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U.S. and Israeli aircraft are circling over the subterranean bases, destroying missile launchers as they emerge to fire

Iran spent decades constructing underground bunkers to shield its vast missile arsenal from destruction. Less than a week into the war with its two most powerful adversaries, the strategy is beginning to look like a blunder.

U.S. and Israeli war planes and armed drones are circling over the dozens of cavernous bases, striking missile-carrying launchers when they emerge to fire. Meanwhile, waves of heavy bombers have dropped munitions on the sites, apparently entombing the Iranian weapons below ground in some locations.

Satellite imagery taken in recent days shows the smoldering remains of several Iranian missiles and launchers destroyed in U.S. and Israeli airstrikes near entrances to the “missile cities,” as Iranian officials call the subterranean sites.

Tehran managed to shoot more than 500 missiles at Israel, at U.S. bases and at other targets in the Persian Gulf region since the conflict began this past Saturday, although many have been intercepted, according to governments in the region. There have been fewer large salvos since the first days of the conflict, a sign that the U.S.-Israeli attacks are degrading Tehran’s ability to strike back.

“We’re hunting Iran’s last remaining ballistic missile launchers to eliminate what I would characterize as their lingering ballistic missile capability,” Adm. Brad Cooper, the top U.S. commander in the Middle East, said in a video briefing Tuesday. “We’re seeing Iran’s ability to hit us and our partners is declining.”

Tehran appears to have moved some of its missiles and truck launchers out of the bunkers before the war began, hoping to protect them from attack by dispersing them. Cooper said the U.S. and Israel have destroyed hundreds of missiles, launchers and drones.

U.S. Central Command, which is conducting the air campaign, said Wednesday that Iran’s missile launches have dropped 86% in four days.

Analysts said it is likely that much of Tehran’s remaining stockpile of thousands of medium- and short-range missiles remains in underground bases whose locations are mostly known to the U.S. and Israeli militaries.

That underscores a fundamental flaw in the missile-city concept: “What was once mobile and difficult to find is no longer mobile, and easier to hit,” said Sam Lair, a research associate at the James Martin Center for Nonproliferation Studies, a research organization in Monterey, Calif.

With Iranian air-defense batteries largely neutralized, the U.S. and Israel are keeping slow-moving surveillance aircraft flying over known missile bases in some locations—and only attacking, using manned jet fighters or with armed drones, when they see signs of activity, analysts said.

A cluster of bases near the southern city of Shiraz appears to have been struck several times, according to analysts. Commercial-satellite photos released by the Martin Center show mobile missile launchers that had apparently exited one of the underground sites into a nearby canyon were destroyed before firing their missiles.

A March 2 satellite image of Shiraz, three days into the war, showed a reddish plume near one of the demolished launchers, indicating that nitric acid fuel was leaking from a missile. Several other launchers were destroyed, igniting a fire that appeared to have spread through the canyon, according to Lair.

At a base near Isfahan, a satellite on March 1 captured a photo of an undamaged missile launcher, apparently moving down the road near the facility. A crater in the road nearby suggested a U.S. or Israeli warplane tried to strike the vehicle but missed, said Lair.

A photo of the same site the following day revealed evidence of later heavy bombing of several entrances to the underground facility. Debris “from bunker buster munitions can be seen around both sets of tunnel entrances,” Lair said in a social-media post. “Whether the entrances collapsed is unclear.”

The entrance and nearby roads to an Iranian base near Kermanshah appeared to have been struck by heavy U.S. bombs, according to Lair, citing a March 3 photo by Planet, a commercial satellite imagery company.

Iran is continuing to attack using armed drones and sporadic missile launches. It might be holding back some of its most powerful and longest-range missiles for use as a last resort if the regime appears in imminent danger of falling.

“No one can count their arsenal, which means there’s a lot of uncertainty about how long they can last, which helps them,” said Decker Eveleth, a research analyst with CNA Corp., a Washington, D.C.-area think tank.

Tehran decentralized authority for firing missiles to prevent U.S. and Israeli strikes on its military and political leadership from crippling its ability to respond. Iranian commanders have said they can quickly replace destroyed missiles by building more, though adding additional launchers is more difficult.

Almost all of the dozens of missile bases are underground but have aboveground buildings, roads and entrances that make it possible to identify them from satellite photos, áccording to analysts. The Pentagon and Israel’s military have spent years locating the facilities.

U.S. air attacks appear to be focusing on bases in southern Iran, while Israeli warplanes are mostly striking facilities in the north, analysts said.

