Europe’s current energy stress looks serious in oil, but far less severe in electricity, and that difference is one of the most important features of the 2026 shock. The continent is unquestionably dealing with an oil and gas disruption linked to the Iran war and the effective closure of the Strait of Hormuz, yet wholesale power markets have so far remained far calmer than they were during the 2022 crisis triggered by Russia’s invasion of Ukraine.

French one-year forward power prices were around €50 per megawatt hour, roughly unchanged from prewar levels and vastly below the August 2022 peak above €1,100/MWh, while similar markets in Germany, the UK, Italy, and Spain have also stayed much closer to normal than they did four years ago.

Global markets are still behaving as though the Iran war is serious but manageable, with investors choosing to focus on earnings strength and the AI-led profit cycle rather than fully repricing the geopolitical shock. Stocks rose on Tuesday, with the S&P 500 up 0.6%, the Nasdaq up 0.9%, and Europe’s STOXX 600 up 0.5%, as strong results from companies such as Anheuser-Busch and UniCredit helped offset renewed concern over Gulf hostilities.

At the same time, Brent crude remained extremely elevated at $111.27 a barrel even after pulling back from levels near $115 the day before, when renewed fighting pushed prices sharply higher. The immediate market message is that investors are still splitting the world into two separate stories.

The Trump administration’s threat to impose 100% tariffs on branded medicines is already reshaping the pharmaceutical industry well before full enforcement begins. Washington is moving toward tariffs on patented drugs that are neither produced in the United States nor covered by pricing agreements, while delaying enforcement for companies that commit to U.S. manufacturing or drug-price concessions.

That has triggered a rapid industry response: large drugmakers are accelerating domestic investment plans, building inventory buffers, and in some cases striking pricing deals to secure temporary exemptions. What makes this especially significant is that the policy is not operating like a conventional tariff alone. It is being used as an industrial-policy lever and a pricing-policy lever at the same time.

The Trump administration is now signaling that its threat to raise tariffs on EU car imports from 15% back to 25% is not just negotiating theater. U.S. Trade Representative Jamieson Greer told EU and German officials over the weekend that Washington would move forward with the increase, while also describing the tariff as “one part of the deal,” suggesting the administration still sees it as leverage inside a broader bargaining framework rather than a fully settled end state.

As of Monday afternoon, the higher tariff had not yet been formally adopted. The immediate dispute is about alleged EU non-compliance with last summer’s trade deal, a claim Brussels rejects. Trump said the bloc had failed to uphold the agreement and that EU officials responded by calling the move arbitrary and warning that they would keep options open to defend European interests.

China’s carmakers are moving into a new phase of their global expansion, one that is less about simply shipping low-cost vehicles overseas and more about trying to become genuinely local competitors in foreign markets. Major groups including BYD, Chery, Changan, SAIC’s MG, and FAW’s Hongqi are now developing models specifically for export destinations rather than merely adapting cars originally designed for Chinese buyers.

The comparison many in the industry are making is Toyota’s Yaris, a small car designed in Europe for European consumers that helped the Japanese company build lasting credibility on the continent.

Europe’s investment banks are increasingly being squeezed between structural weakness at home and renewed regulatory advantage for Wall Street. The latest quarterly results underline that the problem is not simply one bad stretch of trading.

BNP Paribas, Deutsche Bank, and Societe Generale all delivered either flat or weaker investment-banking performance, while U.S. giants such as JPMorgan and Morgan Stanley posted record revenues as market volatility linked to the Iran war boosted trading activity. UBS stood out as the main European exception, with investment-bank revenue up 27%, helped by what its finance chief described as a more capital-light approach.

Asian thermal coal has risen since the Iran war began, but the move has been relatively restrained because the region has not yet shifted into a full-scale coal-for-gas substitution cycle. Newcastle high-grade coal ended the week to May 1 at $130.81 a ton, up 12.6% from before the war, while mid-grade Australian coal rose 11.7% to $96.79 and lower-grade Indonesian coal gained 11.6% to $61.82.

Those are meaningful moves, but they are modest compared with the 2022 shock after Russia’s invasion of Ukraine, when coal prices surged as much as 78%. The key reason is that the LNG shock has been absorbed unevenly across Asia rather than triggering a universal scramble for replacement cargoes. Much of the decline in Asian LNG imports since the war began has been concentrated in China, which has leaned more heavily on domestic gas, pipeline imports, and domestic coal.

Brussels is preparing to ease carbon-cost pressure on heavy industry by increasing free emissions permits over the next few years, a move that would amount to a meaningful shift in how the EU balances climate ambition against industrial competitiveness.

Under an internal Commission draft, industries would receive around €4 billion worth of additional free CO2 allowances between 2026 and 2030 because Brussels plans to start counting indirect emissions, not just direct emissions, when calculating free allocations. The proposal is designed to use existing flexibilities in the EU Emissions Trading System rather than rewrite the whole framework immediately.