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The US-Iran conflict, now in its fifth week, has escalated into a war of attrition with no clear strategy or end in sight. The US continues to hit Iranian targets while building up forces in the region, while Iran launches missile and drone attacks on Israel and neighboring Gulf states.The conflict has significant economic implications, with Iran's closure of the Strait of Hormuz causing oil prices to surge and disrupting global supply chains. The pain is likely to get worse, with shortages already felt across the world, from Asian factories to European diesel markets.The war should never have been started, with the threat not imminent, objectives unclear, and justification falling apart under scrutiny. Responsibility rests with Donald Trump and Israel's Benjamin Netanyahu. The delusion that force can impose a more compliant regime in Tehran has predictably given rise to a conflict that sustains itself.The only plausible exit is negotiation without preconditions. However, Mr. Trump mixes threats of escalation and claims that negotiations are progressing, with little evidence of a meaningful diplomatic track. The conflict cannot be separated from Gaza, where Mr. Netanyahu is gambling that war with Iran will restore his standing.If US ground forces are committed, the dynamic shifts, and American casualties will harden resolve among those who backed the intervention, making withdrawal politically harder. World powers can shift the incentives away from a US ground war by working together to insulate themselves from economic pain and coordinate diplomatic messaging.

The International Monetary Fund (IMF) has issued a stark warning that the ongoing conflict in the Middle East will lead to higher prices and slower global growth, affecting countries worldwide. The Washington-based organisation emphasised that a rise in energy and food costs will harm economic growth this year and could leave lasting scars on the global economy.The IMF's analysis, published in a blogpost by its main department heads, including chief economist Pierre-Olivier Gourinchas, noted that governments with high levels of borrowing will have limited access to funds to cushion the worst effects of the crisis. The organisation warned that all roads lead to higher prices and slower growth should the conflict continue to disrupt the supply of oil, gas, and fertiliser from the Gulf.While some countries, such as the US, may gain from higher fossil fuel prices as net exporters of oil and gas, the rise in bills for petrol, diesel, and food will harm living standards. Businesses are also forecast to come under pressure to raise prices, possibly forcing central banks to raise interest rates to combat inflation.The IMF highlighted that about a third of fertiliser production travels through the strait of Hormuz, which could push up prices. The UN Food and Agriculture Organisation projects that global prices could average 15% to 20% higher in the first half of 2026 if the crisis persists. Natural gas prices have more than doubled in the UK since last December to about £140 a therm, while a barrel of Brent crude that cost about $60 before the conflict hit more than $116 on Monday before falling back to $112.The IMF added that forecasts for sharp rises in the cost of gas and electricity in Europe next winter are forcing governments to consider higher subsidies and welfare payments to the worst-affected households. The organisation noted that countries such as Italy and the UK are especially exposed by their reliance on gas-fired power, while France and Spain are relatively protected by their greater nuclear and renewables capacity.

The UK government is considering plans to provide financial support to households hardest hit by the looming energy crisis, with a focus on targeting those who need it most. Energy bills are forecast to hit nearly £2,000 a year from July, prompting concerns about the impact on low-income households.Under one plan, extra cash could be injected into the crisis and resilience fund (CRF), a £1bn a year council-run scheme in England that provides preventative support to communities and assists people facing financial crises. The fund could be topped up to help cushion households identified by councils as facing particular hardship from higher energy bills.Chancellor Rachel Reeves has ruled out universal support and is under pressure from financial markets to limit the extent of the support to keep within budget spending limits. However, she has emphasized the need for targeted support, saying: "The progressive, universal approach that we are taking is the right one … £150 off everyone’s energy bills, but then targeted support for those who need it most."The government is also exploring other options, including expanding support to households that have high bills but do not currently qualify for benefits. This could involve allowing councils to dispense funds to households in need.Rising energy costs have been driven by the conflict in the Middle East, with Brent crude oil prices surging to over $116 a barrel. The global oil benchmark is on course for a record monthly rise of nearly 60%, exceeding gains made during the 1990 Gulf war.The UK's interest rate on 10-year debt has also hit its highest level since the 2008 financial crisis, just over 5%, although rates eased to 4.95% by Monday. Government borrowing costs around the world have climbed since the US and Israel attacked Iran, as financial markets calculate that governments will be urged to borrow more heavily to cope with the war's aftershocks.