The tunnel entrance to an underground missile base north of the Iranian city of Tabriz, which was visible in satellite photos taken last month, appeared to be collapsed in a March 1 photo, a sign that the facility had been targeted in airstrikes. Tunnel entrances at another site near Tabriz were damaged, a Planet image released by the Martin Center showed.

Three other missile bases in southern Iran, near the towns of Khorgo, Haji Abad and Jam, have also been hit, according to analysts.

The decision to attack surface targets reflects both the large numbers of Iranian sites as well as the limited availability of bunker-busting bombs in the U.S. arsenal that could penetrate beneath the surface and destroy the underground facilities, analysts said.

It also highlights the urgency for the Pentagon to knock out Tehran’s missiles early in the conflict, or at least cripple its ability to fire them, before the supply of air-defense interceptors for knocking down incoming Iranian missiles is exhausted.

“These attacks are being carried out in waves, where they destroy two or three targets at a time,” said Colin David, a former U.S. Army missile specialist and a researcher with Alma. “After multiple waves, the bases lose their effectiveness due to the loss of surface structures and launchers.”

Separating fact from fiction about the missile cities has always been difficult. Iran released video footage in March 2025 of what it claimed was its latest large underground facility, showing senior commanders touring long, windowless corridors filled with missile-carrying trucks. The video didn’t name the location.

At some bases, Tehran has built crude underground silos for firing missiles without having to bring them into the open. A base in southern Iran near the town of Khormuj is believed to have nine underground silos for firing missiles without bringing them to the surface, according to David. Primitive by U.S. standards, the silos are little more than deep holes dug into the side of a mountain that point toward the nearby Persian Gulf, flanking a paved entrance to the underground facility.

It is believed that Khormuj has a mechanical loader for moving missiles into the silos on train tracks, instead of on mobile launchers. Tehran released a video in 2022 showing a facility that resembled Khormuj without identifying the location, David said. It showed a half-dozen upright missiles moving along the tracked carousel in a cavernous tunnel.

But Iran has largely abandoned the idea of firing missiles from underground launch locations, according to Eveleth, owing to the technical difficulties of reusing silos.

Beijing sets historically low growth target of 4.5% to 5%

China set its 2026 gross domestic product growth target at 4.5% to 5%, the lowest since at least the 1990s.

The lower target reflects tolerance for weaker growth amid muted household spending, dampened investment, and a struggling real-estate market.

Premier Li Qiang designated boosting domestic demand as the top policy priority for 2026 and announced new financing tools.

China signaled that the world’s second-largest economy is entering an era of slower expansion, setting a target for gross domestic product growth of between 4.5% and 5% this year.

It is the lowest target set since at least the 1990s and follows three years in which officials called for growth of “around 5%.” If China’s economy were to expand at a pace below 5% this year, it would be the slowest growth reported by the country in more than three decades, other than during the Covid-19 pandemic years.

China said its GDP grew 5% in real terms last year, meeting its official target despite a renewed trade war with the U.S.

A lower GDP target for 2026 reflects a level of tolerance for weaker growth as China’s economy contends with muted household spending, dampened investment and a real-estate market in the doldrums.

The less ambitious growth target also gives Chinese leaders some room to maneuver the economy through complicated geopolitical terrain—including conflict in the Middle East and the threat of further trade pressure from President Trump—while continuing to pursue Beijing’s strategic goal of technological self-reliance.

Premier Li Qiang, the country’s No. 2 leader, in the annual government work report released Thursday, said China must “hone our own capabilities to navigate external challenges.”

With a record $1.2 trillion trade surplus last year, China’s growth has become increasingly reliant on exports, creating a global imbalance that has drawn criticism from its trading partners and global institutions such as the International Monetary Fund. Exports drove China’s economic expansion in 2025 to a degree not seen since 1997, according to government data.

Economists inside and outside the country have long called for China to shift its economy to one driven more by consumption and less by its formidable manufacturing and export machine. Such a shift could ease tensions with the rest of the world and give its people greater spending power.

But a significant rebalancing of China’s growth model would be difficult to achieve in concert with its longstanding goals of technological and manufacturing dominance.

China is entering the first year of its next five-year economic plan, in which officials have signaled an intent to stick with its current trajectory of solidifying its pre-eminence in advanced manufacturing and attaining technological self-sufficiency from the U.S.-led West.

