Victoria Craig hosts this Financial Times news briefing covering global shipping disruptions, energy supply concerns, and UK political turmoil. Key contributors include Malcolm Moore, the FT's energy editor, and Lucy Fisher, Whitehall editor and political podcast host.

The episode examines how the U.S.-Iran conflict has effectively halted shipping through the Strait of Hormuz, creating record-high freight costs and threatening global energy supplies this summer. Meanwhile, UK politics faces continued instability as potential leadership challenges emerge against Prime Minister Keir Starmer, with markets responding negatively to the ongoing uncertainty.

Strait of Hormuz Crisis Drives Record Shipping Costs

Iranian mines in the Strait of Hormuz have effectively halted shipping through the critical waterway, forcing companies to resort to expensive land routes with significant backlogs and extra charges.

Freight rates for goods from Shanghai to the Gulf and Red Sea hit record highs last week, surpassing even pandemic peaks as shipping companies struggle with alternative routes.

The UK pledged to send autonomous Canadian-built vessels to help reopen the waterway 'when conditions allow,' while defense companies prepare uncrewed mine clearing systems.

Energy Supply Cliff Edge Approaching This Summer

Malcolm Moore explains the current situation as 'the eye of the storm' - prices stabilized after initial spikes, but stockpiles are approaching 'critically low levels at which the system basically starts to buckle.'

The crisis has already arrived in Asia, Africa, and poorer countries where fuel rationing and work-from-home policies are in effect, while developed nations face primarily price increases rather than shortages.

Nearly 80 countries have introduced emergency measures to offset price pressures, with economists increasingly using 'the R word recession' as the conflict continues.

'The world still runs on oil and gas. And so if the economy can't get hold of that, then growth is going to get a hit' - Malcolm, warning of potential job losses and factory shutdowns.

UK Political Turmoil Threatens Market Stability

Andy Burnham's potential return to Parliament through the Makerfield by-election could trigger a leadership challenge requiring backing from 81 MPs (20% of the parliamentary Labour Party).

Wes Streeting, the recently resigned health secretary, advocates rejoining the EU and calls Brexit 'a catastrophic mistake,' creating a 'devilish move' that pressures Burnham on European policy.

Market concerns intensified with UK borrowing costs hitting a 28-year high and the FTSE 100 falling 2% due to speculation about potential left-leaning government policies under Burnham.

Lucy Fisher notes the UK has had 'more prime ministers than Italy since 2015,' attributing Starmer's troubles to 'failure to plan' despite polling showing support for ambitious reforms.

Asset Managers Maintain Middle East Expansion Plans

State Street proceeds with pre-war plans to open an Abu Dhabi operating center, while Partners Capital opened its first Middle East office last week despite regional conflicts.

Investment firms view business disruptions as short-lived, continuing decades-long expansion planning to build name recognition and attract capital from the region's wealthy investors.