Much activity. Nothing resolved. This week produced a two-week ceasefire, a Brent crude plunge of 15% to below $94, a relief rally across equities, and talks in Islamabad. It also produced continued Israeli strikes in Lebanon, an Iranian threat to suspend the ceasefire, a Strait of Hormuz that remained effectively controlled rather than freely open, and a negotiating gap between Washington and Tehran that has not narrowed by a single concession. The world has a pause. It does not have a peace.
Three problems, not one: The ceasefire is being treated by markets as a resolution of the Iran problem. It is not. The Iran problem is three problems simultaneously: Terrorism, Nuclear, and Hormuz — each with its own logic, its own stakeholders, and its own timeline. A two-week ceasefire addresses none of them permanently. Iran's Supreme National Security Council described the ceasefire as an "enduring defeat" for Washington. Iran's own newspaper Kayhan declared nuclear disarmament impossible. Israel said the ceasefire does not include Lebanon and immediately launched its largest strikes on Beirut since the war began. A ceasefire in which one party considers itself the winner, another refuses to observe it, and the third's core demands remain unmet is not a ceasefire. It is an intermission.
Pakistan and China are managing this — not the West: The two-week truce was brokered by Pakistan's Prime Minister Shehbaz Sharif and military chief Asim Munir, with Turkey and Egypt in support. China provided the diplomatic architecture. The US accepted Iran's 10-point plan as "a workable basis for negotiation." Read that carefully — the United States, which began this war demanding unconditional surrender, is now negotiating from Iran's framework. The West's role in this process is to observe and hope. The terms being discussed in Islamabad are being shaped by Islamabad, Beijing, and Tehran. London and Brussels are not in the room.
The China guarantee — a new source of income for Iran: The deeper strategic shift this week is the one least discussed in Western media. If China emerges as the guarantor of any permanent settlement — and the evidence is that it is positioning itself to do exactly that — Iran acquires something it has never previously had: a great power backer willing to underwrite its economic reconstruction, absorb its oil exports, and shield it from future Western sanctions. Iran does not need to reintegrate into the Western financial system. It needs one large, reliable buyer. China is that buyer. A China-guaranteed Iran is structurally independent of Western leverage — permanently. For the West, this is not a diplomatic setback. It is a strategic defeat dressed in ceasefire language.
Ukraine and the Gulf — the alliance the West is not watching: While diplomatic attention is fixed on Islamabad, a quieter realignment is taking place in the Gulf. Ukraine has been supplying interceptor drone systems and counter-drone expertise to Gulf states — UAE, Qatar, Saudi Arabia, Kuwait — throughout the conflict. When that infrastructure is complete and operational, Gulf states will have a credible independent capability to protect their own shipping lanes without requiring US or British naval escorts. The implication is significant: the UK's Gulf alliances, built over decades on the foundation of British security guarantees, are quietly being supplemented by Ukrainian military technology. If the Gulf can reopen Hormuz without Western help, the strategic leverage that underpins those relationships weakens materially.
The Ukraine question — a new role in the Middle East: The most consequential unanswered question of the week is this: if America cannot or will not reopen the Strait of Hormuz, could Ukraine — with its weapons, its modern war-fighting skills, and its intimate knowledge of drone warfare at scale — provide the capabilities to do it instead? It is not as improbable as it sounds. Ukraine has demonstrated the ability to strike targets at long range with precision, to suppress drone swarms, and to operate in contested maritime environments. The Gulf states have the money. Ukraine has the technology. The US has the motive to see the Strait open without committing further forces. Watch this space.
Abroad while the world negotiates: Starmer spent the week overseas. In a week when Pakistan brokered a ceasefire, China shaped its terms, and Iran's Foreign Minister sought meetings in Berlin, Paris and London, the UK's contribution to the diplomatic record was largely administrative. The 35-nation summit produced nothing. The follow-on produced less. Britain is present at every table and influential at none.
Scotland forces Labour's hand on North Sea: The political pressure building in Scotland ahead of the Holyrood elections has produced the week's most revealing domestic development. Labour has granted new drilling licences for North Sea oil and gas fields — a direct reversal of the energy policy that Ed Miliband has staked his political identity on. The consensus is that it is too little, too late: the investment horizon for North Sea development means any meaningful production increase is years away, and the companies that might have drilled have largely redirected capital elsewhere. But the political signal is unmistakable. The unresolvable trinity — growth, net zero, and energy price reality — has claimed its first formal casualty. The net zero line has moved. It will move again.
The irony is not subtle: Britain has spent six weeks watching the world scramble for energy security while voluntarily sitting on recoverable reserves under the North Sea. The Iranian crisis made the argument that Miliband's opponents had been making for years — and made it more forcefully than any opposition politician could. The licence grants are an acknowledgement of that reality, however reluctantly framed.
UK markets — range-bound and waiting: Gilts have settled into a range. The ceasefire relief that pushed oil lower and briefly reopened the rate cut conversation has not yet translated into meaningful Gilt movement — yields are holding, spreads over Germany are virtually unchanged, and the market is correctly reading the ceasefire as a pause rather than a resolution. The institutional buyers identified in recent weeks are still present at the belly of the curve. The entry point thesis remains intact. The catalyst has simply not arrived yet.
Risk on — then off — then wait: Markets took the two-week ceasefire as a green light to buy. The relief was genuine: Brent plunged 15% to below $94, equities rallied sharply, and the fear that had been embedded in every asset price for six weeks began to decompress. Then markets stepped back. The ceasefire's fragility became apparent within hours — Israeli strikes in Lebanon, Iran's threat to suspend the truce, a Strait that remained coordinated rather than freely open. The risk-on impulse gave way to something more honest: a market on hold, waiting to see whether this intermission becomes a resolution or a prelude to the next escalation.
The S&P 500 reclaims the 200-day moving average: The index has moved back above its 200-day moving average — a technically significant development. The MACD signal has turned bullish. News over the weekend of US naval vessels entering the Strait of Hormuz points to another Trump TACO — and if that pattern holds, markets should rally further and oil prices should continue their retreat. The argument is shifting: the time for $130 oil appears to be over. The question is no longer whether energy prices will normalise but when — and global markets are beginning to price the answer as sooner rather than later.
The toll floor: The one structural caveat is that even a fully reopened Strait does not return the world to pre-war energy economics. Iran's toll system — fees paid for passage, denominated in Rials or yuan, coordinated with the IRGC — creates a permanent geopolitical tax on every barrel transiting the waterway. Markets appear willing to accept this new floor. The argument running through trading desks is pragmatic: a tolled Strait at $85–90 oil is vastly preferable to a closed Strait at $110. If that is the settlement, global markets will move on. They are already beginning to.
| Gold | 4,680 | Selling off — MACD turning bearish; risk-on rotation away from safe havens |
| Copper | 12,858 | Trading bullish — MACD fully bullish; Dr Copper revising its recession call |
| Oil WTI | 94 | Brent 92 — WTI/Brent inverted again; volatile limbo awaiting Islamabad outcome |
| Carbon | 72.80 | Correlated to gas — MACD remains bullish; energy transition narrative holding |
| UST 10Y | 4.31% | 2Y: 3.79% — touch bullish; US CPI as predicted, economic weakness a concern |
| UK Gilts | 4.83% | Range-bound — spread over Germany virtually unchanged; are Gilts cheap vs G7? |
| Bund 10Y | 3.05% | Edging higher — Iran sentiment improving but resolution still absent |
| JGB 10Y | 2.43% | Marching toward 2.50% — FX intervention keeping Yen just below 160 |