Mission Grey Daily Brief - June 24, 2025
Executive summary
In a whirlwind 24 hours, the world has witnessed a breathtaking pivot from the brink of a broad Middle Eastern conflict toward a possible—if fragile—calm. The dramatic U.S. airstrikes on Iranian nuclear facilities triggered a cascade of tit-for-tat actions, missile attacks on U.S. bases, and Iran’s formal threats to close the vital Strait of Hormuz, sending shockwaves through global energy and financial markets. Despite these escalations, last night’s announcement by U.S. President Donald Trump of a phased-in “total ceasefire” between Iran and Israel now gives markets a tentative reprieve. Nonetheless, the situation remains volatile, with energy prices whiplashing, logistical disruptions spreading, and deep uncertainty clouding international business prospects. Add to this the ongoing U.S.-China tariff confrontations, the fragility of European and Asian supply chains, and persistent questions about the health of the global economy, and it’s clear: the international business environment is wrestling with one of its most fraught periods in recent years.
Analysis
Israel-Iran Conflict Escalation—Then Sudden De-escalation
Just 48 hours ago, the U.S. executed precision strikes on three of Iran’s principal nuclear facilities, in what was called “Operation Midnight Hammer.” Iran’s response came quickly, with missile attacks targeting both Israel and U.S. military bases in Qatar. The gravity of the crisis led Tehran’s parliament to endorse a closure of the Strait of Hormuz, a move that would threaten roughly 20% of global oil transit and 15% of global LNG shipments. Brent crude spiked to near $80—a five-month high—before Trump’s announcement of a “complete and total ceasefire” started reversing price gains. Yet, doubts about the sustainability of this ceasefire remain, with even Iran’s foreign ministry providing only tentative affirmation of any deal; Iranian leadership suggested final decisions on halting military operations would be subject to “further review” and explicitly contingent on Israel’s actions[U.S.-Iran escal...][President Trump...][Israel-Iran liv...].
The diplomatic scramble has seen the U.S. directly engage China to help restrain Iranian escalation and Russia openly threaten to supply nuclear warheads to Iran. Such realignment signals a significant erosion of traditional global governance, and the episode lays bare the deep interconnectedness—and vulnerability—of global energy, trade, and security infrastructures[U.S.-Iran escal...][Energy in Europ...][IMF chief sees ...].
Economic Shockwaves: Markets, Energy, and Geopolitical Risk
Global markets have endured wild fluctuations: oil surged more than 10% in recent weeks as the possibility of conflict affecting key energy corridors became real. Natural gas prices in Europe hit a three-month high, with the continent’s heavy reliance on Qatari and Middle Eastern LNG now revealed as a serious vulnerability following last year’s pivot away from Russian energy[Energy in Europ...].
Insurance costs for Gulf shipping have leapt, and several shipping lines have refused to enter the Strait of Hormuz altogether. Europe, already balancing on an inflation tightrope, could see its manufacturing sector squeezed should these disruptions persist—Belgium, Italy, and Poland are particularly exposed, as Qatar supplies 38–45% of their LNG imports[Energy in Europ...][America’s econo...]. Indonesia, too, faces strain: every $1 increase in oil price risks adding up to Rp2 trillion to its subsidy bill, while exchange rate pressures threaten its fiscal stability[Iran-Israel Ten...]. Central banks—including the Federal Reserve, the Bank of England, and South Korea’s BOK—have switched to crisis monitoring mode, warning of potential intervention if volatility becomes “excessive”[US-Iran Conflic...][Market navigato...].
For the U.S., JP Morgan economists warn the dual shock of tariffs and conflict could lead to persistent inflation and a possible 40% chance of recession. In contrast to the 1970s, the U.S. is less dependent on foreign oil, but a closure of the Strait would still hit global prices—with knock-on effects on American retail spending, already weakening as consumers fret over tariffs and volatility[America’s econo...][Why CEOs Should...].
Supply Chain Disruption and Trade Risks: The New Normal?
Meanwhile, the larger context of business risk is shifting. U.S. tariffs on steel and aluminum now stand at 50%, with further sectoral measures expected. North American supply chains, particularly in metals, have seldom looked more precarious: Canadian trade unions warn of job losses and the inadequacy of government countermeasures, with “dumped” steel from Asia rerouted through free trade partners[Global Markets ...][Federal respons...]. Proxima’s new global sourcing risk index (developed with Oxford Economics) finds that, surprisingly, Mexico, Turkey, Russia, India, and the Philippines now present the world’s largest supply chain risks—with China not even in the top five due to its “predictable” position amidst recurring sanctions and tariff walls[Why CEOs Should...].
