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The European Commission announced on Friday that European Union countries would need 241 billion euros ($278 billion) in investments to expand nuclear energy. 

The Commission also stated that new funding instruments would be necessary to mitigate the substantial financial risks for private investors, according to a Reuters report.

Expanding capacity and lifespan

The Commission’s draft analysis of investment needs for the nuclear power sector, anticipated for publication on Friday, indicates that EU countries aim to increase their nuclear power capacity to 109 gigawatts by 2050.

This represents an increase from the current 98 GW.

These initiatives specifically target the expansion and maintenance of nuclear energy infrastructure, recognising its potential as a reliable, low-carbon power source.

The proposed investments are estimated to be a staggering 205 billion euros dedicated to the construction of new nuclear power plants. 

This considerable sum reflects the high capital expenditure associated with developing advanced reactor technologies and establishing new facilities, including site preparation, complex engineering, and long construction timelines. 

These new plants are envisioned to significantly augment existing power generation capabilities, contributing to national energy security and climate change mitigation goals.

In addition to building new capacity, a substantial allocation of 36 billion euros is earmarked for extending the operational lifespan of existing nuclear reactors. 

This investment is crucial for maximising the return on previously deployed assets and ensuring a stable, uninterrupted supply of electricity while new plants are being developed. 

Financing

Life extension programs typically involve comprehensive maintenance, component upgrades, and safety enhancements to ensure these facilities continue to operate safely and efficiently beyond their initial design life.

The draft outlines that these monumental investments will be sourced from a combination of public and private funds.

This collaboration aims to leverage both public resources and private sector expertise and capital to facilitate the timely and efficient execution of these critical energy infrastructure projects. 

Approximately 24% of the EU’s electricity last year was generated by nuclear power.

The Commission stated that additional financial instruments were required to attract private investors, who are deterred by the risks and substantial upfront costs associated with recent European nuclear projects that have experienced budget overruns and significant delays.

It noted that a five-year delay in planned new projects would increase their estimated cost by an additional 45 billion euros by 2050.

The Commission was quoted in the report as saying:

A combination of diverse sources of financing complemented by de-risking instruments may be the response.

EU’s nuclear divide

Disagreement has long persisted among EU countries regarding the promotion of nuclear power to meet CO2 emissions targets. 

The debate is primarily fueled by France, where nuclear power is the leading electricity source, and Germany, which had previously opposed it under past administrations.

Consequently, EU energy policies have generally avoided singling out nuclear power with specific incentives or targets. Additionally, the EU budget does not allocate funds for the construction of new nuclear power plants.

A 500-million-euro pilot program for power purchase agreements, open to nuclear projects, will be initiated by the European Investment Bank and the Commission, according to the draft document.

Out of 27 EU member countries, twelve currently operate nuclear reactors, with France possessing the largest fleet. Slovakia and Hungary are in the process of constructing new reactors. 

Meanwhile, nations like Poland are looking to develop their first nuclear plants.

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The latest escalation in tensions in Iran has paved the way for the return of risk premiums on oil prices once again

At one point on Friday, Brent crude oil prices had jumped more than $8 per barrel to hit its highest level since late January. 

Israel initiated strikes on early Friday, targeting Iranian nuclear facilities and military objectives.

These attacks come at a time when the US and Iran are holding ongoing nuclear talks.

While recent discussions showed little progress and a wide gap between both sides, talks were scheduled to resume this weekend

However, given the latest developments, it’s uncertain if they will proceed. The US has also clarified its non-involvement in the strikes against Iran.

“This is a significant escalation and differs from the strikes we saw last year, which spared Iranian nuclear sites,” Warren Patterson, head of commodities strategy at ING Group, said in a note. 

This escalation will only exacerbate uncertainty and heighten the risk of disruptions to regional energy supplies.

“While there are no reports of disruptions to oil supply, the market needs to start pricing in a larger risk premium,” Patterson added.

How much supply is at risk?

Iran is a meaningful oil producer, pumping more than 3 million barrels per day of crude oil, according to data from the Organization of the Petroleum Exporting Countries. 

The country also exports in the neighbourhood of 1.7 million barrels daily, according to ING. 

“In a scenario where we see further escalation, it’s not too difficult to envisage a situation where Iranian oil supplies are disrupted,” Patterson said.

Most of Iran’s oil exports are gobbled up by China. However, recent data from Bloomberg showed that Iran’s exports to China fell below the 1 million barrels per day mark for the first time in six months in May. 

Carsten Fritsch, commodity analyst at Commerzbank AG, said recently:

Due to tighter US sanctions, independent refineries are also likely to have refrained from importing Iranian oil, even if there is no official data on this from China. 

Nevertheless, if oil exports from Iran are affected, it could send the oil market into a deficit from a surplus in the second half of the year, ING said. 

“This scenario could see Brent spiking to $80/bbl, although we believe prices will likely settle around $75/bbl,” Patterson added. 

The Strait of Hormuz route at risk

Continued escalation could disrupt shipping in the Strait of Hormuz as well, which is an important route for trade. 

