Global industries squeezed as Iran war enters third month

The FT News Briefing explores the widening global economic fallout from the ongoing U.S.-Israeli war on Iran, now in its third month. The closure of the Strait of Hormuz—critical for global oil transit—has triggered a commodity shock, driving jet fuel prices to double and forcing airlines to slash flights. U.S. automakers face a $5 billion hit due to supply chain disruptions affecting aluminum, plastics, and paint, while fertilizer prices have also doubled, with Emirati Fertiglobe shifting to trucking cargo. Despite OPEC-plus increasing June production, no plans exist to reopen the strait, and U.S. oil majors like ExxonMobil and Chevron are refusing to ramp up output, citing capital discipline and operational complexity. Experts warn that even if U.S. shale production increases, it cannot offset the Middle East supply shortfall, and strategic reserves are nearing exhaustion, raising fears of a 'June tipping point' for energy shortages. Meanwhile, in the UK, Labour faces potential historic losses in local elections amid a political crisis fueled by Prime Minister Keir Starmer’s appointment of Peter Mandelson—linked to Jeffrey Epstein—alongside public frustration over the cost of living, NHS strain, and foreign policy on Gaza. Third parties like Reform and the Greens are gaining ground by capitalizing on migration and pro-Palestinian sentiment, signaling a fracture in the traditional two-party system. In contrast, the dairy sector is experiencing a rare surplus, with butter prices at five-year lows due to overproduction from high feed costs, highlighting the uneven impact of global shocks.