Ukrainian President Volodymyr Zelenskyy has arrived in Jordan as part of his tour to strengthen defence ties in the Gulf region, amid the ongoing conflict with Russia. Security is the top priority, and it is crucial that all partners make necessary efforts toward it, Zelenskyy emphasized.Zelenskyy's visit comes after Ukraine has agreed to cooperate on defence with Qatar, Saudi Arabia, and the United Arab Emirates. Kyiv's anti-drone experts have also been deployed to these countries as Iran targets infrastructure there using drones that Russia has also used during its war with Ukraine.The Ukrainian president has been seeking support from the Gulf states as the Russia-Ukraine war continues, with no end in sight. More than four years since Russia launched a full-scale invasion, Kyiv is struggling to cover its budget deficit and fund domestic weapons production.Ukraine has intensified retaliatory attacks on Russian infrastructure, including refineries, oil depots, and ports, arguing that they were justified targets to sever revenues funding Russia's offensive. A drone strike triggered a fire at Russia's Baltic port of Ust-Luga, which was hit for the second time in several days.According to the Russian regional governor, Alexander Drozdenko, damage was sustained at the port, the fire is now under control, and there were no casualties from the attack. He added that 36 drones were destroyed overnight in the region.

The Houthis, an Iranian-backed group in Yemen, have recently launched missile and drone attacks on Israel, marking a significant escalation in the ongoing conflict. This move has analysts warning of a potential new front in the war, particularly with the group's ability to block the Bab al-Mandeb strait, a crucial passage for global commodities trade.The strait, situated between Yemen and the Horn of Africa, connects the Red Sea to the Gulf of Aden and is a key route for 10% of global trade, including a significant share of oil and gas shipments. Blocking this strait could have severe implications for the global economy, potentially disrupting trade and leading to increased inflation.Brigadier-General Yahya Saree, a military spokesperson for the Houthis, announced the group's first attack on Israel, followed by a second military operation using cruise missiles and drones. The Houthis have warned they will continue military operations until Israel ceases its aggression.The group's actions are seen as a significant development in the conflict, with Iran likely to welcome the Houthis' involvement. However, the extent of their participation remains uncertain, with some analysts describing their actions as token participation rather than full engagement.If the Houthis were to block the Bab al-Mandeb strait, it would create a nightmare scenario for global trade, particularly for Europe. This move, combined with potential restrictions on the Strait of Hormuz, could cripple trade and have far-reaching economic consequences.Analysts suggest that the Houthis' current posture reflects a deliberate calculation rather than restraint born of weakness. Their decision to target Israel directly, rather than escalating in the Red Sea, indicates a strategic approach aligned with Tehran's broader strategy.For now, the Houthis' threat to block the Bab al-Mandeb strait remains a significant concern, with global trade and economies potentially hanging in the balance.

Top diplomats from Saudi Arabia, Egypt, and Turkey have gathered in Islamabad for two-day talks with their Pakistani counterpart on the escalating conflict between the US and Israel against Iran. The goal is to seek a de-escalation of the situation.The talks, led by Pakistani Foreign Minister Ishaq Dar, follow Iran's agreement to allow 20 more ships under the Pakistani flag to pass through the Strait of Hormuz, with two ships permitted daily. This development was announced by Dar on Saturday.Pakistan's Prime Minister Shehbaz Sharif had a detailed telephone conversation with Iranian President Masoud Pezeshkian on Saturday, lasting over an hour, as part of preparations for the Islamabad talks. Sharif emphasized Pakistan's commitment to bringing an end to the conflict.Al Jazeera's Kamal Kyder, reporting from Islamabad, noted that Pakistan has been acting as a key interlocutor between the US and Iran, facilitating communication between the two sides as part of mediation efforts. He described the gathering in Islamabad as the beginning of a critical process that hinges on diplomacy and dialogue.The talks in Islamabad are seen as a crucial step towards finding a peaceful resolution to the conflict. Iran's President Pezeshkian has thanked Pakistan for its mediation efforts to stop the aggression against Iran. With Islamabad's longstanding links with Tehran and close contacts in the Gulf, Pakistan is well-positioned to play a key role in these diplomatic efforts.Meanwhile, the risk of an expanded Iran war increased on Saturday as Yemen's Iran-aligned Houthi rebels launched their first attacks on Israel since the start of the conflict. The developments underscore the complexity and volatility of the situation in the Middle East.

