Following this morning’s very modest rise in Core PCE (coming just a couple of weeks after CPI disappointed the Trump Tariff infation fear-mongers once again) and a month since the UMich survey found that “Women, Democrats, & Low-Income Americans Are Out Of Their TDS-Addled Minds“, and one week after Goldman finally called out the idiocy of the UMich survey, slamming its “partisanship” and the “sample design break starting from June 2024“…

… not to mention that it has been chronically wrong, warning that “Michigan inflation expectations have already risen even more than in 2022 and this time long-term expectations have risen sharply too, all before tariffs have even meaningfully boosted consumer prices” while “technicalities have exaggerated the increase in the Michigan [inflation] survey, as other survey measures and market-implied inflation compensation have not risen much at horizons beyond the next year”, moments ago the final UMich survey for the month of June saw some notable revisions to the prelim prints, to wit:

The final June sentiment index increased to 60.7 from 52.2 a month earlier, according to the University of Michigan.

The 8.5-point increase was the largest since the start of 2024. The median estimate in a Bloomberg survey of economists called for no change from the preliminary reading of 60.5.

“The improvement was broad-based across numerous facets of the economy,’’ Joanne Hsu, director of the survey, said in a statement.

“With the recent moderation in both tariff levels and trade policy volatility, consumers now appear to believe that their worst fears may not come to pass and have moderated their expectations accordingly.”

More notably, consumers expect prices to rise 5% over the next year, data released Friday showed. That is down slightly from the preliminary reading. It’s also far better than the 6.6% registered in May – the biggest monthly improvement since 2001.

They saw costs rising at an annual rate of 4% over the next five to 10 years, also lower than a month earlier.

Source: Bloomberg

Under the hood, it was Democrats that eased back (very modestly) on their inflation fears (over the short term)…

Source: Bloomberg

…and over the medium term (but independents seem to have caught the ‘tariff derangement syndrome)…

Source: Bloomberg

As a reminder, its the Democratic-run states that are seeing the highest level of inflation, so perhaps they’re on to something…

Source: Bloomberg

The latest data suggest sluggish household demand, especially for services, extended into May after the weakest quarter for consumer spending since the onset of the pandemic.

“Consumer views are still broadly consistent with an economic slowdown and an increase in inflation to come,” Hsu said.

Authored by Jonathan Turley,

The Denver City Council has voted unanimously to shutter a highly successful anti-theft auto license plate tracking system. The system was not closed due to concerns about privacy or finances. It was shut down because Democratic members believed that ICE could use the data to deport illegals.

In May, the council refused to renew the $666,000 contract with Flock for camera monitors around 70 Denver intersections to screen for car theft.

That system resulted in the recovery of 170 stolen cars and 300 arrests. It is also credited with key evidence in the investigation of hit-and-run and murder cases.

However, it could also be used to assist ICE, and that is all that matters. Councilman Kevin Flynn explained it is all about Trump’s election:

“We know that it can help solve crime. But I think since maybe Jan. 20 of this year, those concerns are greatly heightened and have a new reality about them.”

Council member Sarah Parady added:

“We’re living in an era where just this last week, actually, an executive order came out instructing the Department of Justice and the FBI to look for reasons to prosecute local elected officials and activists who they believe are, quote, unquote, obstructing ICE enforcement. This kind of surveillance technology is a gift if you have that kind of ill intent, and the federal government has that ill intent right now.”

Mayor Mike Johnston also stated that they need to halt these arrests because “today’s environment is much different than when the pilot began in early 2024, and there are new community concerns surrounding this technology.”

The police are obviously not happy but car thieves are thrilled.

If this seems utterly insane, keep in mind that this was a unanimous vote of the city council.

Wall Street analysts are breathing a major sigh of relief this morning following overnight news that President Trump’s ‘One, Big, Beautiful Bill’ will not include the controversial Section 899 “revenge tax” proposal. The announcement came after Treasury Secretary Scott Bessent posted on X, noting that productive discussions with international trade partners have helped “defend American interests.”

Trump’s support for Section 899 stems from his economic nationalism agenda and desire to penalize foreign countries that discriminate against U.S. companies through digital services taxes and other taxes. This was primarily aimed at countering the taxation of U.S. firms by several European countries, as well as Canada and Australia.

“Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill. This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond,” Bessent wrote in a series of X posts. 

He continued, “By reversing the Biden Administration’s unwise commitments, we are now protecting our Nation’s authority to enact tax policies that serve the interests of American businesses and workers,” adding, “We are also preserving our tax base, preventing the loss of over $100 billion in American taxpayer dollars according to Treasury estimates and the non-partisan Joint Committee on Taxation.”

“The Trump Administration remains vigilant against all discriminatory and extraterritorial foreign taxes applied against Americans. We will defend our tax sovereignty and resist efforts to create an unlevel playing field for our citizens and companies,” Bessent noted. 

Shortly after Bessent’s comments, Finance Committee Chairman Mike Crapo (R-Idaho) and House Ways and Means Committee Chairman Jason Smith (R-Missouri) issued statements on Section 899 and the OECD Pillar 2 / global minimum tax project:

“At the request of Secretary Bessent and in light of this joint understanding to preserve U.S. tax sovereignty and allow U.S. tax laws to co-exist with the Pillar 2 regime, we will remove proposed tax code Section 899 from the One Big Beautiful Bill Act, and we look forward to active engagement with Treasury on these important issues.” 

At the request of @SecScottBessent and in light of this joint understanding to preserve U.S. tax sovereignty and allow U.S. tax laws to co-exist with the Pillar 2 regime, we will remove proposed tax code Section 899 from the One Big Beautiful Bill Act, and we look forward to…

— Senator Mike Crapo (@MikeCrapo) June 26, 2025

Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, penned a first take note earlier to clients, calling the move by Bessent a “sigh of relief.” 

“Removing Section 899 from the budget negotiations would potentially allow investors to breathe a sigh of relief,” Goldberg said, adding, “That said, it’s difficult to know if the market seriously expected this statute to make it into the final law.”

Deutsche’s global head of macro research, Jim Reid, told clients:

“We are also waiting to see if the U.S. administration will pass its budget megabill as they hope by the July 4th holiday. Senate Republicans have been aiming to vote on the bill this week but that timing looks uncertain, with the latest issue being a technical hurdle that some of the proposed Medicaid changes do not meet the strict rules of the reconciliation process that allows to approve budget policies with a simple majority in the Senate. So that could force meaningful last minute changes. One to monitor going into the weekend. There is good news that late last night we found out that the U.S. Treasury Department has asked the Senate and the House to remove Section 899 (aka the “revenge tax”) from the bill after a deal was struck with G7 leaders to exempt U.S. companies from some taxes. Given how much email traffic there’s been in my inbox on this topic, it’s fair to say global investors will breathe a sigh of relief on this news.” 

Goldman Sachs chief economist Jan Hatzius noted that “the Senate looks likely to pass the fiscal package by this weekend, though several unresolved issues could delay passage until early July.” 

Hatzius provided clients with five key points surrounding the new developments:

1. Senate Finance Committee Chairman Crapo and House Ways and Means Committee Chairman Smith announced that they would remove the provision to increase taxes on foreign investors, businesses, and governments known as Section 899.

2. This follows an announcement from Treasury Secretary Bessent that the U.S. has reached an understanding with other G7 countries to exclude U.S. companies from the tax, and that the U.S. would work to implement this agreement in the OECD framework in coming weeks and months. While Sec. Bessent did not elaborate on what the understanding includes, it seems likely to involve a deal with other countries to grandfather the existing U.S. tax on global intangible low-tax income (GILTI) as a qualified tax under the OECD rules, which would have the effect of reducing foreign taxes on U.S. companies.

3. The Senate’s version of Sec. 899 had already been scaled back from the House’s provision, but would have raised an estimated $52bn/10yrs. While removing the provision will add to the estimated cost of the bill, the international tax agreement could offset some or all of this, as it would likely result in U.S. multinationals paying a greater share of their tax liabilities to the U.S. and a smaller share to other jurisdictions.

4. While it now looks unlikely that Congress will pass Sec. 899 or something like it this year, we note that the president currently has authority under another longstanding section of law (Sec. 891) to double the tax on foreign individuals and corporations in response to discriminatory or extraterritorial taxes on U.S. entities. In light of the announced agreement, there is little reason to expect this authority to come into play, though it could become relevant if other countries do not follow through with the understanding that Sec. Bessent has announced.