The Strait of Hormuz is a critical chokepoint for global oil supplies, with nearly a third of all seaborne oil trade passing through it. Any disruption to this strait would significantly affect oil flows from the Persian Gulf.

Patterson said:

While some portion of oil flows could be diverted to avoid the Strait, it still leaves roughly 14m b/d of oil supply at risk.

Prices could reach $120 per barrel if these flows are significantly disrupted, according to him. Additionally, if these disruptions persist through the end of the year, prices could even hit record levels of $150 a barrel. 

Disruptions to shipping via the Strait of Hormuz could severely impact the global LNG market as well. 

Qatar, accounting for approximately 20% of global LNG trade, relies entirely on this route for its exports, lacking any alternative. 

Such a scenario would drastically tighten the global LNG market, leading to a substantial increase in European gas prices.

Making up any supply shortfall

Should significant supply disruptions occur, governments globally would likely access their strategic petroleum reserves. 

This initiative would undoubtedly be spearheaded by the US, given its strategic petroleum reserve holds over 400 million barrels of crude oil.

An alternative solution involves OPEC utilising its spare production capacity, which exceeds 5 million barrels per day. 

While OPEC is already in the process of restoring supply, a disruption to Iranian supply could accelerate the pace at which this capacity is brought online.

Eight members of OPEC+, including Saudi Arabia and Russia have been increasing production by 411,000 barrels a day since May. It is scheduled to raise output by the same amount in July as well. 

The summer months of May to August provide strong demand fundamentals, which supports such increases from OPEC. However, experts at Rystad Energy believe that post these months, the market would struggle to absorb such increases. 

Source: Rystad Energy

“The only way OPEC+’s increase is possible is either if there is significant disruption in supply somewhere or non-OPEC+’s growth stalls,” Priya Walia, vice president, oil at Rystad Energy had said in a recent emailed commentary. 

However, she also said that the actual increases in OPEC+ production is much less. 

Overall, our estimates indicate that the actual flow of expert barrels is likely to be lower than announced production increases, which would lead to real impacts on the market.

Further complications

While OPEC can cushion the market against a loss of Iranian oil supply, the situation becomes more challenging if tensions escalate.

Most of the spare production capacity is located in the Persian Gulf.

“So, if we are seeing disruptions to oil flows through the Strait of Hormuz, this spare production capacity will be of little help to the global oil market,” ING’s Patterson said. 

Due to the Strait’s critical role, any disruptions would necessitate a globally coordinated effort to maintain consistent energy flow through this vital chokepoint.

At the time of writing, the price of West Texas Intermediate crude oil was around $73.63 per barrel, up more than 8%. Brent prices on the Intercontinental Exchange was up 8% at $74.77 a barrel, its highest level since January.

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Following significant growth in 2024, the US battery energy storage (BESS) market is experiencing a nationwide boom this year.

Declining battery manufacturing costs are a key factor in the rapid expansion observed. Rystad Energy forecasts this downward trend to persist for the next five to seven years, driven by continuous design enhancements.

While lawmakers consider rescinding tax incentives for low-carbon energies, creating policy headwinds for renewable energy investment, the grid-scale BESS market is currently unaffected.

Rystad Energy predicts an increase in the installation rate to approximately 16 GW per year by early 2026, indicating a continuation of this growth.

“As energy demand rises in the US due to increased electrification, grid resilience will continue to be critical, with batteries playing a key role in meeting this need, along with both traditional and renewable energy sources,” Artem Abramov, head of new energies at Rystad Energy, said in a release.

In 2024, the US grid-scale BESS market experienced substantial growth, with installations reaching 10 GW. This represents approximately a 60% increase from the 6 GW of capacity added in 2023, according to Abramov.

Planned inventory is a very strong leading indicator of actual capacity additions and we believe this rate of growth will create increased annual battery demand for grid-scale BESS.

States with highest level of BESS market

Texas and Arizona are experiencing the highest growth in the BESS market, while the California market saw stabilization last year.

By 2024, Texas had emerged as the largest US BESS market, with an installation rate of approximately four GW per year, comparable to California’s, according to Rystad Energy. 

In the past year, Texas has seen a substantial increase in its BESS inventory, rising from 5 GW to over 7 GW. 

This contrasts with California and suggests a probable continued rise in installations throughout the current year in Texas.

“Notwithstanding the growth in Texas, it is the rest of the country that is currently experiencing a BESS boom,’ the Norway-based energy intelligence company said. 

Currently, BESS inventory in emerging US markets, led by Arizona, stands at seven GW, a significant increase from the three GW recorded in the second quarter of last year.

Source: Rystad Energy

Batteries becoming significant power source

In established markets, batteries are becoming vital during peak power demand, effectively extending solar energy availability into the evening.

Batteries have fulfilled 13% of the power demand within the California Independent System Operator (CAISO) during their discharge hours over the past 90 days, Rystad said.

Although the trend is new, the days of batteries delivering more than 16% of electricity during discharge hours are becoming increasingly common.

During discharge hours, the average contribution is approximately 13%, but the peak contribution often reaches nearly 30%, it added.

