Greece, home to more oil-tanker capacity than any other nation, cautioned its ship owners to think again if they’re considering entering the Persian Gulf in the wake of US airstrikes. Vessels planning to sail through the Strait of Hormuz, the waterway that sits at the mouth of the region, should “reassess passage” until the situation normalizes, according to a circular seen by Bloomberg that its shipping ministry sent to vessel owners. It advised waiting in nearby safe ports.

Naval forces in the area warned that ships, especially US-linked ones, could be at heightened risk. Shipping giant A.P. Moller – Maersk A/S said it continues to transit Hormuz but is ready to re-evaluate its position based on the information available.  

The actions of the maritime industry — and its risk tolerance — will be a critical detail in the wake of the strikes because of Iran’s proximity to the Strait of Hormuz, a conduit for a fifth of the world’s oil and an unavoidable searoute into the Persian Gulf.

Athens’ warning is the latest sign of pressure on shipping markets as attacks on Iran escalate. Tanker earnings already soared by almost 90% since Israel first started conducting airstrikes on June 13. As one of the world’s largest shipowning nations, advice to Greece’s vessel owners would have a major impact on commodity transportation markets, especially oil. 

There’s every chance shipowners will ignore the advice because the Persian Gulf is too-important a region for them to avoid and rates can always rise to compensate for the risk of sailing in the region. Operators that do decide to transit Hormuz should adopt the highest security level available and maintain the maximum possible distance from Iranian waters, Greece’s ministry added.

In Sunday’s notice, the Greek ministry cited concern around a possible closure of Hormuz as a reason behind its message. 

Read more: Qatar Advises Caution for LNG Vessels Using Hormuz Strait 

Officials at three Greek tanker companies said they were still assessing the situation. One did indicate he might still allow his tankers to enter the region, while another said their ships would likely stay away.

Greek government spokesman Pavlos Marinakis said in a statement that the government, via the shipping ministry, advised Greek-flagged and Greek-owned ships in the area of the Strait of Hormuz to go to safe port until the situation normalizes. 

Bigger Risk

Naval groups are also warning of greater risk. 

On Sunday, the Joint Maritime Information Center, a liaison between navies and merchant shipping in the region, said that Washington’s airstrikes mean US-linked ships sailing through the Red Sea and Gulf of Aden face a high risk of attack. 

Yemen’s Houthi rebel group issued fresh threats against American commercial and naval ships earlier in the day. There had been a ceasefire between the US and the Houthis in early May, geared toward limiting the group’s attacks on the US navy. US-linked ships should consider re-routing, the JMIC said in its update.

Still, it said some US-associated vessels have successfully transited the Strait of Hormuz, “which is a positive sign for the immediate future.”

Separately, the European Union’s naval force in the region raised its threat assessment for US-linked vessels as a result of the strikes. It now sees a severe threat to ships linked to the US and Israel and a low risk for all other ships. 

“This does not exclude the possibility of all merchant vessels being targeted in the future,” it said in an update published by France’s MICA Center, which helps co-ordinate global maritime security. 

Donald Trump took the biggest gamble of his combined four and a half years in the White House on Saturday night in striking Iran and joining Israel’s war against the Islamic republic. 

Trump’s primary wager is that Iran and its proxies in the Middle East have been so weakened that the US president can cast his intervention as both limited and successful. It is also a bet that a cowed Tehran will swiftly seek a settlement rather than retaliating.

If Trump is right, he will have achieved a goal that has eluded the US foreign policy establishment for decades: the elimination of the Iranian nuclear threat. And he could cement his own legacy at home and abroad as a strongman who can achieve “peace through strength”.

But the move carries the huge risk of inflaming the Middle East further — jeopardising the security of the US and Israel and backfiring on a president who had vowed not to draw America into new global conflicts. 

In a press conference at the Pentagon on Sunday morning, Pete Hegseth, Trump’s defence secretary, said: “Many presidents have dreamed of delivering the final blow to Iran’s nuclear programme, and none could until President Trump.”

But experts caution that the road ahead is full of unknowns — and the US president and his allies cannot claim victory until Tehran’s full response becomes clear.

“It all depends on how the Iranian regime reacts — and it’s not clear what the regime’s capacities and will are at this point. [But] Iran’s network across the region remains operationally lethal, and it is able to sow more instability and terror if it chooses to do so,” said Brian Katulis, senior fellow at the Middle East Institute, a Washington think-tank. 