5. The Senate looks likely to pass the fiscal package by this weekend, though several unresolved issues could delay passage until early July. The odds of enactment into law by early July have risen, though we still see a fair chance this could slip to later in July or early August, depending on how long the Senate takes to pass the bill and the extent of disagreements between the House- and Senate-passed versions of the bill.

The big takeaway is that some of Wall Street’s top analysts are relieved after the Trump administration dropped the controversial Section 899 from its massive fiscal bill.

Iran says it is still assessing damage at its nuclear sites which were hit during the 12-day war with Israel, and which were bombed in a special Trump-ordered B-2 raid last weekend; however, Tehran has made clear it has no intention to host UN International Atomic Energy Agency (IAEA) chief Raphael Grossi and his team for inspections.

Iran’s Foreign Minister Abbas Araghchi has acknowledged that the damage was “serious” and that “a detailed assessment of the damage is being carried out by experts from the Atomic Energy Organization [of Iran].”

He said further in the Thursday state TV interview, “Now, the discussion of demanding damages [from the US and Israel] and the necessity of providing them has been placed as one of the important issues on the country’s diplomatic agenda.”

However, he clarified that an Iranian negotiating team has no plan to meet with the United States, after President Trump earlier proclaimed that Washington planned to have talks with Iran next week.

He said that leaders are still assessing whether talks with the US would be in Iran’s interest, after previously saying that the Islamic Republic doesn’t engage in negotiations under duress.

Araghchi’s remarks followed the passage of a “binding” bill by Iranian lawmakers to halt all collaboration with the UN nuclear watchdog IAEA.

As for the rejection of talks with the US next week, it flatly contradicts Trump’s words during a NATO summit presser at The Hague. “We’re going to talk to them next week, with Iran,” the president had told reporters.

“I don’t care if I have an agreement or not,” he said. “The only thing we’d be asking for is what we were asking for before about, ‘we want no nuclear.’ But we destroyed the nuclear. In other words, that’s destroyed. I said, ‘Iran will not have nuclear.’ Well, we blew it up. It’s blown up to kingdom come. And so I don’t feel very strongly about it. If we got a document, it wouldn’t be bad.”

He strongly suggested a deal is no longer needed after all, given the assertion that core nuclear components have been ‘destroyed’ and ‘obliterated’. Later the White House Press Secretary confirmed that there is as yet no meeting with the Iranians scheduled.

Meanwhile, the IAEA’s Grossi has expressed doubts: “There is a chance that much of Iran’s highly enriched uranium survived Israeli and U.S. attacks because it may have been moved by Tehran soon after the first strikes, U.N. nuclear watchdog chief Rafael Grossi said on Wednesday,” according to Reuters.

The Pentagon does not want to answer this key question: where is the 440 kg of near weapons grade Highly Enriched Uranium and could it have been moved?

So I asked some nuclear experts.

Daryl Kimball, Arms Control Association, @DarylGKimball explained how Iran could and likely…

— Jennifer Griffin (@JenGriffinFNC) June 26, 2025

A Financial Times article, based on early European intelligence assessments and voiced by EU officials, has concluded something similar. “Preliminary intelligence assessments provided to European governments indicate that Iran’s highly enriched uranium stockpile remains largely intact following US strikes on its main nuclear sites, two officials have said,” the FT wrote Thursday.

The Fed’s favorite inflation indicator – Core PCE – came in hotter than expected in May, rising 0.2% MoM (+0.1% MoM exp) and +2.7% YoY (+2.6% YoY exp)…

Source: Bloomberg

Not exactly the hyped-up inflationary surge the tariff fearmongers had hoped for as non-durable goods price show modest increase MoM…

Source: Bloomberg

Headline PCE rose 0.1% MoM (as expected) and the YoY change ticked up to +2.3% YoY…

Source: Bloomberg

Non-durable goods flipped from deflationary to inflationary (modestly) in May…

Source: Bloomberg

SuperCore PCE inched higher on a YoY basis (from +3.07% to +3.12% YoY)…

Source: Bloomberg

Both personal income and spending tumbled in May (the former by the most since Sept 2021)…

Source: Bloomberg

On the income side, govt workers saw wage growth slow:

• Private worker wages rose 4.6% yoy, up from 4.4% and the highest since Dec 24

• Govt worker wages rose 5.2%, down from 5.3% and lowest since Oct 22

But, Income’s drop was mainly due to a plunge in government handouts…

Source: Bloomberg

With the biggest drop in social security benefit handouts ever as DOGE killed all the payments to those ‘dead’ or extremely old people…

Source: Bloomberg

The savings rate dropped significantly to 4.5% of DPI…

Source: Bloomberg

Is there enough here to nudge The Fed towards a cut? Or do we keep waiting for the ‘lagged’ effect of tariffs to finally show up in prices?

