeable gains, while the dollar, seen as a haven in times of market turmoil, dropped against its main rivals.

Investors greeted US-mediated talks in Washington that set a plan for direct negotiations between Israel and Lebanon. 

The United States is pressing for a halt to the conflict between Israel and Hezbollah, fearing it could derail the two-week ceasefire in Washington's war with Iran after talks with Tehran in Pakistan failed to achieve a breakthrough.

The progress on Lebanon-Israel helped US equities extend Monday's rise after US President Donald Trump said he had been contacted by Iran officials eager for a deal.

Investors are "pricing in victory," said analyst David Morrison at Trade Nation.

He said many believe the end of the conflict with Iran is a question of days, weeks or months rather than years.

"Nobody wants to be under-exposed to risk assets, let alone be short, should the war suddenly conclude, or even if the Strait of Hormuz was unblocked," Morrison said.

But Tom Cahill, chief investment officer at Ventura Wealth Management, said the market is "overreacting" in rising so much.

"There are still a lot of question marks as to whether a true agreement is to be had between the United States and Iran," said Cahill, who also worries that companies will cite the war as a factor in lowering their earnings forecasts.

Surging oil prices are weighing on demand.

The International Energy Agency warned that demand for crude in the second quarter this year would likely see the biggest slump since the Covid pandemic slammed the global economy in 2020.

Surging prices will force many countries and industries to curb oil use, and "demand destruction will spread as scarcity and higher prices persist," the agency said in its monthly report.

Large banks JPMorgan Chase, Citigroup and Wells Fargo all reported higher quarterly profits, pointing to continued resilience among US consumers despite increased geopolitical uncertainty.

But of the three large US lenders, only Citigroup pushed higher.

French luxury conglomerate LVMH reported Monday that sales fell six percent in the first three months of the year, saying the war in the Middle East depressed business in the region.

Its shares spent most of the day in the red, but finished the day with a small gain.

JERUSALEM: Israeli and Lebanese envoys will meet in Washington on Tuesday (Apr 14) as Israel presses its war on Hezbollah, a diplomatic milestone overshadowed by conflicting agendas with Israel ruling out a ceasefire and demanding that Beirut disarm the Iran-backed group.

The meeting comes at a critical juncture in the crisis in the Middle East, a week into a fragile ceasefire between the United States, Israel and Iran. 

The parallel war between Israel and Hezbollah in Lebanon has been a complicating factor in Pakistan's mediation to end the wider conflict.

US Secretary of State Marco Rubio is set to attend the meeting between Israeli ambassador to the US, Yechiel Leiter, and his Lebanese counterpart, Nada Hamadeh Moawad, at 11am (11pm, Singapore time), a State Department official said.

It marks a rare encounter between representatives of governments that have remained technically in a state of war since Israel was established in 1948.

LEBANON SEEKS CEASEFIRE

The government led by President Joseph Aoun and Prime Minister Nawaf Salam has called for negotiations with Israel despite objections from Hezbollah, reflecting worsening tensions between the Shi'ite Muslim group and its opponents.

Hezbollah opened fire in support of Tehran on Mar 2, sparking an Israeli offensive that has killed more than 2,000 people and forced 1.2 million from their homes, according to Lebanese authorities.

In Lebanon, the dead include 252 women and 166 children, the health ministry says. 

Sources familiar with the matter said on Mar 27 that more than 400 Hezbollah fighters have been killed. Hezbollah attacks have killed 13 Israeli soldiers and two Israeli civilians since Mar 2, Israel says. 

Lebanese officials have said Moawad only has authority to discuss a ceasefire in Tuesday's meeting.

But Israeli government spokesperson Shosh Bedrosian said Israel would not discuss a ceasefire.

"What we're looking for ... is to see that Lebanon is committed to disarming Hezbollah ... demilitarising southern Lebanon as well, and also to have a peace agreement," she said on Monday.

The Lebanese state has been seeking to disarm Hezbollah peacefully since a war between the militia and Israel in 2024. 

Any move by Lebanon to disarm itself by force risks igniting conflict in a country shattered by civil war from 1975 to 1990. 

Moves against Hezbollah by a Western-backed government in 2008 prompted a short civil war.

The current government banned Hezbollah's military wing after it opened fire on Israel last month.

ISRAEL AT WAR WITH HEZBOLLAH, NOT LEBANON

Israel and ‌the US have ⁠said the campaign against Hezbollah was not part of the Iran-US ceasefire, though Pakistan's prime minister had said the truce would include Lebanon, as Iran had demanded.

While Israel has pressed attacks in Lebanon, it has launched no airstrikes in Beirut since last Wednesday, when it pounded the capital in a 10-minute barrage that killed hundreds of people across Lebanon.

The following day, US President Donald Trump, in an interview with NBC News, said Israeli Prime Minister Benjamin Netanyahu had told him he would "low-key it" in Lebanon.