The current 90-day average peak hour contribution has increased by 10 percentage points over the last 12 months, now reaching 26%.

Renewables

“Looking at the share of CAISO power demand satisfied by renewables – mainly solar, wind and hydro – we observed that the annual average increased from less than 30% in 2021 to more than 40% in the last 12 months,” Rystad said.

Renewable energy’s contribution continues to grow, peaking in spring to meet over 65% of daily demand on certain days in 2025, the data showed. However, its winter contribution remains consistent, supplying only 20-25% of demand.

Over the past four years, renewables integration has led to a significant reduction in CAISO’s reliance on energy imports, decreasing from approximately 27% to 16% of total system demand, according to Rystad. 

“As both BESS and solar PV installed capacity continue to grow in California, it is important to remember two things in particular: which power system challenges are being addressed by batteries, and what batteries cannot really help with,” Abramov said. 

Whether it is theoretically possible to have all renewable plus BESS systems in CAISO and what kind of overbuild – and economic implications for project developers and end consumers – will be associated with it remains to be seen.

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The long-simmering, complex conflict between Israel and Iran, a defining feature of the Middle East for decades, has violently erupted into a new and perilous phase.

Previously characterized by indirect attacks and proxy engagements, the hostilities have dramatically escalated, culminating in Israel’s reported airstrikes on Iranian military targets and its nuclear program on June 13.

This audacious move, which included the targeting of scientists and generals and reportedly killed the head of the Islamic Revolutionary Guard Corps, Hossein Salami, has pushed the two regional powers dangerously close to open warfare.

For years, Israel and Iran engaged in a shadow war, a series of mostly quiet, often deniable attacks, with Iran frequently operating through allied proxy groups.

However, this fragile equilibrium began to unravel following the outbreak of war between Israel and the Iran-backed Palestinian group Hamas in October 2023.

Since then, isolated incidents of direct fire, utilizing missiles and drones, have punctuated the escalating tensions.

The June 13 Israeli airstrikes, which caused explosions in the Iranian capital, Tehran, represent a major escalation.

In response to its own “pre-emptive strike,” Israel declared a state of emergency, bracing for the anticipated retaliation that Iranian officials have warned would follow any attack on its assets.

With a renewed global focus on Iran’s nuclear capabilities, the specter of open warfare looms large.

Israel, widely believed to possess its own nuclear arsenal, has long viewed a nuclear-armed Iran as an existential threat.

A friendship shattered: the roots of enmity

The current animosity starkly contrasts with a period of alliance between Israel and Iran that began in the 1950s under Iran’s last monarch, Shah Mohammad Reza Pahlavi.

This friendship abruptly ended with the 1979 Islamic Revolution in Iran.

The new clerical leadership in Tehran adopted a fiercely anti-Israel stance, calling for its destruction and denouncing the Jewish state as an imperialist power in the Middle East.

Since then, Iran has consistently supported groups that actively fight Israel, most notably Hamas, Hezbollah in Lebanon, and the Houthi rebels in Yemen—all designated as terrorist organizations by the United States.

For Israel, the prospect of Iran obtaining nuclear weapons is an overriding security concern.

Israeli officials have repeatedly implied that if Iran were on the verge of weapons capability, Israel would take pre-emptive military action, much as it did when it struck a reactor in Iraq in 1981 and an alleged Syrian nuclear site in 2007.

A history of direct confrontation

Prior to the latest Israeli offensive, the two nations had already exchanged direct blows for the first time in April 2024.

Iran launched a massive missile and drone attack on Israel, a move precipitated by an airstrike two weeks earlier on Iran’s diplomatic buildings in Damascus, Syria—an attack widely attributed to, though not officially acknowledged by, Israel.

While Iran’s April assault caused minimal damage and prompted a more limited Israeli counter-assault, this direct head-to-head fighting marked a dangerous precedent, moving their conflict into a more overt and perilous phase.

Further escalating the direct conflict, Israel assassinated Hamas’s political leader, Ismail Haniyeh, in Tehran in July of the same year.

Another round of missile attacks and airstrikes was exchanged by both sides in October.

Military might: a tale of asymmetry and ambition

In a conventional military comparison, Israel’s forces possess a significant technological advantage over Iran’s.

This is partly due to substantial military and financial support from the United States, which has long sought to ensure Israel’s qualitative military edge.

Israel is the only Middle Eastern state to have acquired Lockheed Martin Corp.’s F-35 stealth fighter jet, the world’s costliest weapons system.

It is also widely, though unofficially, understood to be a nuclear-armed state.

Iran, conversely, has long been suspected of harboring ambitions to develop nuclear weapons under the guise of its civilian nuclear power program—an ambition it consistently denies.

The country’s reserves of highly enriched uranium have been growing and could, according to experts, be quickly purified to the 90% level typically used in nuclear weapons if its leadership chose to do so.

However, Iran would still need to master the complex process of weaponizing the fuel to produce an operable device capable of hitting a remote target.

Decades of sanctions and political isolation have hampered Iran’s access to foreign military technology, compelling it to develop its own indigenous weapons capabilities.