This is the ‘transitory’ no inflationary impact period!

Authored by Mike Shedlock via MishTalk.com,

It’s 2 million now with another 4 million projected. And jobs are harder to find.

Student-Loan Borrowers Are at Risk of Docked Pay This Summer

The Wall Street Journal reports Nearly Two Million Student-Loan Borrowers Are at Risk of Docked Pay This Summer

Roughly six million federal student-loan borrowers are 90 days or more past due after a pandemic-era reprieve ended, according to TransUnion. The credit-reporting company estimates that about a third of them, or nearly two million borrowers, could move into default in July and start having their pay docked by the government. That’s up from the 1.2 million that TransUnion had estimated in early May.

An additional one million borrowers are on track to default by August, followed by another two million in September. Borrowers fall into default when they are 270 days past due.

Wage garnishment is also set to restart this summer. Until past due payments are paid in full or the default status is resolved, borrowers could see up to 15% of their wages automatically deducted from their paychecks.

Borrowers who have been newly reported as delinquent since then on their student loans have seen an average 60-point drop in their credit scores, according to TransUnion. Nine percent of borrowers who fell into delinquency were current on their payments by April, according to TransUnion.  

The Education Department has been urging borrowers to resume payments and emphasizing the consequences. Roughly 43 million borrowers owe more than $1.6 trillion in student-loan debt. 

More than nine million of them are expected to see their credit scores drop this year, according to data from the New York Fed released in March. 

This is no small deal. Millions of zoomers and millennials are spending every penny right now and struggling.

Now come wage garnishment up to 15 percent.

And those graduating now are struggling with a much tougher job market.

Gen Z College Grads Hit the Job Market at the Worst Possible Time

Business Insider reports Gen Z College Grads Hit the Job Market at the Worst Possible Time

Zoomers are staring down a tough hiring market: Economic uncertainty has contributed to employees’ wariness to quit and companies’ hesitancy to hire. Artificial intelligence is disrupting the entry-level rung of the career ladder in industries like tech. Recent graduates have told Business Insider that they’re frustrated by hundreds of rejected applications and being ghosted by prospective employers. Some are settling for whatever work they can find.

It’s long been typical for 20-somethings to have a higher unemployment rate than the general population, and the overall US unemployment rate is still relatively low. One relatively new development, however, is that young people with college degrees are being hit hard by the economic slowdown — especially if they’re hoping to land a role in traditionally white-collar fields. Many Gen Zers are losing faith in the ROI of higher education and are turning toward blue-collar opportunities.

The unemployment rate for recent college graduates ages 22 to 27 has soared compared to unemployment for all workers ages 16 to 65 in recent years. This is a new trend: young people with degrees have historically almost always been more likely to be employed than the rest of the labor force.

The unemployment rate gap between the total workforce and recent grads was historically wide this spring, meaning that the job market for 20-somethings with degrees is among the worst the cohort has seen in at least four decades. Those who studied anthropology, physics, or computer engineering had the highest unemployment rates in 2023, per the Federal Reserve Bank of New York’s analysis of Census Bureau data.

The pool of jobs available for Gen Z — and the workforce as a whole — to apply for has shrunk. Job openings have cooled from 12 million in March 2022 to 7 million this past April. In what’s been dubbed the Big Stay, current employees are holding on to their seats as well, with the monthly quit rate falling from 3% in March 2022 to 2% this past April.

Small and midsize businesses aren’t hiring as many recent grads

Gusto, a payroll and benefits platform for small- and medium-sized businesses, found the rate of primarily white-collar hires aged 20 to 24 at small and midsize employers has fallen from pre-pandemic levels, declining from 9.4% in May 2019 to 2.7% this past March.