Over the past five years, successive U.S. administrations have attempted to block China from accessing leading-edge American technologies, particularly in semiconductors. That has spurred Beijing to enhance its homegrown capabilities. Those efforts have underpinned China’s rise in electric vehicles, artificial intelligence, robotics and a host of other leading-edge technologies.

Though China’s tech prowess has become the envy of the world, much of its domestic economy has been struggling in a deflationary environment in which overproduction and insufficient demand have spurred a race-to-the-bottom competition that has eroded profits. Consumer and business sentiment has plunged, wage growth has stalled and youth unemployment is flirting with historic highs.

“Stabilization is the top priority,” said Yuhan Zhang, principal economist at the Conference Board’s China Center.

Li designated boosting domestic demand as the country’s top policy objective in 2026 for a second consecutive year and called for efforts to expand investment, an area which suffered an unexpected slowdown last year.

To support its goals, China set a fiscal deficit target of around 4% of GDP, in line with last year’s record deficit target, giving policymakers ample room to rev up government spending if needed. In addition to the official fiscal deficit target, officials have a host of other methods to boost government spending.

Notably, Beijing said it would unveil new financing tools to boost investment worth 800 billion yuan, equivalent to roughly $116 billion.

Meanwhile, the government said it aims to boost defense expenditure by 7.0% this year, compared with the 7.2% increase targeted in 2025, at a time when other countries such as the U.S. and many of its global allies, including Japan, plan to ramp up military spending.

On other fronts, it largely held steady. Local governments in China will be allowed to issue 4.4 trillion yuan in special-purpose bonds, which are used to fund investment projects. Beijing also plans to issue 1.3 trillion yuan worth of ultralong Treasury bonds. Both figures were in line with last year’s quotas.

China allocated 250 billion yuan in special bonds to continue its consumer goods trade-in program, intended to boost household spending, though the figure is lower than last year’s 300 billion yuan. It also set aside 100 billion yuan for consumer and business loans.

“On the export front, there’s a lot of uncertainty,” said Vicky Zhou, an economist at Australian bank ANZ, citing the conflict in the Middle East as an example. “That leaves China with no choice but to double down on consumption.”

Beijing set a consumer inflation target of around 2% for this year, unchanged from a year earlier. Last year, the consumer-price index was flat, reflecting sluggish demand in an economy where households are increasingly concerned about job prospects and the value of their homes.

The government also pledged to create more than 12 million urban jobs while aiming to keep the headline unemployment rate at or under 5.5%. Both goals are unchanged from last year, suggesting continuity even as a slowing economy raises the risks of increased social dissatisfaction.

With the development of AI set to disrupt economies around the world, Beijing said it would study and address the impact of AI on employment—including refining “early warning mechanisms”—while helping the workforce adapt to AI.

Setting the GDP target at a range of between 4.5% and 5% brings Beijing closer to the minimum level that it will need to sustain to meet one of its top political goals—namely, attaining the per capita GDP of a “midlevel developed country” by 2035. To attain that objective, GDP will need to average 4.17% growth or more over the next decade, according to an official Chinese guidebook published last year.

Kyiv has pioneered cheap and mass-produced machines to counter Russian versions of the Shahed attack drone

The Pentagon and at least one Gulf government are in talks to buy Ukrainian-made interceptors to fend off attacks by Iranian drones, according to industry figures in Ukraine.

Gulf states had been using expensive Patriot missiles to defend themselves from waves of Iranian Shahed drones in the days since the US and Israel launched their war. But their stocks are declining, and they are looking to Kyiv’s experience for cheaper defence against Russian drone barrages.

Ukraine has pioneered using mass-produced interceptors costing a few thousand dollars to destroy Russian versions of the Shahed, launched against Ukrainian cities in swarms. Shaheds cost a mere $30,000, while interceptor missiles like the PAC-3s used in the Patriot system cost more than $13.5mn each.

One Ukrainian official described the discussions with the Pentagon as a “sensitive” topic. “However, it is obvious that there is a surge in interest in the Ukrainian drone interceptors, which can intercept the Shahed for a very low cost.” A local industry figure said any sales of Ukrainian systems, even those made outside the country, would have to be in co-ordination with Kyiv.

Ukrainian President Volodymyr Zelenskyy said on Tuesday that he had been in contact with Sheikh Tamim bin Hamad al-Thani, the emir of Qatar, and Mohammed bin Zayed al-Nahyan, the president of the United Arab Emirates, about the use of Ukrainian anti-drone technology.