Its combat aircraft fleet largely consists of older models acquired before the 1979 revolution.

Iran hopes to upgrade its military through increased collaboration with Russia, having agreed to purchase Sukhoi Su-35 fighter jets, although the delivery status of these aircraft remains unclear.

Despite its technological disadvantages, Iran’s military is believed to possess a significant stockpile of ballistic and cruise missiles, as well as a large fleet of relatively inexpensive unmanned aerial vehicles (drones), which it deployed against Israel in its 2024 assaults.

However, as those attacks demonstrated, penetrating Israel’s formidable, multi-layered air defenses is a significant challenge.

Israeli defenses include advanced fighter jets, the Arrow and David’s Sling air-defense systems, which, in conjunction with US and other allied forces in the region, reportedly intercepted 99% of the more than 300 drones and missiles Iran fired in the April 2024 barrage, according to Israel’s military.

Iran’s own defensive capabilities include surface-to-air missile systems, such as Russia’s S-300, and the locally made Arman anti-ballistic missile system.

These systems are not nearly as battle-tested as Israel’s, a reflection of Iran’s preference for asymmetric warfare, where it can project outsized power, over direct conventional combat. Both nations also possess cyberwarfare capabilities.

Over a decade ago, the Stuxnet malware, widely suspected to be a US and Israeli operation, compromised operations at an Iranian nuclear enrichment facility.

According to a US Defense Intelligence Agency assessment released last year, Iran is capable of “a range of cyber operations, from information operations to destructive attacks against government and commercial networks worldwide.”

Past cyberattacks attributed to Iran include a hack targeting Israeli water infrastructure, as noted by the Council on Foreign Relations.

The challenge of striking Iran’s nuclear program

An Israeli air attack specifically targeting Iran’s nuclear program would be an extreme and logistically complex operation.

Iran’s atomic sites are numerous, geographically dispersed, and, in recent years, many key assets have been moved deep underground to protect them from attack.

This has not deterred smaller-scale sabotage operations routinely attributed to Israel, including the assassinations of five Iranian nuclear scientists in Tehran since 2010 and an explosion at a key enrichment facility in 2021, for which Iran blamed Israel.

Israel claims to have destroyed most of Iran’s air defenses and much of its missile-making capacity in the October 2024 exchange.

If these capabilities have indeed been significantly neutralized, Israel would face considerably less resistance in a solo attack.

However, intelligence officials have cautioned that even a successful strike on Iran’s nuclear facilities might only delay, not definitively destroy, the country’s ability to eventually manufacture an atomic weapon.

Moreover, any such attack would be complicated by the operational requirements for Israel’s most advanced fighter jets, which would likely need aerial refueling to strike targets in Iran and return safely.

A senior Iranian military official responsible for protecting the country’s nuclear program stated in April 2024 that Iran would retaliate in kind if Israel targeted its assets.

He also hinted that even the threat of such an attack could push Iran to reconsider its stated policy of a peaceful nuclear program.

A web of alliances: regional and global alignments

Iran’s most crucial allies are the Shiite militias it supports with funding, weapons, and training in Lebanon (Hezbollah), Yemen (Houthis), and Iraq.

Hezbollah had long been the most formidable of these, but its recent clashes with Israel since the start of the Gaza war, including an Israeli ground incursion into Lebanon, have reportedly left it seriously weakened.

Tehran also lost its only state ally in the Middle East, Syria, with the fall of President Bashar al-Assad in December 2024.

Yemen’s Houthi rebels would likely be eager to participate in any wider conflict between Israel and Iran.

Since the start of the Israel-Hamas war, the Houthis have been launching ballistic missiles and drones at Israel, in addition to attacking commercial shipping in the Red Sea.

A Houthi drone strike in central Tel Aviv in July 2024 resulted in a fatality, the first deadly attack of its kind on Israeli soil. In early May 2025, a Houthi missile struck near Israel’s main airport, leading numerous foreign airlines to suspend flights.

Iran also maintains warm relations with Russia, although Russia’s ongoing war in Ukraine would likely limit its capacity to provide substantial assistance in a new conflict.

The Islamic Republic also has good ties with China, which has continued to purchase Iranian oil despite US and allied sanctions.

Israel, on its part, counts the United States and the United Kingdom as its key allies. Forces from both countries assisted in intercepting some of the missiles and drones Iran launched at Israel in 2024.

The US military also announced measures to bolster its presence in the Middle East, deploying additional ships, fighter planes, and ballistic missile defense vessels.

Nevertheless, the Israeli operation poses the first major foreign-policy crisis of US President Donald Trump’s second term, particularly as he had reportedly urged Israeli Prime Minister Benjamin Netanyahu not to proceed with such a strike.

The Arab states: a precarious balancing act

Many Arab states in the region find themselves in a difficult position.

Four Gulf Arab countries normalized relations with Israel in 2020 through the Abraham Accords, partly driven by a shared distrust of Iran.

However, these same countries have also sought to mend ties with Tehran as they focus on domestic economic growth and navigate a perceived US disengagement from the region.