In India, 100,000 tonnes of basmati rice destined for Iran is stranded in ports owing to insurance and logistical restrictions—a microcosm of how Middle Eastern disruptions are cascading through trade flows. The Federation of Indian Export Organisations notes increased shipping costs, insurance premiums and potential delays, yet commends exporters’ adaptive capacity through market diversification and creative rerouting[Business News |...][India's basmati...].
Geopolitics and Multilateralism in the Age of Fragmentation
The events of the past days expose a growing crisis of global governance. The UN’s role has appeared marginal, with power politics and brinkmanship dominating instead. Russia and China have positioned themselves as alternative centers of gravity, supporting Iran—and, by extension, entrenching divisions between free and autocratic blocs. The G7 and upcoming NATO summits will likely pivot their agendas toward energy security, supply chain resilience, and defenses against so-called grey-zone threats that test the boundaries of conventional warfare and international law[Global Summits ...][U.S.-Iran escal...].
International businesses must also remain vigilant regarding the rise of authoritarian actors. The increasing alignment of countries with proven records of state corruption, technology theft, and disregard for labor and human rights with rogue regimes in the Middle East highlights the heightened reputational and legal risks for supply chains running through these territories. Now more than ever, compliance, ethics, and resilience must be at the core of global strategies.
Conclusions
As of this morning, the international system collectively exhales—but hardly in relief. With the specter of wider war in the Middle East now momentarily held at bay, energy markets and global trade have shifted to a cautious “wait-and-see” mode. Volatility is likely to remain high: a breakdown of the ceasefire, an errant missile, or a political miscalculation could send shockwaves through markets once more.
Key questions loom:
- Will the Israel-Iran ceasefire hold, or are we merely witnessing a pause before another escalation?
- Can global leadership—split as it is along ethical and ideological fault lines—restore credible crisis management and avoid a drift into a more fragmented, dangerous world order?
- How should business leaders prepare for an era when energy, technology, and trade risks increasingly overlap with geopolitical rivalry and ethical complexity?
Mission Grey Advisor AI recommends that international businesses focus on scenario planning for both energy supply and trade resilience, prioritize ethical sourcing and robust compliance programs, and intensify strategic monitoring—because the risks of spiraling disruption, whether from state actors or climate shocks, will only grow in this newly unstable era.
Further Reading:
Themes around the World:
Volatile US rate-cut expectations
Markets are highly sensitive to clustered US labor, retail, and CPI releases, with shifting expectations for 2026 Fed cuts. Exchange-rate and financing-cost volatility impacts hedging, M&A timing, inventory financing, and emerging-market capital flows tied to US dollar liquidity.
Macro resilience, currency strength
Israel’s shekel strength, low unemployment and expectations of further rate cuts support domestic demand and investment planning, while war risk premia remain. Foreign firms should hedge FX volatility, stress-test financing costs, and monitor credit-rating narratives and sovereign bond market access.
War-risk insurance capacity expands
New DFC-backed war-risk reinsurance facilities (e.g., $25 million capacity supporting up to $100 million limits) are gradually improving insurability for assets and cargo in Ukraine. Better coverage can unlock FDI and reconstruction contracts, but pricing, exclusions, and geographic limits remain tight.
LNG export surge and permitting pipeline
The US is expanding LNG exports and new capacity proposals, supporting allies’ energy security but tightening domestic gas balances in some scenarios. Energy-intensive industries face price uncertainty; traders and shippers should watch FERC/DOE approvals, contract structures, and infrastructure bottlenecks.
Escalating sanctions and enforcement
The EU’s proposed 20th package broadens energy, banking and trade controls, including ~€900m of additional bans and 20 more regional banks. Companies face heightened secondary-sanctions exposure, stricter compliance screening, and greater uncertainty around counterparties and contract enforceability.
Ports and logistics corridor expansion
Egypt is building seven multimodal trade corridors, expanding ports with ~70 km of new deep-water berths and scaling dry ports toward 33. A new semi-automated Sokhna container terminal (>$1.8bn) improves throughput, but execution and tariff predictability matter.