“Ukraine’s expertise in countering ‘Shahed’ drones is currently the most advanced in the world,” Zelenskyy said. “However, any such co-operation aimed at protecting our partners can only proceed without diminishing our own defence capabilities.”

The Pentagon did not respond to a request for comment.

Experts say Iran may have stockpiled tens of thousands of Shahed drones. It has launched hundreds since it was attacked by Israel and the US, using them mainly on Gulf states to sow terror and to use up adversaries’ surface-to-air and air-to-air missiles.

Because they are easy to hide and can be launched from anywhere, the Shaheds are less vulnerable to US and Israeli tactics that rely on destroying launchers and stockpiles of missiles on the ground before they are fired.

Kyiv has moved to using cheaper weapons such as anti-aircraft guns and machine gun trucks to take down drones including Shaheds, which Moscow has used against Ukraine since it launched its full-scale invasion in 2022. Ukraine has also since autumn been using fast-flying interceptors that can reach speeds of 250km/h, capable of catching a Shahed, whose top speed is 185km/h. 

So far Kyiv has not been able to field an effective interceptor for Russia’s new locally-produced, jet-powered Geran-3 drones, which fly at more than 550km/h. Moscow launched 54,000 of them at Ukraine last year, according to the Ukrainian defence ministry.

Kyiv is worried about its own supplies of anti-drone munitions. But it is betting that if Middle Eastern countries use its drone interceptors instead of the PAC-3 missiles for Patriot batteries, there will be more global supplies of PAC-3s left over for Ukraine, which needs them to defend against advanced cruise and ballistic missiles. 

Ukraine’s deployed drone interceptors include the Merops, a fixed-wing drone made by companies funded by former Google chief executive Eric Schmidt. Another bullet-shaped quadcopter known as Sting, made by Ukrainian company Wild Hornets, has been deployed off the coast of Odesa on Magura drone boats made by Uforce, a start-up.

General Cherry, another Ukrainian company, also makes a fast “Shahed hunting” interceptor drone. 

Iranian tactics in the Gulf mimic Russian tactics against the coastal city of Odesa, where Shahed drones skim the ocean on approach to avoid radar and confound missile interceptors. Drones deployed offshore had the best chance of intercepting them, said one Ukrainian expert.

Some interceptors are capable of using computer vision to lock on to a target, but others are remotely guided.

In Ukraine, “there are literally a dozen companies that make kinetic interceptors — little bullet-shaped quadcopters or fixed-wing drones — for a few thousand dollars apiece”, said one person familiar with the talks. 

Iranian Shahed drones were previously judged to be a mere nuisance, and not worth an expensive interceptor, but in some cases have caused real damage. A video on Saturday showed a Shahed destroying a satellite antenna at a US naval base in Manama, Bahrain.

“The fact that Shaheds are getting through at all, let alone a military base that is the ops centre for the entire Middle East, and in broad daylight, is astounding,” said one person who has served at the US Navy’s Fifth Fleet headquarters in Bahrain. 

Why Celine’s Michael Rider is creating a ‘hardworking wardrobe’

Luxury is in existential crisis. With a vision rooted in clothes, not fashion, can this American designer in Paris cut through the noise?

Fashion is full of people who think of little else. Michael Rider, the artistic director of French luxury house Celine, is not one of them. 

The 45 year-old American holds impeccable industry credentials, having worked for some of the most influential names in the fashion business: Ralph Lauren, where he oversaw womenswear for the Polo line and a major revival in its popularity; Phoebe Philo, for whom he was studio design director during her nine-year tenure as Céline creative director; and Nicolas Ghesquière, now of Louis Vuitton, but who Rider worked for as a senior designer at Balenciaga after relocating to Paris from New York two decades ago.

Since replacing Hedi Slimane at LVMH-owned Celine in 2024 — one of only a handful of hires during fashion’s great designer reshuffle who had never held a top creative director position before — Rider has garnered critical acclaim and commercial success with his fresh, fun and deceptively simple approach to luxury fashion design and merchandising, right at a time when the industry is grappling with how to entice disenchanted consumers into spending money again. 

But his résumé is also not a conventional one. A Brown University graduate, Rider spent his first years out of college working as a teacher in Oakland, California. After leaving Philo and Celine in 2017 he took a break from fashion, turning down desirable gigs to work with refugees caught up in Europe’s ongoing migrant crisis. And when he got the top job at Celine, setting the internet abuzz with curiosity, there was next to no information about him online. It would appear that Rider, who doesn’t have any social media presence, likes to do things his way.