Unlike during previous periods of tension over Iran’s nuclear program, this time they are publicly backing diplomatic solutions.

Iran and Saudi Arabia restored diplomatic relations in 2023 after a seven-year freeze.

Saudi Arabia has previously explored normalizing ties with Israel as part of a broader deal involving US security guarantees and would likely try to avoid becoming entangled in an Israel-Iran conflict.

It is considered unlikely that any Arab state would overtly side with Israel in a direct confrontation against a fellow Muslim country, especially one as powerful as Iran.

That said, an Israeli strike on Iran might only require their tacit acquiescence for Israeli jets to transit through their airspace.

The unfolding situation presents a complex geopolitical chessboard with potentially far-reaching consequences.

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Iran will not be participating in the nuclear negotiations with the United States scheduled on Sunday, the country announced on state television on Friday in the wake of Israel’s airstrikes on Iran’s nuclear program and ballistic missile sites this morning.

Iran has also launched retaliatory attacks with Israel claiming the country has launched over 100 drones in the last few hours. 

Explosions were reported across Tehran, the central city of Natanz—home to one of Iran’s major nuclear enrichment plants—and several other locations.

Israeli Prime Minister Benjamin Netanyahu declared that Israeli forces had “struck at the heart of Iran’s nuclear enrichment program,” claiming they had also eliminated top Iranian military figures.

Among those reportedly killed in the strikes were Mohammad Bagheri, Iran’s Chief of Staff, and Hossein Salami, commander of the Islamic Revolutionary Guards Corps (IRGC), according to both Israeli authorities and Iranian state media.

Former US President Donald Trump, who withdrew the US from the original 2015 nuclear agreement during his first term, had expressed concern over the timing of the Israeli strikes.

“I worry this could blow the negotiations,” Trump said Thursday, adding that he had ordered some American personnel to evacuate the Middle East in case of Iranian counterstrikes that “could include missiles flying into their buildings.”

Iran has retaliated with over 100 drones, Israel claims

As news of the airstrikes broke, Iran launched a retaliatory barrage, with Israel claiming over 100 drones were deployed in response.

Air raid sirens reportedly sounded in several Israeli cities, though details of the damage remain sparse.

The situation has cast a shadow over the US-Iranian diplomatic efforts.

Negotiators from both countries were set to meet in Oman for the sixth round of discussions aimed at reviving the 2015 nuclear deal, which imposed strict limits on Iran’s uranium enrichment in exchange for sanctions relief.

However, with Iran pulling out of the talks, the future of diplomatic engagement appears increasingly uncertain.

The talks had already been strained over whether Iran should be allowed to continue enriching uranium on its own soil—a right Tehran insists is non-negotiable.

IAEA confirms Natanz hit, but no radiation leak

The IAEA confirmed that the Natanz nuclear facility, a critical site for Iran’s uranium enrichment, had been struck but reported no abnormal radiation levels.

Iran’s Bushehr nuclear power plant, the country’s first civilian nuclear facility, was not targeted in the attacks, Iranian officials told the watchdog.

Natanz, located about 150 miles south of Tehran, houses Iran’s most advanced centrifuges and has long been viewed by Western and Israeli intelligence agencies as a focal point of its nuclear ambitions.

“The type of concrete that (the Iranians) use is actually a very specialized, hardened concrete,” CNN military analyst Cedric Leighton said.

“It’s unclear whether Israel’s bombs can penetrate that type of concrete,” he said, adding that the Israelis would have to mount waves and waves of attacks.

Visual evidence from the scene showed thick plumes of smoke rising above the complex, though the full extent of the damage remains unclear.

Why does Israel oppose Iran’s nuclear activities?

Israel has long opposed any scenario where Iran could obtain a nuclear weapon.

The enmity between the two countries dates back to the 1979 Iranian Revolution and is exacerbated by Iran’s financial and military support to Hezbollah, Hamas, and other militant groups arrayed against Israel.

Analysts warn that Iran’s nuclear program has reached a critical point.

The International Atomic Energy Agency (IAEA) issued its first censure of Iran in two decades on Thursday, accusing Tehran of failing to comply with its nuclear nonproliferation commitments.

Iran rejected the censure, claiming it undermined the credibility of the global nuclear watchdog.

In May, Reuters reported seeing an IAEA report that found that Iran had carried out secret nuclear activities with material not declared to the nuclear watchdog at three locations that have long been under investigation.

In a separate report by IAEA, the watchdog said Iran now possesses enough enriched uranium—at 60% purity—to theoretically produce material for nine nuclear weapons if further refined to weapons-grade levels of 90%.

The fragile legacy of the 2015 deal

The original 2015 nuclear accord, signed under President Barack Obama, aimed to restrict Iran’s enrichment capabilities.

Under the agreement, Iran could enrich uranium to no more than 3.67% and maintain only a limited stockpile of 300kg using basic centrifuge technology.

After Trump’s 2018 withdrawal, Iran began incrementally breaching the deal’s limits, eventually reaching enrichment levels of up to 60%.