Rusya yaptırımları ve uyum riski
AB’nin Rus petrolüne yönelik yaptırımları sertleştirmeyi tartışması ve rafine ürünlerde dolaylı akışları hedeflemesi, Türkiye üzerinden ticarette uyum/itibar riskini artırıyor. Bankacılık, sigorta, denizcilik ve ihracatçıların “yeniden ihracat” kontrollerini güçlendirmesi gerekebilir.
Gwadar logistics and incentives evolve
Gwadar Airport operations, free-zone incentives (23-year tax holiday, duty-free machinery) and improved highways aim to deepen re-export and processing activity. The opportunity is new distribution hubs; the risk is execution capacity, security costs, and regulatory clarity for investors.
Tasas, inflación y costo financiero
Banxico pausó recortes y mantuvo la tasa en 7% ante choques por IEPS y aranceles a importaciones chinas; además elevó pronósticos de inflación (meta 3% se desplaza a 2027). Esto encarece financiamiento, altera valuaciones y afecta coberturas cambiarias y de tasas.
Maritime services ban risk
Brussels is moving from the G7 price cap toward a full ban on EU shipping, insurance and other maritime services for Russian crude at any price. With EU-owned tankers still carrying ~35% of Russia’s oil, logistics and freight availability may shift abruptly.
Competition regime reforms reshape deal risk
Government plans to make CMA processes faster and more predictable, with reviews of existing market remedies and merger control certainty. This could reduce regulatory delay for transactions, but also changes strategy for market-entry, pricing conduct, and consolidation across regulated sectors.
Tourism recovery with demand mix risks
Tourism is near recovery: Phuket passengers rebounded to 96.4% of 2019 and arrivals Jan 1–25 reached 2.63m (≈THB129.9bn). However, China remains volatile and room-rate power is limited, affecting retail, hospitality capex, labor demand, and services supply chains.
EU trade friction on palm/nickel
Trade disputes and regulatory barriers with Europe—spanning palm sustainability rules and nickel downstreaming—remain a structural risk for exporters. Firms should anticipate tighter traceability demands, litigation/WTO uncertainty, and potential market-access shifts toward alternative destinations and FTAs.
De-dollarisation and local-currency settlement
Russian officials report near‑100% national‑currency use in trade with China and India and ~90% within the EAEU, reducing USD/EUR reliance. For foreign firms, FX convertibility, hedging, and repatriation complexity rise, especially where correspondent banking access is constrained.
BoJ tightening and funding costs
Markets increasingly expect the BoJ to move from 0.75% toward ~1% by mid-2026, balancing inflation, wages and yen weakness. Higher domestic rates raise corporate funding costs, reprice real estate and infrastructure finance, and alter cross-border carry-trade dynamics.
Risco fiscal e dívida crescente
A dívida bruta pode encerrar o mandato em ~83,6% do PIB e projeções apontam >88% em 2029, pressionando o arcabouço fiscal e a credibilidade. Isso eleva prêmio de risco, encarece financiamento, e aumenta volatilidade cambial e regulatória para investidores.
Pharma market access and import controls
US–India framework provisionally shields Indian generic pharma exports (≈$10bn/yr) from reciprocal tariffs, while India pledges to address medical device barriers. Separately, India restricts low-priced penicillin imports via minimum CIF thresholds, influencing API sourcing and pricing.
Critical Minerals and Re-shoring Push
The U.S. is strengthening industrial policy around strategic inputs, including initiatives to secure critical minerals and expand domestic capacity. This supports investment in upstream and processing projects but raises permitting, local-content, and ESG scrutiny that can delay timelines and alter supplier selection.
Domestic unrest and security crackdown
Large-scale protests and lethal repression are elevating operational and reputational risk for foreign-linked firms. Risks include curfews, disrupted labor availability, arbitrary enforcement, asset seizures, and heightened human-rights due diligence expectations from investors, banks, and regulators.
Data protection compliance tightening
Draft DPDP rules and proposed faster compliance timelines raise near-term operational and legal burdens, especially for multinationals and potential “Significant Data Fiduciaries.” Unclear thresholds and cross-border transfer mechanisms increase compliance risk, contract renegotiations, and potential localization-style costs.
Energy transition supply-chain frictions
Rising restrictions and tariffs targeting Chinese-origin batteries and energy storage (e.g., FEOC rules, higher Section 301 tariffs) are forcing earlier compliance screening, origin tracing, and dual-sourcing—impacting project finance, delivery schedules, and total installed costs globally.
