Geopolitics

WTO Director-General Ngozi Okonjo-Iweala said supply-chain bottlenecks in the Strait of Hormuz are putting global trade at risk of its most severe disruption in 80 years, threatening food and fertilizer prices, according to Anadolu. She noted that global goods trade expanded 4.6% this year, beating expectations, and that 72% of global commerce continues to operate under WTO rules. She also pointed to WTO estimates that crude oil at $90 a barrel could cut overall trade growth by 0.5 points, with prices now above that level.

U.S. officials said U.S. Coast Guard personnel and FBI agents boarded two energy tankers bound for Texas last month after the vessels were hit by cyberattacks while en route to the United States. One was the Liberian-flagged supertanker VL Prosperity heading to Galveston, where its propulsion, navigation and cargo systems were compromised near the Strait of Gibraltar, cutting communications for 30 hours. The ship can carry roughly 2.3 million barrels of oil. Officials warned that malicious code is already available and that artificial intelligence is accelerating the pace of the threat.

Houthi forces have taken control of key ports in Yemen, tightening Iran’s grip over the Bab al-Mandeb Strait and sharply reducing Saudi crude exports through the chokepoint, forcing some shipments to be rerouted. About 4% of global oil supply is affected. The heightened threat has intensified supply risks for both Brent and WTI benchmarks.

Oil prices surged as conflict in the Middle East intensified, sending Brent crude above $100 a barrel. U.S. stocks fell on Wednesday, with the S&P 500 down 0.3%, the Dow off 320 points, or 0.6%, and the Nasdaq down 0.5%. The average U.S. price of gasoline rose to $4.22 per gallon.

The U.S. government is directing funding into quantum computing under the CHIPS and Science Act, awarding $100 million each to D-Wave Quantum, Rigetti Computing and Quantinuum. D-Wave said it plans to build a 100,000-qubit annealing system and a 10,000-qubit gate-model machine. Rigetti will focus on miniaturizing readout electronics and advancing chip fabrication, while Quantinuum will work with GlobalFoundries to expand U.S.-based quantum semiconductor manufacturing. GlobalFoundries also signed a $375 million, five-year federal contract tied to domestic quantum manufacturing efforts, according to The Wall Street Journal.

The US military said it destroyed five Iranian crude oil tankers near Kharg Island after Iran’s Revolutionary Guard Corps targeted a US Navy warship twice with ballistic missiles over two days. Brent crude climbed and approached the $100-per-barrel level as investors weighed the risk of further disruption in the Strait of Hormuz. In China, consumer inflation rose for the first time since April, while factory-gate prices increased more than expected, driven by higher food and energy costs. GrafTech International said it will raise graphite electrode prices by at least 30%, sending its shares up 15%.

India’s Sensex and Nifty slid in early trade on Wednesday, falling to 75,060.61 and 23,506.10. Brent crude futures moved close to the $100-a-barrel level, trading at $99.33, as tensions in West Asia escalated. Heavyweights including HCL Tech and Infosys led the declines, after the Sensex had already ended the previous session down 0.73%.

The Trump administration said it had “profound concern” about Ford’s alleged links to Chinese technology and manufacturing, including relationships with companies such as battery maker CATL. It also criticized Ford for delaying plans to move production of some Lincoln models from China to the United States until 2030. Ford rejected the allegations, saying a Michigan battery facility has created 1,700 jobs and that its arrangement with CATL is a limited technology-licensing deal. Experts told CNN that Chinese automakers could appear in U.S. showrooms within the next five to 10 years.

U.S. Transportation Secretary Sean Duffy warned Ford Motor Co. that its growing reliance on Chinese technology and manufacturing partnerships poses national security risks and threatens U.S. jobs. In a letter to CEO Jim Farley, Duffy cited Ford’s continued use of CATL-licensed battery technology in Michigan, a joint venture with Geely in Spain, reported talks with BYD on hybrid components, and delayed plans to bring Lincoln models back to U.S. production that he said could extend until 2030. Ford shares fell 4.1%.

Houthi forces attacked civilian and economic facilities in southern Saudi Arabia, wounding 73 people. Saudi Arabia’s Energy Ministry said fires broke out at several oil facilities and utilities, temporarily suspending operations. The incident fueled supply concerns, pushing Brent crude up 1.2% to $97.40.