Calm and unflustered at the Celine headquarters a few weeks before his womenswear show at Paris Fashion Week on March 7, he also appears to be taking the role — and the heavy responsibilities and expectations that come with it — in his stride.

“I like to know what’s going on everywhere, down to the inside of every sleeve,” Rider says. Tanned and lithe with tight curls, he looks younger than his years as he sits in a meeting room overlooking a grand courtyard at the Celine offices. “I owe it to everyone to be organised in the run-up to a show. Not just for my studio but the thousands of people in the supply chain whose work relies on the decisions we make in there. Fashion does a lot to not talk about that, but I’ve always liked being in factories. It is where I started out in this business back in New York. Sitting among the people making the things that people want people to love.” 

Celine’s next chapter

Celine, which was founded in 1945 by Céline Vipiana and her husband, occupies a critical if mutable niche in the French fashion landscape. After Louis Vuitton and Dior, it is a key brand in the LVMH group’s luxury fashion portfolio, with HSBC estimating annual revenues of around €2.5bn as of 2024. (LVMH, which acquired the brand in 1996, does not publicly break out revenues by brand.) It has also long represented cool and functional Parisian chic, offering covetable yet wearable clothes and accessories for those who can afford the hefty prices.

Under Philo — and Rider’s first time around at the house — Céline (it had an accent back then) felt attuned to a grown-up female gaze, with an aesthetic built on careful styling and oversized tailoring that attracted a devoted customer base. When Hedi Slimane took over in 2018, he didn’t just drop the accent off the first e in Celine and pull the brand off the official fashion week schedule; his vision was an in-your-face, skinny-jeaned, teenage rock ’n’ roll fever dream that divided critics but also doubled sales before he eventually left in 2024. So what was it about Rider — both in character and record — that made him the right man to write the next chapter?

“Michael has a background that naturally prepared him for this role. Having worked at the house he knows it intimately, and has brought together the differing legacies that shaped the house while bringing his own very personal vision,” Celine chief executive Séverine Merle writes over email. “Celine is not immune to the crisis that has affected luxury brands, but I am very confident in the house and its future.”

For Rider, the appeal of a second time around at Celine lay in the fact that the house roots are in wearable clothes. A key architect of the preppy revival that has dominated fashion lately, his bold, colourful collections are awash with strong-shouldered tailoring, second-skin leggings, quarter zips, logo-heavy T-shirts and sweatshirts and lots of layered belts. Also, cute miniskirts, sexy little black dresses, handbags with smiley-face zippers, and perfectly tied printed silk scarves. In other words, looks that don’t rewrite the rule book — or take themselves too seriously. But given their laser-like attention to detail and elevated finish, they could also become the cornerstones of a wardrobe for far more than one season.  

“When people use the word ‘wardrobe’ it can almost be pejorative or flat, but a good, hardworking wardrobe is at the core of feeling fashionable,” says Rider. “I don’t know what drove brands into a situation where everything had to get so extreme, so extremely extreme, but that’s never what really turns me on. The best creatives don’t make their fans slaves to trends — they offer a lasting idea of how to get dressed and how to put things together.”

Rider isn’t especially interested in fantasy fashion — you’ll never find him looking for inspiration from outer space. In his eyes, there are fashion designers who project big themes or theoretical ideas on to something, and then those for whom it’s all about themselves. He counts himself happily in the latter camp. He wants to see his vision reflected on and by the street.  

“Proud and squarely, it’s all about me and my sensibility. And by me, I also mean the studio,” he says. “It’s about all of us and what we are feeling and what it feels like to wear our clothes. We put them on and wear them out all the time.”

Despite an impish grin and quick wit, Rider is strongly driven by personal and professional pragmatism. Rather than offering endless pages of flowery show notes, he gives editors a sentence or two on collections if they are lucky (“I really struggle with pretension. The work speaks for itself, I hope”). He refuses to look at Instagram or TikTok, and only recently got an iPhone (“It’s not a political stance, if I dipped into the cesspool I’d drown”). And he is adamant that time spent away from the fashion whirl is essential for one’s character (he was spurred to teach refugees French after watching migrants gathering by the tracks from his Eurostar window).

“I recommend it to all my friends: get out of Paris for a bit,” Rider says at one point. “There’s a lot going on outside in the world beyond fashion week.”  

