Good morning and welcome back. In today’s newsletter:
-
G7 finance ministers hold an emergency meeting
-
German chancellor’s party suffers defeat in key election
-
China’s fight to wipe out poverty
-
Ending the grim march of the touch screen
We start today by examining the impact of the Iran war on oil prices and the global economy.
Emergency G7 meeting: Finance ministers from the world’s richest nations will convene later today to address the surge in oil prices following the US-led attack on Iran. The price of a barrel of Brent crude, the international benchmark, surpassed $100 earlier today for the first time since Russia’s invasion of Ukraine in 2022.
G7 ministers will meet with Fatih Birol, International Energy Agency executive director, at 8.30am New York time, as reported by sources. They will discuss the possibility of releasing petroleum from reserves to combat the spike in oil prices. Three G7 countries, including the US, have voiced support for this proposal, according to insiders.
Why it matters: The IEA’s 32 members hold strategic reserves to address oil price crises. These emergency petroleum stockpiles were established in 1974 after the Arab oil embargo and have been tapped into only five times since the organisation’s inception.
The reserves currently stand at 1.2 billion barrels of oil, and officials suggest that ministers will deliberate on releasing about a quarter of that to alleviate the upward pressure on prices. Brent crude has surged over two-thirds since the beginning of the year, hitting nearly 25% at the start of trading today at $116.71 before retracting some gains. By late morning, it settled at $108 a barrel, while European shares declined sharply and US futures indicated a lower open in American markets later today.
The recent surge in oil prices poses a threat of inflation that could have long-lasting repercussions on global economic growth. In the US, average gas prices rose to $3.45 per gallon yesterday, up from $2.98 a week ago, prompting President Donald Trump to face pressure to curb the escalating prices. Stay updated on the conflict through our live blog.
Here are the latest developments as the war enters its second week:
-
Iran has named Mojtaba Khamenei, the son of the slain supreme leader, as his father’s successor, indicating the likelihood of the Islamic republic maintaining its hardline stance towards the US, Israel, and the West.
-
Donald Trump’s consideration of deploying troops inside Iran, including special forces to seize Tehran’s enriched uranium, has raised concerns in Washington about deeper US involvement in the conflict.
-
Historian Eugene Rogan explores where this war may lead in his essay on “Operation Epic Fury” and its implications for the Gulf and the wider region. “However this ends, the Middle East will never be the same,” he writes.
-
The impact will reverberate through supply chains, inflation, and debt markets, as highlighted by Rana Foroohar. She points out that as complex as geopolitics is today, geoeconomics is even more intricate.
Here are the key topics we’re tracking today:
-
Trade: Mexico’s economy minister Marcelo Ebrard presents a report on consultations concerning the US-Mexico-Canada trade agreement.
-
Company results: Hewlett Packard Enterprise is expected to announce an increase in first-quarter revenue.
Join our exclusive subscriber webinar on the Middle East war. On Wednesday, March 11, a panel featuring FT columnists Kim Ghattas, Edward Luce, Katie Martin, and Gideon Rachman will join chair Alec Russell, the FT’s foreign editor, to delve into the political, military, and diplomatic dynamics behind the conflict. Register here.
Five more top stories
1. German Chancellor Friedrich Merz’s Christian Democrats faced a setback in crucial state elections in Baden-Württemberg, the industrial hub of Germany home to companies like Porsche, Mercedes-Benz, Bosch, and SAP. Merz had aimed to reclaim the 11 million-strong state a year after taking office, ahead of more challenging regional elections later this year.
2. A trove of documents allegedly belonging to the deceased leader of Mexico’s Jalisco New Generation Cartel indicates that he paid substantial bribes to police and other authorities. Learn more about the “narco-ledger” of handwritten and printed papers discovered by Mexican newspaper El Universal.
3. China is “positive and open” about the upcoming visit by Trump, signaling its eagerness for the first visit to Beijing by a US president in almost a decade to be successful. China’s foreign minister, Wang Yi, emphasized the need for dialogue with the US, while also stating that the Iran war “should not have happened”. Read more about the March 31 summit preparations.
4. US private equity giant KKR aims for a 10-fold return on a potential multibillion-dollar sale of a long-standing company that supplies cooling equipment for data centers, as the AI boom boosts valuations. CoolIT Systems, which dates back to 2001 when it produced liquid cooling systems for gaming computers before shifting to support AI infrastructure, is at the center of this high-stakes deal.
5. Switzerland has voted to implement individual taxation, marking one of the most significant changes to the country’s tax system in decades and ending rules that critics argue penalize married couples where both partners work. This reform will eliminate a distortion in the system referred to as the marriage penalty.
Today’s big read
China has lifted over 700 million people out of poverty, but doubts linger about President Xi Jinping’s assertion that the mission is complete. Has China truly eradicated poverty? William Langley investigates in Guizhou.
We’re also reading . . .
-
Latin America: The dramatic turnaround in political fortunes for the right carries significant implications for critical minerals.
-
US labor market: The surge in training programs results from the convergence of two major trends, notes Oren Cass.
-
In a buzz: Tech companies like drone maker Quantum are gaining investor support in Europe, bolstering the region’s venture capital industry, as highlighted by Patrick Jenkins.
-
Travel and geopolitics: Zubin Karkaria, CEO of visa processor VFS Global, shares with the FT why he believes the geopolitical impact on global travel is only “temporary”.
Chart of the day
The US economy lost 92,000 jobs in February, according to the Bureau of Labor Statistics. This significant decline in job creation nearly eroded the gains from the previous month, sparking concerns about the strength of the US labor market. Additionally, the uptick in oil prices is causing traders to adjust their expectations for interest rate cuts by the Federal Reserve this year.
Take a break from the news . . .
While we may appreciate the convenience and speed of self-service checkouts, Pilita Clark argues that it’s time to halt the relentless march of touchscreen technology.
