THE DAY THE CEASEFIRE STOPPED BEING A CEASEFIRE

• China formally ordered its refineries to ignore US sanctions targeting Iranian oil purchases, with Beijing's Ministry of Commerce issuing a prohibition order on May 2 covering five major facilities, including Hengli Petrochemical and Shandong Jincheng Petrochemical Group 11CRD Beijing orders Chinese refineries to ignore 'illegal' US sanctions targeting Iran oil trade. The order instructs Chinese entities not to recognise or comply with US designations. This came two days before Trump's Treasury Secretary Scott Bessent went on Fox News to accuse China of "funding the largest state sponsor of terrorism" and simultaneously asked Beijing to use its leverage over Iran to help reopen the Strait 5AJE US official says China is ‘funding’ Iran, urges Beijing to help open Hormuz. Bessent is threatening Beijing and asking for its help in the same breath, ahead of Trump's expected visit to China next week. That is not a strong negotiating posture.

• The UAE is deporting thousands of Pakistani Shia Muslims, confiscating their bank accounts and assets, according to accounts published by New Lines Magazine and confirmed by a senior Pakistani Shia cleric 9CRD UAE deports thousands of Pakistani workers, blocks them from accessing life savings: Report. Around 15,000 people are reported affected, many of whom had lived and worked in the UAE for decades. Pakistan's Foreign Ministry denied the deportations publicly. The UAE has not commented. This is a story most people have missed entirely, and it has significant consequences: Pakistan is Iran's primary diplomatic mediator, and Abu Dhabi is now systematically expelling a community it apparently views as a security threat given that mediation role. If Islamabad cannot protect its own citizens in the UAE, the back-channel loses political durability inside Pakistan fast.

• Japan and Australia signed energy and critical minerals cooperation agreements in Canberra, with Japanese Prime Minister Sanae Takaichi describing the Strait closure as having an "enormous impact" on the Indo-Pacific 15AJE Japan PM says Iran war oil crisis having ‘enormous impact’ in Asia Pacific. Australia will support up to $1.3 billion AUD in critical mineral projects with Japanese involvement. The two countries also announced a $10 billion AUD deal for Japan to supply Mogami-class stealth warships to the Royal Australian Navy. This is the war's long strategic shadow: countries that previously relied on Hormuz-routed energy are accelerating supply diversification and military buildups that will outlast any ceasefire by years.

• Iran's economy is deteriorating faster than Tehran can contain it. The toman has fallen 22 percent against the dollar in the last month, to 190,000 per dollar on the open market 16GDN Could Iran’s escalating economic crisis weaken negotiating position with US?. Overall inflation is running at 73.5 percent, and food and beverage prices have surged 115 percent 16GDN Could Iran’s escalating economic crisis weaken negotiating position with US?. The UN Development Programme estimates 4.1 million more Iranians could fall into poverty. One estimate circulating in Iranian media puts war damage at nine times the entire Iranian national budget for 2025 16GDN Could Iran’s escalating economic crisis weaken negotiating position with US?. The Guardian reports Iran is still managing to get enough tankers through the US blockade to prevent well shut-ins for now, with Columbia University's Center on Global Energy Policy estimating roughly three weeks of useable storage remaining 16GDN Could Iran’s escalating economic crisis weaken negotiating position with US?. Bessent's "wells explode in three days" prediction from last week has not materialised, but the underlying pressure is real and accelerating.

• The first Boeing KC-46 "Gideon" tanker aircraft completed its maiden flight in the US and will be delivered to Israel within approximately a month, per the Israeli Defense Ministry 8SPK New KC-46 Supertankers Promise Israel Conventional Samson Option Strike Сapability. Israel is acquiring six of these customised, extended-range aerial refuelling aircraft, which analysts say will give Israel the independent long-range strike capability to hit Iran, Yemen, and other distant targets without requiring US approval or support. Israel also approved purchase orders to double its F-35 and F-15 fleets 8SPK New KC-46 Supertankers Promise Israel Conventional Samson Option Strike Сapability. This is Israel quietly acquiring the tools for a unilateral war while the US still holds nominal control of the escalation ladder.

Brent above $115 is the headline, but the more interesting number is what did not move. The VIX, Wall Street's fear gauge, sits at 18.5, barely changed from last week. The S&P 500 closed near record highs. Markets are watching Fujairah burn and shrugging. Either they believe the US and Iran will de-escalate quickly, or they have simply stopped pricing conflict risk into equities after 67 days of practice. The Oil Volatility Index (OVX) at 79.5 is elevated but well below its early-April peak of 93. Tanker stocks and the agriculture basket (DBA) keep quietly climbing, both correctly reading a world where ships cannot move freely and food supply chains remain disrupted. The gold-to-oil ratio has compressed sharply since late April, meaning oil is rising faster than gold. That is a supply-shock signal, not a safe-haven signal. The war just got more expensive for everyone who flies, drives, or eats.

The threat to summer holidays just became materially more real. A BBC investigation published Monday found that jet fuel in Europe has more than doubled since February, from $831 per tonne to above $1,500, after briefly touching $1,838 in early April 18BBC The threat to summer holidays looming from jet fuel shortages. The Gulf region normally supplies roughly 20 percent of internationally traded jet fuel, and Europe sources more than half its jet fuel imports from Gulf refineries. With Hormuz still effectively blocked and today's Fujairah attack hitting one of the few alternative export routes around the strait, there is now a plausible path to physical fuel shortages at European airports ahead of the peak summer travel season 18BBC The threat to summer holidays looming from jet fuel shortages. Airlines have already raised fares and cut capacity. The UK is particularly exposed, with 65 percent of its jet fuel imported and only four domestic refineries remaining operational 18BBC The threat to summer holidays looming from jet fuel shortages. If you have summer flights booked, watch for capacity cuts from European carriers in the next two to four weeks.