It’s refreshing to listen to, particularly given the luxury sector’s ongoing identity crisis and self-inflicted decline after years of skyrocketing prices, manufacturing scandals and loss of cultural cachet. There are some in the industry who feel Rider’s approach at Celine is more of the same: overpriced and lacking a true point of difference. A branded T-shirt costs around £500; a black minidress with a gold chain is £2,150, and one of its cornerstone bags, the Luggage, is £3,650. But those who track data and sales say otherwise. Alexandra van Houtte, chief executive of the fashion search engine Tagwalk, notes that many luxury clients want “clothes that feel current but aren’t fussy, that are not ostentatious and just do their job exceptionally well. Celine has found a strong position in the global luxury market within that space.” Harrods buying director Simon Longland adds that Rider’s impact “has been swift and overwhelmingly positive”.

“The client response has been immediate, particularly across leather goods,” he says, noting the Smile Luggage, Besace and Soft Triomphe and Trio Flap as standout performers. “In a highly competitive landscape, Rider is shaping a Celine that stands apart — defined not by trend, but a clear, confident point of view.”

‘I love valid critique’

Rider says that growing up in Washington DC, he always liked going out, making his own clothes and inhabiting different identities. “But I don’t know if I thought it was a serious contribution to the world. It took me a while to believe it could be.” 

After starting his teaching career, he decided that while he could always teach at 60, breaking into fashion later in life would be a tougher proposition. And so he moved to New York and started working in the then thriving Garment District. Every job he has taken since — and the legendary fashion characters he has worked with — taught him a very particular lesson that shapes his approach today. 

“Nicolas is an architect, Phoebe is a stylist and Ralph is a merchant. They’re all very different. But as designers, they had this instinctive thing they did way better than anyone else.”

According to Rider, the designer landscape today is a fraught one — not because of the designers themselves, but because of the way they are pitted against one another as if in some kind of gladiatorial arena. 

“Just before my debut, someone showed me some ticker board online pitting us against one another and with names going up and down based on social media likes, before anyone had even shown anything. I’d just never seen anything like that. That Thunderdome was a whole part of American culture I have expressly avoided,” says Rider. He calls out what he sees as “a lot of useless, self-congratulatory Kool-Aid” in the industry culture, especially around shows. 

“I’m not sick of the idea of new energy or blood. That’s what makes things turn in this business. But there was all this noise and nothing really was said,” Rider continues. “I love valid critique, bring it on. The rest is making everyone nuts.”

Paris may be home now (Rider’s husband, Emmanuel Morlet, is the head of knitwear at Dior). But alongside his extensive French training and experience, Rider’s American sensibility runs clearly through his work, bringing realism alongside refinement. The lifestyle-focused world-building of Ralph Lauren, who Rider says had never heard of Celine when he hired him for Polo, feels especially relevant to what is being produced now. Rider also points to the shifting goalposts around what defines a designer’s legacy; the Laurens and Armanis of this world were around for 40 years; these days, staying in a single creative director position for longer than a decade has become extremely rare. 

“Ralph doesn’t care about fashion but he’s obsessed with clothes,” says Rider, adding that explosive growth in luxury fashion is not — from a human or business perspective — sustainable, in his view. A powerful legacy comes from continuity. 

“I try to be a human being reacting to the world we are living in,” Rider says. “I also think it can’t be great if designers bob around every few years who are meant to be making beautiful and very expensive things with real value. My hope here at Celine is that I set the tone for something longer-lasting.” 

Household providers withdraw or raise tariffs after surge in wholesale costs

British household energy retailers are withdrawing or raising their fixed-price tariffs as the war in the Middle East sparks a surge in wholesale energy costs.

The number of such deals available fell from 38 on Saturday to 17 on Wednesday, according to data from USwitch, while the cheapest have climbed from £1,509 to £1,640 a year. 

The changes reflect suppliers’ nervousness over wholesale prices after UK gas prices jumped roughly 75 per cent between Friday and Tuesday. 

“It’s risk management,” said Nigel Pocklington, chief executive of Good Energy, which ditched its planned launch on Tuesday of a new fixed-price deal. “You don’t know where the price is going to go, nor how many people are going to sign up” to fixed deals.

Laura Hinton at Moneysupermarket Energy said suppliers were responding to new uncertainty, having previously expected relatively stable energy costs until a rise towards the end of the year. 

“As a result of this uncertainty, we’re seeing . . . fixed deals being withdrawn and repricing of tariffs,” she added.