The Pentagon is gearing up for weeks of limited ground operations in Iran, potentially including raids on Kharg Island and coastal sites near the Strait of Hormuz, according to US officials. These plans, which fall short of a full invasion, may involve special operations and conventional infantry troops.The operations would expose US personnel to Iranian drones and missiles, ground fire, and improvised explosives. The plans have been discussed within the administration over the past month, with objectives under consideration including the seizure of Kharg Island, a key Iranian oil export hub in the Gulf.According to officials, the objectives would likely take weeks, not months to complete. The Pentagon has not responded to requests for comment, and Iran has yet to respond to the report.The developments come as Pakistan mediates between Washington and Tehran, hosting talks with the foreign ministers of Saudi Arabia, Turkey, and Egypt. Iranian parliament speaker Mohammad Bagher Ghalibaf warned that Iran is prepared to respond to any ground attack, stating that the enemy's plans for a ground attack are being met with readiness from Iranian forces.Iran's navy chief, Shahram Irani, also warned that the USS Abraham Lincoln aircraft carrier would be targeted if it comes within range. The situation remains tense, with Iran posing a credible threat in the Bab al-Mandeb Strait, which lies between Yemen and Djibouti.

The US-Israel war on Iran has entered its 30th day, with diplomatic efforts intensifying to bring an end to the conflict. Foreign ministers from Pakistan, Turkiye, Egypt, and Saudi Arabia are scheduled to hold talks in Islamabad, aimed at de-escalating the situation.The conflict has escalated across the Middle East, with Yemen's Houthis joining the war by firing missiles at Israel on Saturday. Tehran has threatened retaliatory attacks on Israeli and US universities in the region after the United States and Israel bombed Iranian universities.US-Israeli strikes have continued, with powerful explosions rocking Tehran on Sunday morning, killing two people and wounding five in a residential area. The Iranian Fars news agency reported that US-Israeli attacks also hit the Saadat Abad neighbourhood of northern Tehran and another residential area in the west of the capital.In the Gulf, Saudi Arabia intercepted and destroyed 10 drones in the early hours of Sunday, while the UAE Ministry of Defence said its air defences responded to missiles and drone threats. Emirates Global Aluminium reported that an Iranian attack on Saturday inflicted significant damage on one of its sites in Abu Dhabi and wounded six employees.Iran's power has been underestimated, according to Al Jazeera's Mohamed Vall, reporting from Tehran. He said that one month into the war, Iran has proved that its power was underestimated by the enemy, who thought that the war would be a short excursion and that the country would capitulate after just a few days of bombardment.The conflict has also led to protests in Lebanon, with protesters taking to the streets in Beirut after Israeli forces killed journalists Fatima Ftouni and her brother and colleague, Mohammed, of Al Mayadeen, as well as Al-Manar's Ali Shuaib on Saturday.In Israel, people took to the streets in Tel Aviv, rallying against the war and increased settler violence, as they clashed with police. The Israeli military announced the death of a soldier, Moshe Yitzhak HaCohen Katz, in southern Lebanon as Hezbollah's attacks on northern Israel continue.The US Central Command (CENTCOM) said some 3,500 additional soldiers arrived in the Middle East on board the USS Tripoli. The Washington Post reported that the Pentagon is preparing for weeks of ground operations in Iran, although Al Jazeera could not independently verify the report.

Pakistan's capital, Islamabad, has become a hub for diplomatic activity as key regional powers converge to address the escalating conflict between the US and Iran. Egyptian Foreign Minister Badr Abdelatty, Turkish Foreign Minister Hakan Fidan, and Saudi Foreign Minister Faisal bin Farhan Al Saud have arrived for talks with Pakistani Deputy Prime Minister Ishaq Dar. The meetings aim to bring an end to the US-Israeli war on Iran, which has entered its 30th day and caused a global energy crisis. The conflict has led to a significant increase in tensions in the Middle East, with 20 percent of the world's oil and gas supplies passing through the Strait of Hormuz, which has been choked by Iran. Pakistan is walking a diplomatic tightrope, with close defense ties to Saudi Arabia and cultural ties to Iran. The country is also home to the second-largest Shia population in the world after Iran. Analysts describe Pakistan's role as a 'very delicate balancing act' as it tries to bring the Americans and Iranians back to the negotiating table. The diplomatic push is driven by severe economic fears, with millions of Pakistani citizens potentially losing their jobs in the Gulf region if the conflict spreads. The stakes are existential for Islamabad, which risks a major crisis if energy supplies decline. Experts point out that the enormous economic costs borne by the Gulf countries have dropped drastically due to the closure of the Strait of Hormuz. Iranian drone and missile attacks have targeted energy and industrial facilities, forcing petroleum companies to declare force majeure on supply contracts. The Islamabad gathering serves as a foundational step for an 'Islamic alliance' designed to counter the Israeli project in the region, address geopolitical vacuums, and mitigate uncertainties surrounding future US involvement.