A US State Department official said that Israel was at war with Hezbollah, not Lebanon, and so there was no reason they should not talk, describing the talks as direct, high-level and the first of their kind since 1993.

The conversation would "scope the ongoing dialogue about how to ensure the long-term security of Israel's northern border and to support the government of Lebanon's determination to reclaim full sovereignty over its territory and political life".

Hezbollah leader Naim Qassem on Monday called on the government to cancel the meeting, saying Hezbollah would continue to confront Israeli attacks on Lebanon.

WASHINGTON: The International Monetary Fund cut its growth outlook on Tuesday (Apr 14) due to Iran war-driven energy price spikes and supply disruptions and warned that the global economy would teeter on the brink of recession if the conflict worsens and oil stays above US$100 per barrel through 2027.

With massive uncertainty over the Middle East conflict gripping finance officials gathering for IMF and World Bank spring meetings in Washington, the IMF presented three growth scenarios: weaker, worse and severe, depending on how the war unfolds.

The World Economic Outlook's most optimistic "reference scenario" assumes a short-lived Iran war and forecasts 3.1 per cent real GDP growth for 2026, down 0.2 percentage point from its previous forecast in January. Under this scenario, oil prices average US$82 per barrel for all of 2026, a decline from recent levels of around US$100 for the Brent benchmark futures price.

Without the violence in the Middle East, the IMF said it would have upgraded its growth outlook by 0.1 percentage point to 3.4 per cent, due to a continued technology investment boom, lower interest rates, less-severe US tariffs and fiscal support in some countries.

But the war has created a far bigger risk to the global economy than President Donald Trump's initial wave of steep tariffs did a year ago, IMF chief economist Pierre-Olivier Gourinchas told Reuters in an interview.

"What's happening in the Gulf is potentially much, much larger, and that's what our scenarios are kind of documenting," he said.

Under an "adverse scenario" of a longer conflict that keeps oil prices around US$100 per barrel this year and US$75 in 2027, the IMF predicts global GDP growth would fall to 2.5 per cent this year. The IMF in January had forecast that oil would decline to about US$62 in 2026.

And the IMF's worst-case "severe scenario" assumes an extended and deepening conflict and much higher oil prices that prompt major financial market dislocations and tighter financial conditions, slashing global growth to 2.0 per cent.

"This would mean a close call for a global recession," the IMF said, adding that growth has been below that level only four times since 1980 - with the last two severe recessions in 2009, following the financial crisis, and in 2020 as the COVID-19 pandemic raged.

INFLATION PRESSURES

Gourinchas said that a number of countries would be in outright recessions under this scenario, with oil prices averaging US$110 per barrel in 2026 and US$125 in 2027. Prices at this level for an extended time would also increase expectations "that inflation is here to stay," prompting wider price increases and wage hike demands.

"That change in inflation expectations is going to require central banks to step on the brakes and try to bring inflation back down," he said, adding that this may require more pain than in 2022.

The IMF said, however, that central banks may be able to "look through" a short-lived energy price surge and hold rates steady amid weaker activity, which would be a de facto monetary easing, but only if inflation expectations remain anchored.

Global inflation for 2026 would top 6 per cent in the severe scenario, compared to 4.4 per cent in the most optimistic reference scenario, which is the assumption for the IMF's country and regional growth forecasts.

MAJOR ECONOMY OUTLOOKS

The IMF shaved its US growth outlook for this year to 2.3 per cent, down just a tenth of a percentage point from January, reflecting the positive effect of tax cuts, the lagged effect of interest rate cuts and continued AI data centre investment partly offsetting the higher energy costs. These effects are expected to continue in 2027, with growth now forecast at 2.1 per cent, up a tenth of a point from January.

The euro zone, still struggling with higher energy prices caused by Russia's 2022 invasion of Ukraine, takes a bigger hit from the Middle East conflict, with its growth outlook falling 0.2 percentage points in both years to 1.1 per cent in 2026 and 1.2 per cent for 2027.

Japan's growth is largely unchanged under the most benign scenario at a weak 0.7 per cent for 2026 and 0.6 per cent for 2027, but the IMF said that it expects the Bank of Japan to hike rates at a slightly faster pace than anticipated six months ago.

The IMF forecast China's growth for 2026 at 4.4 per cent, down a tenth of a point from January as the higher energy and commodity costs are partly offset by lower US tariff rates and government stimulus measures. But the IMF said headwinds from a depressed housing sector, a declining labour force, lower returns on investment and slower productivity growth will cut China's 2027 growth to 4.0 per cent, a forecast unchanged from January.

EMERGING MARKETS, MIDDLE EAST HIT HARD

Overall, emerging market and developing economies, where GDP tends to be more dependent on oil inputs, take a bigger hit from the Middle East conflict than advanced economies, with 2026 growth seen falling 0.3 percentage points to 3.9 per cent.

Nowhere is this more pronounced than at the epicentre of the conflict in the Middle East and Central Asia region, which will see its 2026 GDP growth fall by two full percentage points to 1.9 per cent amid widespread infrastructure damage and sharply curtailed energy and commodity exports.