Gas prices in Europe and Asia have climbed because of disruption to supplies from the Middle East, with the Strait of Hormuz virtually unpassable and Qatar’s gas infrastructure damaged.

The UK buys relatively little gas directly from the Middle East but is affected by price shocks as it has to compete with Asia and Europe for shipments.

Higher gas prices also push up UK electricity prices since gas-fired power stations still generate just under a third of the country’s electricity and are needed to meet demand most of the time. 

The withdrawal of fixed-priced tariffs has echoes of the energy crisis in 2021 and 2022 when gas prices leapt as economies rebounded from pandemic lockdowns and Russia launched its full-blown invasion of Ukraine. 

Suppliers pulled deals and consumers switched on to default variable tariffs, which are protected by the UK price cap on energy bills. 

While the price cap, which currently covers just over 60 per cent of the market, was fixed last week from April to June, consultancy Cornwall Insight on Wednesday forecast that it would rise by 10 per cent in July if current wholesale prices persisted. 

The latest shock to wholesale prices comes as the retail sector continues to grapple with the legacy of the 2021-22 shock, when dozens of retailers collapsed. 

Ofgem, Britain’s energy regulator, has since introduced tougher rules on capital adequacy although several suppliers, including Britain’s largest by customers Octopus Energy, are not yet meeting their targets. 

Meanwhile, amid persistent cost of living pressures, households owe a record £3.2bn to suppliers with no repayment arrangement set up as of the third quarter of 2025, according to Ofgem figures.

“We know people are worried about the impact of the conflict in the Middle East on energy prices and what this means for them,” Ofgem said. “Importantly in the short term, customers on a fixed tariff and those protected by the price cap will not see any immediate impact on their bills, as the price cap is already set until the end of June.”

Ned Hammond of trade group Energy UK said new fixed-price deals “have to reflect the latest price movements, and given the current price volatility it is very challenging for suppliers to price deals for the next 12 months and beyond”. He added: “As always, any customer concerned about their current situation should reach out to their supplier to discuss options available to them.”

Prices have jumped and exports been hit as war puts pressure on one of the world’s largest producers

The conflict in Iran is disrupting fertiliser production and exports in the Middle East, tightening global supplies and raising fears of higher food prices, industry executives and analysts have warned.

The Middle East is one of the world’s largest fertiliser producers, while the Strait of Hormuz is a crucial shipping route for exports. About 35 per cent of global urea exports pass through the waterway, according to CRU data. Urea is the most widely used nitrogen fertiliser, which in turn underpins around half of global food production.

The route also handles 45 per cent of global sulphur exports, a key ingredient used to produce phosphate fertilisers, as well as significant volumes of ammonia, a key ingredient for nitrogen fertilisers.

“We shouldn’t underestimate what this potentially could mean for global food production,” said Svein Tore Holsether, chief executive of Europe’s largest fertiliser group Yara.

He added that the focus on oil and gas was “overshadowing” the impact on the fertiliser industry. “If you’re not getting [fertiliser] into the field of the farmers, yields could go down by up to 50 per cent in the first harvest,” he said.

If the disruption continues, consumers could see higher prices for bread within six to 10 weeks, eggs within a few months and pork and broiler chicken within six months, estimates Raj Patel, food system expert at the Lyndon B. Johnson School of Public Affairs. 

Fertiliser prices have already jumped sharply. Granular urea prices in the Middle East have risen by about $130 to around $575-650 a tonne since Friday, while Egyptian export prices have climbed by around $125 to around $610-625 a tonne over the same period, according to Argus.

European ammonia futures have also surged, with a 1,000 tonne April cargo trading at $725 a tonne — about $130 higher than when the contract last traded in mid-February.

Analysts say the disruption could prove even more damaging than the food shock triggered by Russia’s invasion of Ukraine in 2022, when energy and fertiliser costs surged and global food prices hit record highs.

“When prices spiked in 2022 it was extraordinary, but the market was able to adjust because Russian exports continued,” said Chris Lawson, head of fertilisers at CRU, adding that the “big difference” this time was that a blocked Strait of Hormuz was a physical barrier.

The impact on food in 2022 was more immediate because Ukraine was a major wheat exporter, said Patel, but “this time around the impact will be far more widespread”.

The disruption is already affecting production. QatarEnergy, which exported 5.4mn tonnes of urea or close to 10 per cent of global seaborne trade last year, said on Monday it had halted sulphur, ammonia and urea output at its Ras Laffan complex following a drone attack on the site a day earlier. 

