#middle-east-conflict

#middle-east-conflict

Economic issues are expected to dominate the face-to-face talks, including discussions on trade imbalances, transactions, and investments; Trump and Xi will most likely address the thorny issue of the war in the Middle East; and Trump already said on Monday that he also plans to broach what may be China's most existential issue Taiwan raising some alarm on the self-governed island that Beijing considers an inalienable part of its territory.

The Pentagon has released a new price tag for the US-Israel war with Iran, saying it has cost the United States $29bn. The department's comptroller revealed the new total during a Senate committee hearing on Tuesday alongside Pentagon chief Pete Hegseth. The estimate is an increase from the $25bn the official, Jules Hurst, reported to members of Congress in late April, the first time the administration of US President Donald Trump had given an official figure.

The Red Sea cuts spurred companies and governments to look for alternate routes, and the Strait of Hormuz seemed promising. Then the US and Israel attacked Iran, cable projects were halted, and now the world is looking elsewhere once again.

On 4 November, a student demonstration outside the US embassy in Tehran erupted into an all-out assault on the compound, and 66 Americans were taken hostage. It was the culmination of decades of tension, beginning with the US and Britain's role in installing the Shah of Iran to safeguard energy interests, and ending with a popular uprising that toppled his oppressive regime and drove him into exile.

Households cut back on their spending in April at the fastest pace in 18 months, as the conflict in the Middle East provoked fears of another cost of living crisis, a report from one of the UK's biggest banks has suggested. Barclays, which processes nearly 40% of the UK's credit and debit card transactions, said its data showed there had been a 0.1% fall in card spending last month compared with a year earlier. This was the first year-on-year fall since November 2024.

Heathrow's passenger numbers dipped by 5.3% last month, with the airport's chief executive citing the conflict in the Middle East as the main reason. The west London airport said about 6.7 million passengers travelled through Heathrow in April, compared with 7.1 million during the same month last year. Heathrow said the decline reflected "the ongoing impact of the Middle East conflict on some markets and shortterm adjustments to travel plans".

About 6.7 million people flew through the airport in April, a 5% drop compared with the same period last year. The fall reflected the impact from the Iran conflict and short-term adjustments to travel plans, the airport said. However, the number of transfer passengers transiting for onward flights rose 10% in April year-on-year, as travellers rerouting to Asia and Oceania switched to the Heathrow instead of using rival hubs in the Gulf such as Dubai and Doha.

The conflict in the Middle East itself might be teetering on a tentative ceasefire, but higher gasoline prices are likely here to stay. The average price for a gallon of regular gasoline on Friday was $4.54, according to AAA, up from around $3 before the war, and the most expensive gas has been since the Ukraine War's early days in mid-2022.

Shell reported record profits of $6.92bn, more than double the previous quarter and 24% higher than last year, due to soaring oil prices from the Iran conflict. This surge intensifies criticism of the oil sector amid rising energy costs for consumers and businesses.

Shell's chief executive, Wael Sawan, said the company's profits were gained through its relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets. The disruption to oil and gas flows through the strait of Hormuz caused the international crude price to climb from about $61 a barrel in January to highs of $119 at the end of March.

Two million airline seats have been cut from this month's schedules as airlines redraw their operations because of soaring jet fuel prices amid the Middle East conflict. About 13,000 fewer flights will operate in May around the world after recent cancellations, according to data from the aviation analytics company Cirium.

HSBC's profits fell 4% in the first three months of the year, dropping $100m to $9.4bn, compared with the same period in 2025. Revenue increased 6% to $18.6bn.

While Heathrow has temporarily absorbed demand from elsewhere, passenger numbers for the rest of the year are likely to be impacted whilst there is significant uncertainty in the Middle East.

"It is horrifying to see BP's profits grow as millions suffer the fallout from the U.S.-Israel war on Iran," Patrick Galey, head of investigations at campaigning outfit Global Witness, said in a statement responding to the company's results.

Wendy Sherman stated, 'It is critical that Israel remains an ally of the U.S. and we protect the right of a Jewish state. I also believe that Prime Minister [Benjamin Netanyahu] has led us down a road - and we have been part of it - that has, in essence, created a genocide in Gaza that has destabilized the Middle East.'