Despite severe economic sanctions and covert operations—including the assassination of top Iranian nuclear scientist Mohsen Fakhrizadeh in 2020—Iran’s nuclear development has continued.

With regional tensions at a boiling point, the immediate future of diplomacy looks bleak. As the possibility of further strikes and counterstrikes looms, the world watches nervously for signs of either a renewed dialogue—or a broader conflict.

Will the attack set Iran back on its nuclear programme?

Will Israel’s attack dent Iran’s efforts to advance its nuclear programme?

The Natanz facility has long been the centerpiece of Iran’s nuclear program, producing the majority of the country’s enriched uranium — including much of the near-weapons-grade material accumulated over the past three years.

The full scale of damage to the site following Israeli airstrikes remains unclear.

There is still no confirmation on whether Israel also targeted Fordow, Iran’s second major enrichment facility.

Located deep within a mountain and housed inside an Islamic Revolutionary Guards Corps base, Fordow was deliberately constructed to withstand aerial attacks.

International Atomic Energy Agency (IAEA) Director General Rafael Mariano Grossi, who has toured the site, has noted that it sits nearly a half-mile beneath the surface — making it the most fortified installation in Iran’s nuclear network.

“It may take days, or weeks, to answer one of the most critical questions surrounding the attack of Iran’s facilities: How long has Israel set back the Iranian nuclear program?” David E Sanger, White House and national security correspondent for The New York Times, who has covered Iran’s nuclear program for two decades, writes in a report.

“If the program is delayed only a year or two, it may look as if Israel has taken a huge risk for a fairly short-term delay. And among those risks is not only the possibility of a long-lasting war, but also that Iran will withdraw from the Nuclear Nonproliferation Treaty, take its program underground, and race for a weapon — exactly the outcome Mr. Netanyahu was out to prevent.”

Brett McGurk, who has advised multiple US administrations on Middle East affairs, emphasized the centrality of Fordow:

If you don’t get Fordow, you haven’t eliminated their ability to produce weapons-grade material.

American officials have said Israel does not have the bunker-busting bombs to get at that facility, where Iran’s most advanced centrifuges have been installed.

And if Fordow survives the attacks, then there is a good chance the key technology of the country’s the nuclear program will survive with it.

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The European Commission announced on Friday that European Union countries would need 241 billion euros ($278 billion) in investments to expand nuclear energy. 

The Commission also stated that new funding instruments would be necessary to mitigate the substantial financial risks for private investors, according to a Reuters report.

Expanding capacity and lifespan

The Commission’s draft analysis of investment needs for the nuclear power sector, anticipated for publication on Friday, indicates that EU countries aim to increase their nuclear power capacity to 109 gigawatts by 2050.

This represents an increase from the current 98 GW.

These initiatives specifically target the expansion and maintenance of nuclear energy infrastructure, recognising its potential as a reliable, low-carbon power source.

The proposed investments are estimated to be a staggering 205 billion euros dedicated to the construction of new nuclear power plants. 

This considerable sum reflects the high capital expenditure associated with developing advanced reactor technologies and establishing new facilities, including site preparation, complex engineering, and long construction timelines. 

These new plants are envisioned to significantly augment existing power generation capabilities, contributing to national energy security and climate change mitigation goals.

In addition to building new capacity, a substantial allocation of 36 billion euros is earmarked for extending the operational lifespan of existing nuclear reactors. 

This investment is crucial for maximising the return on previously deployed assets and ensuring a stable, uninterrupted supply of electricity while new plants are being developed. 

Financing

Life extension programs typically involve comprehensive maintenance, component upgrades, and safety enhancements to ensure these facilities continue to operate safely and efficiently beyond their initial design life.

The draft outlines that these monumental investments will be sourced from a combination of public and private funds.

This collaboration aims to leverage both public resources and private sector expertise and capital to facilitate the timely and efficient execution of these critical energy infrastructure projects. 

Approximately 24% of the EU’s electricity last year was generated by nuclear power.

The Commission stated that additional financial instruments were required to attract private investors, who are deterred by the risks and substantial upfront costs associated with recent European nuclear projects that have experienced budget overruns and significant delays.

It noted that a five-year delay in planned new projects would increase their estimated cost by an additional 45 billion euros by 2050.

The Commission was quoted in the report as saying:

A combination of diverse sources of financing complemented by de-risking instruments may be the response.

EU’s nuclear divide

Disagreement has long persisted among EU countries regarding the promotion of nuclear power to meet CO2 emissions targets. 

The debate is primarily fueled by France, where nuclear power is the leading electricity source, and Germany, which had previously opposed it under past administrations.

Consequently, EU energy policies have generally avoided singling out nuclear power with specific incentives or targets. Additionally, the EU budget does not allocate funds for the construction of new nuclear power plants.

A 500-million-euro pilot program for power purchase agreements, open to nuclear projects, will be initiated by the European Investment Bank and the Commission, according to the draft document.

Out of 27 EU member countries, twelve currently operate nuclear reactors, with France possessing the largest fleet. Slovakia and Hungary are in the process of constructing new reactors. 