Even if new graduates have a job, they may be working in a role that doesn’t typically require a college degree. While this figure fluctuates over time, the share of 20-somethings who have jobs they’re overeducated for is rising in 2025. It coincides with the generation’s pivot toward skilled-trades roles such as electricians or plumbers.

Fed Chair Jerome Powell says the labor market is healthy.

I disagree.

Authroed by Javier Simon via The Epoch Times (emphasis ours),

As artificial intelligence (AI) spreads its tentacles into industries throughout the globe, many wonder whether their jobs are on the chopping block. And it’s not surprising.

Today, it seems like you can do anything with AI. And the world’s biggest companies are pumping billions into this emerging technology.

But despite its rapid development, AI has struggled to replicate interpersonal communication, creativity, and critical thinking. And jobs that require these skills are considered by experts to be less likely to be overtaken by AI.

“While AI can be proficient at handling logical and repetitive tasks, it cannot match the creativity and emotional intelligence inherent in humans,” Smart Forum, a digital services provider for businesses, stated in a blog post. “AI cannot replace jobs that require human intuition, empathy, ethical judgment, emotional depth and physical presence.”

So let’s take a look at some of the fields that could stand strong in the face of the AI job-eating machine.

Health Care Professionals

While AI can contribute to diagnosis and treatment, it simply can’t replace the human touch offered by experienced doctors, nurses, therapists, and psychologists.

In fact, employment of registered nurses alone is expected to grow 6 percent from 2023 to 2033, or faster than the average for all occupations, according to data from the Bureau of Labor Statistics (BLS).

In addition, the BLS expects demand for health care professionals to grow because of an increase in the number of older citizens who tend to require more health care.

Overall, the future seems bright for the health care field—and even AI may not be able to keep up. Here are the median salaries for different members of the health care system, according to the BLS:

• Registered Nurse: $93,600
• Physicians and surgeons: $239,200
• Dentist: $179,210
• Physical therapist: $99,710
• Occupational therapist: $98,340

Skilled Trades

Can AI swing a hammer? No, thankfully. Skilled laborers like construction workers, electricians, plumbers, and carpenters rely heavily on hands-on skills, complex problem solving, and critical thinking in real time. This is something AI struggles to mimic.

And it’s a good time for skilled tradespeople. Cities throughout the country are experiencing construction boosts, leading to a spike in demand for skilled laborers. Plus, an aging workforce is creating a hole that these people would need to fill. The job outlook for construction workers between 2023 and 2033 alone is 7 percent, faster than average, according to the BLS. Here are, according to BLS data, the median salaries for different tradespeople:

• Plumber: $62,970
• Electrician: $62,350
• Carpenter: $59,310
• Construction worker: $46,050

Educators

AI can certainly solve complex math problems and answer your questions about science, history, and much more. But an educator’s role goes beyond simply transferring knowledge.

Teachers strive to develop personal connections with their students in order to understand their unique needs and adapt their techniques accordingly. It’s a very “human” role that AI may have trouble trying to imitate. Plus, the median pay for high school teachers in 2024 was $64,580 per year, according to BLS data.

Creatives

Sure, AI can write articles and produce graphics and audio. But can it really capture what’s unique to a creative’s mind? The answer is a resounding “No.” That’s why writers, musicians, painters, and others who draw from the mind and heart should not fear the rise of AI.

Lawyers

You may think that feeding every law book into an AI algorithm would make it a good digital lawyer. But the machine lacks the critical thinking skills and acumen that a human lawyer displays in court. And skilled lawyers make a good amount of money. The mean annual wage for a lawyer is $151,160, according to research from the BLS.

Social Worker

Being a good social worker requires empathy, care, and a drive to help people get through their darkest hours. It is human at its core, and AI simply can’t compete on an emotional level. And the field is expected to expand. The BLS estimates a 7 percent growth in employment for social workers between 2023 and 2033, faster than the average for all occupations.

The Bottom Line

AI can be as revolutionary as it is alarming. Many people worry that their livelihoods could be replaced by machines and complex algorithms. But no matter how advanced AI gets, it likely won’t develop the human touch. Jobs that require interpersonal skills, emotional support, empathy, critical thinking, and complex problem solving are likely to survive the AI revolution.

