THE COUNTER-PROPOSAL DIED ON ARRIVAL, BUT THE TALKS ARE NOT DEAD YET

• A commercial cargo vessel was struck by a drone in Qatar's territorial waters northeast of Mesaieed Port on Sunday, causing a small fire but no casualties 13AAM Canada denounces attack on commercial vessel in Qatar’s territorial waters 18APW British military says ship caught fire after being hit off coast of Qatar. The UAE shot down two drones and Kuwait reported drones entering its airspace the same day. No group claimed responsibility. Iran and its allied networks have carried out hundreds of such strikes since February. Qatar called it a "dangerous and unacceptable escalation." The pattern is clear: ceasefire or not, the Gulf remains an active strike environment.

• The UK and France host a defence ministers meeting of 40-plus nations on Tuesday to convert military planning into operational orders for a Hormuz security mission 7CRD UK, France convene dozens of nations to discuss military plans to 'reopen' Hormuz 12TOI UK, France to host defense ministers meeting on Hormuz, amid Iran threats. France's Charles de Gaulle carrier and Britain's HMS Dragon destroyer are already moving toward the region. Iran's deputy foreign minister warned any warships approaching the strait would receive "a decisive and immediate response" 12TOI UK, France to host defense ministers meeting on Hormuz, amid Iran threats. French President Emmanuel Macron tried to soften the optics by saying France "never envisaged" a deployment inside the strait itself, only a coordinated security mission. That distinction will not survive first contact with Iranian naval forces if a French warship is anywhere near the chokepoint.

• A second suspected oil slick was detected near Iran's Kharg Island export hub on Sunday, adding to a larger spill first identified May 8 that is now drifting toward Saudi and Qatari waters 14FOX Second suspected oil slick near Iran raises fears of major disaster in vital global oil corridor. The larger slick covers roughly 65 square kilometres and is estimated at tens of thousands of barrels of crude. UN officials warned of an environmental catastrophe. The cause is unconfirmed but experts point to aging infrastructure under wartime strain, not a single vessel incident. If the slick reaches desalination plant intakes before it disperses, the Gulf states most affected are the same ones already absorbing Iranian drone strikes.

• The Israeli military launched a formal probe after Hezbollah published drone footage showing an Iron Dome battery being struck and then the replacement crew being hit in a second strike 9CRD Israeli army probes Hezbollah strike on Iron Dome battery, crew 16TOI Hezbollah airs drone footage showing strike on Iron Dome battery in northern Israel. The Israeli army "could not dispute the video's authenticity" 9CRD Israeli army probes Hezbollah strike on Iron Dome battery, crew. Israeli army chief Eyal Zamir separately warned the Knesset that the Israeli Defence Forces (IDF) needs more soldiers "immediately" or reserves will "collapse in on itself" 4CRD Israel seeks to 'escalate' Lebanon invasion despite warnings of 'collapsing army'. The IDF is simultaneously preparing to expand its Lebanon ground campaign. Those two facts sit in direct tension.

• The UK sanctioned nine individuals and three entities linked to the Zindashti criminal network and the Zarringhalam family's shadow banking operation, accusing them of plotting attacks on British soil and laundering billions through UAE and Hong Kong front companies on behalf of Iran's Ministry of Intelligence and Security 1AJE UK sanctions network accused of planning attacks for Iran. This is the domestic front of the war that rarely gets coverage: Iran has been running assassination and kidnapping operations targeting regime critics in Western cities, and the Hormuz crisis has not slowed that down.

Brent spiked 4.6 percent to nearly $106 in early Monday trading after Trump's rejection, then fell back to $104 3CRD Global oil market in 'race against time' as Asian nations brace for new energy shocks. That snap-back is the market's honest read: the rejection was not a surprise, and the ceasefire is still technically in place. The more significant number is in the Morgan Stanley analysis: even if Hormuz reopens tomorrow, the market has already lost roughly a billion barrels in 2026, and restarting fields, repairing refineries, and repositioning tankers means those barrels do not come back quickly 3CRD Global oil market in 'race against time' as Asian nations brace for new energy shocks. The Oil Volatility Index (OVX) at 75.77 is rising again after a brief dip, which tracks with the deteriorating diplomatic picture. Gold at $4,735 keeps climbing, and silver's jump from $73 to $86 over the past week is notable, as silver tends to accelerate when gold's institutional bid becomes retail fear. The shipping ETF and tanker stocks continue their quiet grind higher, telling you exactly what the market believes about Hormuz's near-term status regardless of what press releases say.

The Morgan Stanley warning that oil prices could reach "catastrophic levels" if Hormuz stays closed into June is now the baseline assumption being priced into futures 3CRD Global oil market in 'race against time' as Asian nations brace for new energy shocks. Saudi Aramco's chief executive Amin Nasser confirmed the global market has lost roughly a billion barrels over two months and said stabilisation will "take time even if flows resume" 3CRD Global oil market in 'race against time' as Asian nations brace for new energy shocks. For Western consumers, that means the fuel price relief that would normally follow a ceasefire announcement is structurally delayed by months. The UK's move to send HMS Dragon and host Tuesday's 40-nation defence meeting represents a significant political shift: the British government is no longer treating Hormuz as someone else's problem, and the political cost of that posture will start landing at the pump before it lands in Parliament.