TALKS DEAD, BLOCKADE DECLARED, IRGC ALREADY THREATENING

• The ceasefire is fraying in Lebanon regardless of what happens at Hormuz. Israeli forces are besieging Bint Jbeil with airstrikes, artillery, and reportedly phosphorus munitions, and have closed all main access routes to the city 7CRD Hezbollah resists Israeli forces besieging south Lebanon’s Bint Jbeil. Hezbollah is fighting back with anti-tank missiles against Merkava tanks and drone strikes on northern Israeli settlements 7CRD Hezbollah resists Israeli forces besieging south Lebanon’s Bint Jbeil. At least 11 civilians were killed in strikes on Maaroub and Qana on Sunday alone 7CRD Hezbollah resists Israeli forces besieging south Lebanon’s Bint Jbeil. Israel has paused strikes on Beirut itself, reportedly under Iranian pressure ahead of the Islamabad talks, but that restraint now looks like it is over.

• Saudi Arabia's East-West pipeline is back to full capacity at 7 million barrels per day, restoring the critical alternative route from eastern oilfields to the Red Sea that bypasses Hormuz entirely 10AJE Saudi Arabia says key oil pipeline back to full capacity after attacks. The Manifa oilfield is also back online. Khurais remains at reduced capacity 10AJE Saudi Arabia says key oil pipeline back to full capacity after attacks. This matters because it gives global markets a partial pressure release if the blockade tightens Hormuz further, but it is nowhere near a substitute for the 20 percent of global oil supply that normally transits the strait.

• Putin called Iranian President Pezeshkian on Sunday and offered to help find a political-diplomatic resolution 8SPK Putin Holds Phone Call With Iranian President Pezeshkian. The Kremlin press service was careful not to say anything specific. The timing is not coincidental: Russia has every incentive to be the party that keeps this conflict manageable rather than letting it escalate to the point where Iranian oil infrastructure is permanently destroyed and energy prices destabilise Russian export calculations too.

• Only 22 ships exited the strait between Wednesday and Friday, against a pre-war average of roughly 135 daily transits 10AJE Saudi Arabia says key oil pipeline back to full capacity after attacks. Three supertankers did exit Saturday, each carrying 2 million barrels, chartered by Chinese and Thai state-linked firms 13AJE Oil tankers exit Strait of Hormuz amid fragile US-Iran ceasefire. But hundreds of vessels remain trapped in the Gulf. A US-enforced blockade layered on top of an Iranian-managed chokepoint means the trickle could become zero.

• Iran-linked propaganda is operating at industrial scale, with AI-generated Lego-style videos estimated to have been viewed hundreds of millions of times 15BBC We spoke to the man making viral Lego-style AI videos for Iran. Experts say it's powerful propaganda. The BBC confirmed that the operator behind one key account admitted the Iranian regime is a "customer," having previously denied it 15BBC We spoke to the man making viral Lego-style AI videos for Iran. Experts say it's powerful propaganda. This is the information battlefield running parallel to the military one, and it is generating significant reach among non-Western audiences who are being shown a coherent narrative: Iran as global underdog resisting US imperial power. The US has no equivalent output.

The data here is two days old, but the signal is clear enough to be worth reading. As of Friday's close, WTI was at $96.57 per barrel and Brent at $95.20, both down sharply on the week as markets priced in a deal getting done 20CNN US inflation tripled last month on record spike in gas prices. That optimism is now visibly wrong. With the talks collapsed and a blockade announced, the direction of travel for oil prices when markets open Monday is obvious. The more interesting question is how much of the blockade risk is already baked in given how elevated prices remain relative to pre-war levels. US annual inflation reached 3.3 percent in March, driven by a 21.2 percent monthly spike in gasoline prices 20CNN US inflation tripled last month on record spike in gas prices. Consumer sentiment hit a historic low, below anything recorded during the Great Recession or Covid 20CNN US inflation tripled last month on record spike in gas prices. Markets that were celebrating a ceasefire deal on Friday are now facing a blockade announcement on Monday morning.

The inflation data from Thursday's CPI release is now the domestic backdrop against which the blockade announcement lands. US gasoline rose 21.2 percent in March alone, and the annual inflation rate tripled from February's 2.4 percent to 3.3 percent 20CNN US inflation tripled last month on record spike in gas prices. That was before the talks collapsed. The blockade, if it tightens Hormuz further, removes the one scenario that was going to bring prices down: a negotiated reopening. Outside the US, the civilian cost of this war is becoming concrete in ways that do not feature in Western news coverage. Thai fishing boats are stranded in port because diesel more than doubled in 15 days, from 83 cents to $2.22 a litre, with tens of thousands of small vessels unable to operate 19ABC Thai fishing port highlights 'big trouble' caused by Middle East war. Thailand imports roughly half its energy from the Middle East and is a major seafood exporter. When the fishing industry stops, it does not stay local.