The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. 

The U.S. House of Representatives has officially banned the use of WhatsApp on all government-issued devices, citing serious cybersecurity concerns, according to The Guardian.

In a memo sent Monday, the House’s Office of Cybersecurity warned staff that WhatsApp poses a “high-risk to users due to the lack of transparency in how it protects user data, absence of stored data encryption, and potential security risks involved with its use.”

The notice, issued by the Chief Administrative Officer (CAO), advised House employees to use alternative messaging platforms considered safer by the office. Recommended apps included Microsoft Teams, Amazon’s Wickr, Apple’s iMessage and Facetime, and Signal.

Meta, the parent company of WhatsApp, strongly objected to the ban and the reasoning behind it.

“We disagree with the House Chief Administrative Officer’s characterization in the strongest possible terms,” a Meta spokesperson said. “We know members and their staffs regularly use WhatsApp and we look forward to ensuring members of the House can join their Senate counterparts in doing so officially.

Messages on WhatsApp are end-to-end encrypted by default, meaning only the recipients and not even WhatsApp can see them. This is a higher level of security than most of the apps on the CAO’s approved list that do not offer that protection.”

The Guardian writes that among the apps still permitted is Signal, which also provides end-to-end encryption. However, Signal has recently faced its own controversy. Defense Secretary Pete Hegseth reportedly used private Signal group chats to discuss sensitive military actions, including details of planned strikes on Yemen.

According to reports, one chat group was created by National Security Adviser Mike Waltz and included top U.S. security officials — as well as, unintentionally, journalist Jeffrey Goldberg from The Atlantic. A second group, created by Hegseth, reportedly included his wife, brother, and about a dozen others.

Despite Signal’s encryption, the Pentagon has expressed concerns about its use. A March 18 bulletin, described by NPR as an “OPSEC special bulletin,” warned Pentagon employees that Russian hackers could exploit a known vulnerability in Signal. The memo indicated that encrypted messaging apps could be targeted by state-backed cyber actors seeking to access sensitive communications.

While apps like Signal remain authorized for sharing general, unclassified information, the Defense Department memo clarified that “third party messaging apps” must not be used to transmit “non-public” unclassified content, reinforcing ongoing caution across federal agencies regarding digital security practices.

Authored by Irina Slav via OilPrice.com,

• The Israel-Iran conflict has driven up diesel, jet fuel, and gas prices.

• With 20% of global LNG flowing through the Strait of Hormuz, even threats of disruption have raised EU gas prices by 20%.

• Europe’s refusal to sign long-term LNG deals or develop local hydrocarbon resources is backfiring.

Oil and the security of its supply have stolen the media spotlight in the context of the new Middle East war, and with good reason. Ever since Israel first bombed Iran, diesel prices have soared, jet fuel prices have soared, and importers have been troubled. For Europe, the situation is even worse due to natural gas.

Europe has been hurt more than others by the diesel price surge because it has boosted its imports considerably over the past years. About 20% of the diesel Europe consumes comes from imports, and a lot of these imports come from the Middle East. The situation is not much different in jet fuel. Europe depends on imports and a solid chunk of these imports comes from the Middle East.

What’s true of these essential fuels is doubly true of natural gas—even though direct imports of gas from the Middle East constitute a modest 10% of total imports. Yet they constitute a substantial portion of global gas exports, so any suggestion of disrupted supply affects gas prices in exactly the same way it has affected oil prices—and makes a vital commodity less affordable for Europeans.

The latest import figures from the European Commission, for 2024, show that Norway was the EU’s biggest supplier of natural gas via pipeline, and the United States was its biggest supplier of liquefied natural gas. Other large suppliers of LNG included—awkwardly—Russia, with 17.5% of the total inflows of LNG, and Algeria, with 10.7%. Qatar’s share in EU LNG imports stood at 10.4%, largely because Qatar prefers to deal in long-term contracts, and European Union planners don’t.

Yet it is not these 10.4% that matter. It is the fact that around 20% of global LNG trade passes through the Strait of Hormuz and Iran threatened to close the waterway in response to Israeli and U.S. attacks. This prompted a jump in European natural gas prices by a fitting 20% per the Financial Times, which highlighted the dangers of import dependence in energy commodities.