Critical minerals and battery supply chains
Canada is positioning itself as a “trusted supplier” of critical minerals, supporting mining, processing and battery ecosystems. This creates opportunities in offtakes and JV processing, but permitting timelines, Indigenous consultation, and infrastructure constraints can delay projects and cashflows.
USMCA review and regional risk
The coming USMCA review is a material downside risk for North American supply chains, with potential counter-tariffs and compliance changes. Canada’s central bank flags U.S.-driven policy volatility; businesses may defer capex, adjust sourcing, and build contingency inventory across the region.
Border crossings and movement controls
The limited reopening of Rafah for people—under Israeli security clearance and EU supervision—highlights how border-regime shifts can quickly change labor mobility, humanitarian flows and regional political risk. Businesses should expect sudden permitting changes affecting contractors, travel and project timelines.
US Section 232 chip tariffs
US semiconductor tariff planning and AI-chip measures create uncertainty on chips and derivative products. Korea may need “investment-for-exemptions” negotiations similar to Taiwan’s offset model, influencing where fabs, packaging, and R&D are located and affecting compliance, pricing, and market access strategies.
Reconstruction, Seismic and Compliance Risk
Post‑earthquake reconstruction continues, with large public and PPP procurement and significant regulatory scrutiny. Companies face opportunities in construction materials, engineering and logistics, but must manage seismic-building codes, local permitting, anti-corruption controls and contractor capacity constraints in affected regions.
Taiwan Strait escalation and blockade
China’s intensifying drills and gray‑zone “quarantine” tactics are raising shipping insurance, rerouting risks, and continuity costs. Scenario analysis puts potential first‑year global losses at US$10.6T, with Taiwan’s GDP down ~40% in worst cases—material for every supply chain.
Energy reform and grid constraints
CFE’s new “mixed project” rules allow private partnerships but require CFE majority (≥54%) in joint investments, shaping contract design and bankability. Meanwhile grid modernization, storage and microgrids accelerate as industrial demand rises, making power availability a gating factor for plants.
Regulatory and antitrust pressure on tech
Heightened antitrust and platform regulation increases compliance and deal uncertainty for digital firms operating in the U.S., affecting M&A, app store terms, advertising, and data practices. Global companies should anticipate litigation risk, remedy requirements, and operational separations.
Water scarcity and treaty pressures
Drought dynamics and cross-border water-delivery politics are resurfacing as an operational constraint for industrial hubs, especially in the north. Water availability now affects site selection, permitting, and ESG risk, pushing investment into recycling, treatment and alternative sourcing.
Tighter liquidity, shifting finance rules
Interbank rates spiked to ~16–17% before easing, reflecting periodic VND liquidity stress. Plans to test removing credit quotas by 2026 and adopt Basel III buffers (to 10.5% by 2030) may constrain weaker banks, tighten financing and widen funding costs for corporates.
Red Sea route gradual reopening
Following reduced Houthi attacks, major carriers are cautiously rerouting some services via the Suez/Red Sea again, lowering transit times versus Cape routes. However, renewed US–Iran tensions keep insurance, security surcharges and schedule reliability risk elevated for Israel-linked cargo.
Macro volatility and funding constraints
Infrastructure rebuild needs collide with fiscal and SOE balance-sheet limits. Eskom debt and unbundling design shape financing costs, while municipalities’ weak finances constrain service delivery. For investors, this elevates FX, interest-rate and payment-risk premiums, and lengthens due diligence on counterparties.
Ports and rail logistics bottlenecks
Transnet’s recovery is uneven: rail volumes are improving, but vandalism and underinvestment keep capacity fragile. Port congestion—such as Cape Town’s fruit-export backlog near R1bn—threatens time-sensitive shipments, raises demurrage, and pushes costly rerouting across supply chains.
Suez Canal revenues and FX inflows
Canal receipts are recovering: 2026 YTD revenue reached $449m from 1,315 ships, up from $368m a year earlier, with tonnage up sharply. Recovery boosts hard-currency inflows, yet remains exposed to renewed Red Sea escalation and carrier routing decisions.
Sanctions escalation and compliance spillovers
The EU’s proposed 20th Russia sanctions package expands energy, shipping, banking, and trade controls (including shadow-fleet listings and maritime services bans). Ukraine-linked firms face tighter due diligence on counterparties, routing, and dual-use items; enforcement pressure increases financing and logistics friction regionwide.