Trump had spent much of his 2024 presidential campaign arguing that he would be a peacemaker in his second term, solving global conflicts rather than fomenting new ones.

But the president, under pressure from Israel’s Prime Minister Benjamin Netanyahu, saw a strike against Iran both as an opportunity to be seized, and a chance to secure a legacy as a leader willing to wield American military power.

On Saturday, Trump seemed to relish his transition from isolationist to warmonger. The president donned a red “Make America Great Again” cap as he gathered with top aides in the White House situation room. During a late-night speech to the nation after the strikes, he warned that he was ready to expand the military campaign against Iran, if needed.

“There will be either peace or there will be tragedy for Iran far greater than we have witnessed over the last eight days,” Trump said. “Remember, there are many targets left . . . But if peace does not come quickly, we will go after those other targets with precision, speed and skill.”

Trump’s vice-president JD Vance — who has in the past been critical of US intervention in overseas conflicts — told ABC News on Sunday: “You can’t be weak. You can’t sit there and allow the Iranians to achieve a nuclear weapon.”

Iran has always been something of an exception to Trump’s non-interventionist mantra. In early 2020, towards the end of his first term, he launched a high-stakes military operation to assassinate Iran’s military commander Qassem Soleimani in Baghdad. 

“If Americans anywhere are threatened, we have all of those targets already fully identified, and I am ready and prepared to take whatever action is necessary. And that, in particular, refers to Iran,” Trump said at the time.

On his visit last month to the Gulf region, the US president had issued another clear warning to Tehran. “We want them to be a wonderful, safe, great country, but they cannot have a nuclear weapon,” Trump said. “This is an offer that will not last for ever.”

Those public warnings to Tehran were dramatically stepped up over the past week, as he departed early from a G7 summit in Canada to consider the strikes against Iran. His suggestion on Thursday that the Islamic Republic had two more weeks to bow to US demands proved shortlived.

Dana Stroul, former deputy assistant secretary of defence for the Middle East, now at the Washington Institute for Near East Policy, said Trump’s bellicose shift on Iran was at odds with his earlier stance on foreign policy.

“Trump has repeatedly stated his preference for diplomacy, his desire to make a deal, and his desire to be judged by the wars the United States does not enter into,” she said.

“And here we are, five months into the second administration, and he has entered the United States into direct conflict with Iran, absent a serious articulation to the American people about the intelligence picture, absent serious engagement with Congress . . . about authorising the use of military force.”

Republican lawmakers were quick to praise Trump’s move on Saturday night.

Speaker of the House Mike Johnson, a loyal ally of the president, said the strikes had prevented “the world’s largest state sponsor of terrorism, which chants ‘Death to America’, from obtaining the most lethal weapon on the planet.

“This is America First policy in action,” Johnson added.

Nearly all of the Democrats on Capitol Hill expressed outrage, questioning why the president had neither informed Congress about his plans nor sought lawmakers’ approval.

It remained unclear at the weekend whether US voters would rally behind Trump’s decision. A YouGov/Economist poll out last week showed more than half — 53 per cent — of Trump’s own supporters were opposed to the US joining Israel in striking Iran.

Still, Aaron David Miller, a former US state department negotiator in the Middle East now at the Carnegie Endowment for International Peace, said Trump had “a lot of margin politically” to keep fighting, especially if Iran retaliated.

But he also warned that the window may not be open for long, especially if the war widened or sparked a new energy crisis. “How that would play with Americans being killed, and the price of oil over $100 a barrel, is another matter.”

Jack Reed, the top Democrat on the Senate Armed Services Committee, put it another way: “This was a massive gamble by President Trump, and nobody knows yet whether it will pay off.”

Reshetnikov’s declaration confirmed what several economists foresaw earlier this year: Russia’s high-spending war economy, after years of defying predictions of imminent recession, is finally running into the hard limits of labor, productivity, and inflation.

Russia’s 2022 invasion of Ukraine prompted a slew of sanctions by Western nations, and the near-total departure of Western companies from the nation. But despite predictions of its imminent demise, the country’s economy has held up fairly well by pursuing what economists call “military Keynesianism,” fueling growth through massive defense-related fiscal spending. By pouring a record number of resources into the military-industrial complex, which reached a value of $167 billion last year, the Kremlin spiked industrial production, drove two consecutive years of GDP growth, and lifted wages across war-related sectors. 