To be fair, the European leadership is aware of these dangers.

They are one reason for many European leaders’ near-obsession with the energy transition, on the assumption that wind and solar would be able to provide local energy—which is true—and that this energy can replace that provided by gas—which is not true. The latter was proven rather conclusively by the April 28 events in Spain, although it will be a while before the facts become accepted.

In the meantime, Europe is in for more suffering, even if Iran doesn’t close the Strait of Hormuz, which for the time being seems to have been taken off the table amid ceasefire efforts. The reason is that Europe needs to refill its gas storage caverns for next winter. Even if it cancels the 90% refill rate requirement, it still needs to buy a lot of gas, most of it on the spot market because of that aversion to long-term gas commitments it believes is part and parcel of the transition effort. And geopolitics has made LNG costlier—which will add billions to the refill bill.

Earlier this year, it became clear that Europe’s bill for natural gas would be higher this year than last because the winter of 2024-25 was colder and storage levels fell lower than in the previous two years. So, this year, Europe needs to buy more gas, adding some $11.2 billion to its total tab. But that was before the latest Middle Eastern war broke out. Now, the tab has gone further up—and Europe is already struggling with high energy costs, not least because of its dependence on LNG imports.

Once again, then, Europe would need to rely on luck. If it is lucky, demand for liquefied natural gas from Asia will remain tepid, as it has been over the first half of the year. If it is lucky, the war between Israel and Iran will be over within the month, removing the supply disruption premium from LNG prices. If it is lucky, finally, winter 2025-26 will be as mild as winter 2023-24 and gas demand will be lower.

Even if Europe gets lucky on all three, however, the cost of its energy will remain elevated compared to places such as China and the United States—its main business rivals. The reason is as simple as it is unpalatable for European political decision-makers: local supply. Both the U.S. and China are putting their local natural gas resources to good use. Europe isn’t, although in all fairness, it doesn’t have as much of an easily accessible gas resource abundance as either the U.S. or even China.

The staunch refusal to develop any hydrocarbon resources locally, however, is as counterproductive as the refusal to make long-term LNG supply commitments. It is a refusal to acknowledge the reality of energy demand and supply. The sooner Europe gets over this, the better for energy supply security.

Moscow has reacted angrily to fresh words of Trump special envoy to the Middle East Steve Witkoff, who has also been working on US diplomacy with Russia’s Putin, after he drew parallels between the Ukraine war and Israel-Iran conflict.

“We’re hopeful that people look at what happened in Iran and say: ‘we want a part of that sort of peace process as well,’” Witkoff told CNBC on Wednesday. “This may well gravitate towards Russia and Ukraine.”

In the interview he expressed hope for expanding the Abraham Accords, particularly to Saudi Arabia: “We are hoping for normalization across an array of countries, maybe that people would never have contemplated coming in before,” he said. “We’re excited for that prospect. That would also be a stabilizer in the Middle East.”

But the fact that he briefly drew comparison to the Ukraine war, expressing hope that Russia would take note of President Trump’s peace ‘successes’ – has drawn condemnation from the Kremlin:

Israel’s “unprovoked” attack on Iran bears no comparison to the Ukraine conflict, Kremlin spokesman Dmitry Peskov said on Thursday, rejecting an assessment made by the US special envoy to the Middle East, Steve Witkoff.

Witkoff had suggested earlier that the recent ceasefire between Iran and Israel could serve as a model for ending the hostilities between Russia and Ukraine.

Peskov emphasized that the two wars greatly differ in “in their essence and nature” and further asserted that the “Israeli attacks on Iran were absolutely unprovoked.”

He said that the Russia-Ukraine conflict is something “going back several decades” – and highlighted constant NATO expansion up to Russa’s doorstep, and especially the “armed coup” in Kiev in 2014.

“It is hardly appropriate to draw parallels here,” Peskov continued, and said that unlike Israel’s and the United States’ aerial assaults on Iran, the notion of “peace by force” is not something Russia did in the context of Ukraine. Israeli officials have even dubbed their actions ‘preemptive’.

But of course, the West is going to vehemently disagree with this narrative, with the difference fundamentally coming down to whether the Ukraine war was provoked or unprovoked.

The question has increasingly been belatedly hotly debated over the last year, & finally even in mainstream publications…