Meanwhile, nations like Poland are looking to develop their first nuclear plants.

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The Nifty 50 Index pulled back on Friday as a knee-jerk reaction to the latest Israeli attack on Iran’s nuclear sites, which risks a widespread crisis in the Middle East. The index, which tracks the biggest Indian companies, dropped to a low of ₹24,460, its lowest level since May 8. 

Why the Nifty 50 Index is falling

The Nifty Index plunged on Friday as global stocks suffered a harsh reversal. This decline was in line with the sell-off in global indices. The Shanghai Composite Index dropped by 0.70%, while the Hang Seng, KOSPI, and BSE Sensex plunged by over 1%. 

Similarly, global stock market futures, including the Dow Jones and S&P 500 indices dropped by over 1%. 

This decline was triggered by Israel’s decision to launch military strikes on Iran’s nuclear sites. The country did that to undercut the ongoing talks between the US and Iran. 

Therefore, there is a likelihood that this attack will attract retaliation by Iran, which may launch more powerful attacks on Israel. As such, since the US will always defend Israel, there is a likelihood that this crisis will escalate in the long term. 

Still, on the positive side for the Nifty 50 Index, many of its constituent companies have no major presence in Israel or Iran. For example, Reliance Industries, the biggest company in the index makes most of its money in India.

The same is true with other companies in the Nifty Index like HDFC Bank, ICICI Bank, State Bank of India, and Bajaj Finance. While consulting companies like Tata Consultancy and Infosys have a presence in Israel, they generate a small portion of revenue from the country.

It is common for global indices like the Nifty 50, Nikkei 225, and Hang Seng to have a knee-jerk reaction after a major event. For example, most of them plunged in April after Trump announced his tariffs. 

RBI is a key catalyst

The Nifty 50 Index has a key backer as the Reserve Bank of India (RBI). The bank caught the market by surprise last week when it slashed interest rates by 0.50% to 5.50%. 

It also slashed the cash reserve ratio by 100 basis points in stages from September. Stocks often do well in periods of low interest rates as this usually leads to low demand for lower-yielding bonds.

In another surprise move, the media reported that the bank abandoned a tool it had deployed to defend the rupee. The bank’s short dollar positions in the non-deliverable futures market dropped below $5 billion, down from $70 billion last year. 

Further, Indian stocks are attracting more corporate activity, including block trades. They had $6.4 billion raised through share sales in May, with momentum continuing this month. In a note, a Goldman Sachs analyst said:

“Right now, investors are saying, ‘I need exposure to India — and I need it fast. Block trades remain the quickest and most efficient way to get that exposure.”

Nifty 50 Index analysis

Nifty 50 Index chart | Source: TradingView

The daily chart shows that the Nifty 50 Index retreated to a low of ₹24,667, down from the year-to-date high of ₹25,240. On the positive side, the index has formed a golden cross as the 50-day and 200-day Weighted Moving Averages (WMA) crossed each other. 

The index has also formed a bullish flag pattern, a popular bullish continuation sign. Therefore, the index will likely continue rising as bulls target the key resistance at ₹25,000. A drop below the support at ₹24,000 will invalidate the bullish view.

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The DAX and CAC 40 Index futures retreated by minus 1.70% on Friday as investors embraced a risk-off sentiment amid the ongoing geopolitical tensions in the Middle East.

The CAC 40 Index dropped to €7,633 on Friday, down from last month’s high of €7,950. Similarly, the German DAX tumbled to €23,400, down from the year-to-date high of €24,475. 

Other European indices also dropped, with the Euro Stoxx 50 falling by 1.73% to €5,268 and the AEX Index falling by 0.42%. Similarly, their Asian and American peers like the Nikkei 225, Nifty 50, and Dow Jones resumed their downtrend.

Why the German DAX and French CAC are falling

European stock indices plunged as fears of a prolonged conflict in the Middle East continued. These fears jumped after Israel attacked Iran’s nuclear sites shortly after an international nuclear agency ruled that Iran was not complying with its obligations. 

This attack risks spiralling into a prolonged conflict that will draw other regional countries. Most importantly, it could lead to supply chain disruptions, which will worsen the state of companies at a time when they are dealing with Donald Trump’s tariffs. 

The other implication is that the attack and the subsequent war may lead to higher crude oil prices this year. Higher oil prices lead to inflation, which, in turn, may affect the ongoing interest rate cuts by the European Central Bank (ECB). 

The ECB has already cut interest rates eight times since last year, and analysts were anticipating more cuts later this year. Higher oil and natural gas prices may affect the trajectory of rate cuts. 

However, there is a chance that the ongoing DAX and CAC 40 crash will be a knee-jerk reaction, a common situation when risks emerge. In most cases, stocks plunge after a major event and then bounce back after a while. 

For example, global stocks plunged after Russia invaded Ukraine in 2022 and then bounced back as the situation cooled down. 

The same happened last year when the war between Israel, Hamas, and Hezbollah escalated. Global stocks also plunged after Israel launched attacks against Iran. 