For decades, the Kremlin has allowed Russia’s defense budget to grow faster than the country’s GDP, but the budget expenditures have increased enormously since the start of Russia’s invasion of Ukraine. In 2021, the country spent 3.6% of its GDP on national defense, according to the World Bank. Now, 6.3% of the GDP goes to defense spending, nearly double the share in  the United States. 

Russia’s military spending bubble has created what Elina Ribakova, economist at the Peterson Institute for International Economics describes as a game of musical chairs. 

“Everybody’s making money. Suddenly, people are enjoying higher incomes, and can get a mortgage, or buy durables. It makes this war popular in a practical, morbid way. You want the music going,” she explains.

But, as Nicholas Fenton, associate director at the Center for Strategic and International Studies warns, “You can only kind of spend so much before you hit structural limits in the economy. And the big hang up for the Russian economy throughout this period has been the country’s chronic labor shortage.”

Prior to Russia’s invasion of Ukraine, the country reported 4.75% unemployment in 2021, with levels hitting a record 2.4% low in early 2025, according to state-reported data. But as unemployment has declined, the country has also witnessed a mass exodus of as many as one million residents, and has suffered significant military deaths in the hundreds of thousands. These figures have exacerbated a pre-existing worker deficit in Russia due to a declining working-age population. In 2022 alone, the number of workers aged 16 to 35 fell by 1.33 million, and their share of the labor force was the lowest on record since 1996.

These preexisting shortages in the labor market have compounded as citizens were drafted, emigrated, or flocked to defense-related jobs with lucrative bonuses. Although real wages increased, productivity didn’t, fueling inflation and the threat of stagflation outside of the military, and stifling investments in non-defense sectors.

This spring, Russia’s manufacturing sector, an industry that also includes defense enterprises, suffered its steepest downturn in close to three years, dropping 2 points from February to March. Similarly, Russia’s industrial production growth hit a two-year low, increasing only 0.2% year-on-year.

All the while prices have continued to increase, growing by 9.52% last year compared to 7.42% in 2023. Currently, inflation in Russia sits at nearly 10% and the central bank’s hawkish stance has interest rates up to 20% in June. Meanwhile, the central bank’s growth forecast is between 1 and 2% for 2025. 

Interest rates may be shifting, however: senior officials and Russian businessmen have repeatedly called for cuts to promote growth, and President Vladimir Putin has urged policymakers to strike a balance between fighting inflation and boosting growth.  

Ultimately, for the country’s growth potential to change, the country would need to improve labor productivity, a difficult feat amid persisting sanctions and significant inflation, according to Alexander Kolyandr, senior fellow at the Center for European Policy Analysis. 

On a per-capita basis, the nation’s GDP lags far behind peers, closer to that of Mexico or Turkey than Western Europe. And unlike Germany or Japan, Russia’s growth is heavily dependent on volatile commodity exports, such as oil, and state-driven demand.

Oil and gas revenues which account for around 20% of the country’s GDP, underscoring the precarious nature of its fiscal health. In the first half of 2025, falling oil exports and a dip in global prices forced the Kremlin to revise its budget deficit. But the growing conflict between Israel and Iran has already pushed oil prices higher, offering Russia potential temporary budgetary relief.

“The war in the Middle East is actually pretty good for Putin, but that wouldn’t save the economy. It just means that the government may continue to maintain this policy of managed decline,” Kolyandr tells Fortune. 

Ribakova agrees with Kolyandr. “We were sort of rubbing our hands as oil was going down because that’s the most effective sanction against Russia. And of course, now we’ve seen the prices pick up,” she says.

Russia’s oil exports, however, don’t provide a solution to the lack of foreign investments in the country and the total retreat of American companies. Even with President Donald Trump’s hands-off approach to diplomacy with the Kremlin, Charles Kupchan, senior fellow at the Council on Foreign Relations, sees the return of U.S. businesses to Russia as a key bargaining chip. 

“Trump is saying to Vladimir Putin, ‘if you’re ready to make a deal and end this war and agree to a ceasefire in place, I can envisage a return of American companies to Russia. I can envisage the rehabilitation of Vladimir Putin,’” he says.