Iran had taken all of its ammonia production offline because of the conflict, while producers elsewhere in the region were considering cutting output as vessels are unable to pass through the Strait of Hormuz, said Sarah Marlow, global head of fertiliser pricing at Argus.

Energy prices are also adding pressure. Natural gas is the key feedstock used to produce nitrogen fertilisers such as ammonia and urea, meaning surging gas prices can rapidly raise production costs.

Holsether said the price of gas used by Yara to produce fertiliser in Europe had doubled from $10.6 per mmbtu on Friday to more than $20 by Monday. 

The disruption is hitting at a particularly sensitive moment for farmers. In parts of Europe and the northern hemisphere, growers are entering the spring fertiliser application season, when they purchase and spread nutrients that determine crop yields later in the year.

“What I’m worried about is, like what we saw in 2022, that it’s the most vulnerable that pay the highest price,” said Holsether. “We saw what that meant — hunger and famine in many parts of the world.”

Shipowners quoted millions of dollars in premium as brokers grapple with risk

The cost of insuring a ship sailing through the Strait of Hormuz has soared 12-fold, even after Donald Trump vowed to backstop trade through the key oil chokepoint.

Shipowners have been quoted millions of dollars for cover to cross the Strait or sail in nearby high-risk waters, brokers said, as premiums jumped as high as 3 per cent of the cost of a ship on Wednesday, up from about 0.25 per cent before the war.

The US president said on Truth Social that the US Development Finance Corporation would provide insurance and guarantees “at a very reasonable price . . . for the Financial Security of ALL Maritime Trade, especially energy, travelling through the Gulf”. 

London insurers were racing on Wednesday to understand how the proposal might work and whether it could help bring down prices. Several of the world’s largest insurance brokers said they were blindsided by Trump’s announcement.

“We’ve heard absolutely nothing more, other than that Truth Social statement,” said David Smith of specialist broker McGill, adding that insurers were unsure how broadly the support would apply, despite the pledge to insure “all” trade through the Gulf.

“Would it apply, for example, to a cargo of Chinese oil carried on a European tanker?” Smith said. “We don’t know.”

Other maritime experts questioned how much help could come from the DFC, whose main role is facilitating private investment in poorer countries, when freight costs and the risk of attack — rather than insurance availability — were the main worries for shipowners operating in the region.

“It might have been a way to take the edge off the oil price,” Ed Finley-Richardson, a shipping investor and founder of Contango Research, said of the DFC announcement, “but on the face of it I don’t see how it changes anything. We already have insurance.”

Brent crude dipped slightly on Trump’s announcement but remains 26 per cent higher than the start of the war at about $81 a barrel.

The cost of insuring ships travelling near the Middle East has soared since insurers over the weekend began notifying clients that they were cancelling their war-risk insurance policies.

Some insurers had cancelled policies in order to reinstate cover at higher prices more reflective of current risk levels, brokers said, but others had exited the market and many were refusing to provide cover through the Strait, where traffic has in recent days ground to a halt.

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At least seven tankers have been struck in the Strait and surrounding waters since Sunday, and ships have reported receiving radio messages, apparently from the Islamic Revolutionary Guard Corps, telling them to stay out of the waterway. 

Typical prices in the high-risk region now ranged from 1 to 1.5 per cent of the cost of a ship, while ships linked to the US, UK and Israel had been quoted prices as much as triple those rates, Marsh broker Dylan Mortimer told the FT.

Trump added on Truth Social that “If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible.”

Naval escorts would help reduce the threat for the ships being protected, marine security experts said, but providing protection for all tankers operating in areas currently threatened by Iran could be unrealistic as it would require a very high number of warships and other military assets.

US naval ships would also be at risk if they move into the Strait before Tehran’s navy is significantly degraded, said one maritime security adviser, who asked not to be named. “Their fear is that if they put a warship into that area, every single Iranian missile will be fired at it. They will be overwhelmed entirely.”

INDEX REBALANCING MONITOR — Q1 2026

FTSE 100 · DAX 40 · FTSE MIB | Effective 20–23 March 2026

Announced week of 2–4 March 2026

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CONFIDENTIAL — FOR PROFESSIONAL INVESTORS ONLY

Sources: LSEG/FTSE Russell, ISS STOXX/Deutsche Boerse

As of: 4 March 2026

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SUMMARY

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INDEX ADDITIONS DELETIONS EFF. DATE