GDP declines for 2026 are forecast at 6.1 per cent for Iran, 8.6 per cent for Qatar, 6.8 per cent for Iraq, 0.6 per cent for Kuwait and 0.5 per cent for Bahrain.

But under the assumption of a short-lived conflict, the region bounces back quickly, with 2027 GDP growth rebounding to 4.6 per cent, a jump of 0.6 percentage point from the January forecasts.

The one bright spot amid emerging markets is India, which saw growth upgrades of about a tenth of a percentage point to 6.5 per cent for both 2026 and 2027, due in part to momentum from strong growth at the end last year and a deal to lower the US tariff rate on Indian imports.

FUEL COST FISCAL SUPPORT

The IMF said that governments will be tempted to implement fiscal measures to ease the pain of higher energy prices, including price caps, fuel subsidies or tax cuts, but cautioned against these urges amid still-elevated budget deficits and rising public debt.

Gourinchas said it was "perfectly legitimate" to want to protect the most vulnerable, but subsidies in one country could lead to fuel shortages in others that can't afford them.

"You have to do it in a very targeted, very temporary way that doesn't really mess up the fiscal framework" needed by most countries to rebuild their fiscal buffers, he said.

LONDON:  Air travel's worst crisis in years lurched deeper on Tuesday (Apr 14) as Qantas Airways warned of spiralling costs, Lufthansa said it may have to ground planes, and Virgin Atlantic flagged a looming supply crunch, with the Iran conflict squeezing fuel supplies.

The war has upended routes between Asia and Europe that relied on Gulf hubs, while a doubling of jet fuel prices and tightening of supplies are hitting airlines hard. Since the US-Israeli strikes on Iran began on Feb 28, carriers have hiked air fares, introduced fuel surcharges and cut routes.

Underscoring efforts to preserve cash, Qantas has delayed a planned share buyback, citing higher and volatile fuel prices, one of the first major carriers to stall shareholder returns.

Meanwhile, Lufthansa CEO Carsten Spohr warned that jet fuel supplies will remain constrained, driving up costs.

"Kerosene will remain in short supply and therefore more expensive for the rest of the year," Spohr told German newspaper Frankfurter Allgemeine Zeitung.

Lufthansa has not yet grounded planes due to shortages but this "may be unavoidable" as kerosene availability is already critical at some airports, particularly in Asia, he said.

In South Korea, low-cost carrier T'way Air plans to furlough some cabin crew without pay in May and June, a local report said, among the first carriers to reduce staffing.

A two-week ceasefire has provided little relief with the Strait of Hormuz still shut, removing roughly a fifth of global oil and liquefied natural gas supplies from the market and refineries will take time to repair damage inflicted on them.

"Despite the pause in the conflict we remain concerned about jet kerosene supply and price increase," UBS analyst Jarrod Castle said in a note on Tuesday, adding that December jet kerosene futures prices are still up more than 50 per cent year-on-year.

Fuel, typically airlines' second-largest cost after labour, accounts for about 27 per cent of operating expenses. Prices have more than doubled since the conflict began, far outpacing a roughly 50 per cent rise in crude prices before the ceasefire.

The turmoil may spur consolidation, with stronger airlines gaining share from weaker rivals, analysts and executives said.

Reuters reported on Monday that United Airlines CEO Scott Kirby pitched the potential for merging with American Airlines days before the US-Israeli strikes on Iran.

EU AIRLINES URGE BRUSSELS TO STEP IN

Flight capacity, in particular from the Middle East but also into Europe, has shrunk and is not projected to recover to pre-conflict levels anytime soon, analysts said.

Virgin Atlantic CEO Corneel Koster said in an interview with the Financial Times that the airline has about six weeks of secure jet fuel supplies before the outlook gets more uncertain.

European airlines on Tuesday urged Brussels to step in with emergency measures to cushion the impact, including EU-level kerosene purchasing, a temporary suspension of the bloc's carbon market for aviation and scrapping certain aviation taxes.

Industry group Airports Council International Europe (ACI) warned last week that Europe could face a systemic jet fuel shortage ​in three weeks.

Several carriers, including SAS, are not hedged, leaving them fully exposed to soaring fuel costs. Delta Air Lines last week said its jet fuel bill this quarter would be some US$2 billion more than last year.

While Qantas has hedged much of its crude exposure, it remains significantly exposed to the spike in jet fuel spreads.

To offset rising costs, the Australian flag carrier is raising fares and shifting capacity toward stronger routes such as Europe, where demand remains firm, while trimming domestic capacity by about 5 percentage points in the June quarter.

Lufthansa's Spohr said record revenues on Asian routes were also helping offset the impact of rising kerosene costs.

But the airline has prepared contingency plans, including cutting its capacity by 2.5 per cent or 5 per cent and grounding 20 to 40 older, less fuel-efficient aircraft earmarked for early retirement.