Most recently, global stocks plunged after Donald Trump announced reciprocal tariffs against other countries. Most of these indices plunged and then bounced back as the tensions eased. 

DAX Index technical analysis

DAX Index chart | Source: TradingView

The daily chart shows that the DAX Index jumped to a record high of €24,474 on January 5 and then pulled back to €23,770. The Relative Strength Index (RSI) and the MACD indicators have pointed downwards.

A closer look shows that the index remains above the key support level at €23,425, the highest point in March this year. It also remains above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls remain in control. 

Therefore, the index is likely forming a break-and-retest pattern by moving back to €23,425. Such a move will then trigger a rebound to a new record high this year. 

CAC 40 Index analysis

CAC 40 Index chart | Source: TradingView

The daily chart shows that the CAC 40 Index has held steady in the past few days and remained above the 50-day and 100-day EMAs. Also, the MACD and the RSI have formed a bearish divergence pattern. 

The index has formed a bullish pennant pattern, comprising of a vertical line and a triangle-like formation. Therefore, the CAC 40 Index will bounce back as the tensions in the Middle East rise. 

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The FTSE 100 Index continued its uptrend this week as economic data released by the Office of National Statistics (ONS) pointed to a potential interest rate cut by the Bank of England (BoE). It rose to a high of £8,885 on Thursday, a few points below the year-to-date high of £8,900, and 16% above the lowest point in April.

BoE rate cut hopes boost the FTSE 100 Index

The Office of National Statistics (ONS) published relatively weak economic numbers, pushing analysts to predict that the Bank of England will cut interest rates soon. 

A report released on Thursday showed that the British economy grew by 0.9% in April, a drop from the expansion of 1.1% in the same period last year. It contracted by 0.3% on a month-on-month basis.

More data showed that the goods trade deficit rose by £23.21 billion in April from £19 billion in the previous month. The non-EU goods trade deficit widened to £8.6 billion.

Further, the UK industrial and manufacturing production weakened during the month. And on Tuesday, a report by the ONS showed that the labor market softened in April.

These numbers mean that the BoE will likely cut interest rates next week. This explains why UK Gilt yields plunged this week. The 10-year yield dropped to 4.474%, its lowest level since May 8, and lower than the YTD high of 4.817%.

Similarly, the five-year yield tumbled to 3.988%, down from 4.27% in May. Falling bond yields signal that investors anticipate that the central bank will slash interest rates in the future.

The stock market performs well when bond yields are falling because of the rotation to equities from the low-yielding bond market.

Top UK stocks of the week

Many FTSE 100 Index stocks were in the green this week. Fresnillo stock jumped by 12%, bringing the year-to-date gains to 127%. This surge happened as the silver price continued rising and hit its highest level in over a decade.

BP share price jumped by 11% as crude oil price surged and rumors of a takeover continued. The biggest news during the week was that Adnoc, a UAE energy giant, was considering buying some of the company’s assets. Analysts warn that a full takeover will be unlikely because of its size and complexities.

UK home builders like Persimmon, Taylor Wimpey, and Barratt Development surged by over 8% and were among the best-performers in the FTSE 100 Index. These stocks jumped as UK bond yields dropped, which may trigger more demand. 

The other top gainers in the FTSE 100 Index were companies like Halma, Shell, British American Tobacco, BT Group, and Prudential.

On the other hand, the top laggards were companies like Anglo American, EasyJet, JD Sports, Diageo, and Babcock International.

FTSE 100 Index analysis: faces major test

FTSE 100 Index chart | Source: TradingView

The daily chart shows that the FTSE 100 Index has formed a V-shaped recovery as it jumped from a low of £7,543 on April 7 to a high of £8,885. It has jumped above all moving averages, while the MACD and the Relative Strength Index (RSI) have continued rising. 

This V-shaped recovery is now facing a major test as it nears its highest point on March 3. It needs to move above that level to invalidate the double-top pattern that has been forming. A break above that level will point to more gains to £9,000. The alternative scenario is where it pulls back and retests the 200-day moving average at £8,642.

Read more:  CAC 40 and DAX indices have crashed: buy the dip?

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The crypto crash accelerated on Friday as Bitcoin and most altcoins plunged. Bitcoin price dropped below $105,000, while the 24-hour liquidations jumped by 257% to $1.16 billion.

Cryptocurrencies plunged as investors reacted to the ongoing crisis in the Middle East, which pushed crude oil prices higher. Higher oil prices mean that the Federal Reserve may decide to leave rates steady for longer as this will help to lower inflation. 

Top altcoins to buy the dip as the crypto crash continues

History shows that such big dips in the crypto market result in major swings. For example, most of them plunged in April following the “Liberation Day” speech and then bounced back. 

This article explores the top altcoins to buy the dip in as the crypto crash gains steam. Some of the most notable ones are Chainlink (LINK), Polkadot (DOT), and Hyperliquid (HYPE).

Chainlink (LINK)

Chainlink is one of the best altcoins to buy as the crypto crash intensifies. It is a major blockchain in some of the fastest-growing areas in the crypto industry like decentralized finance (DeFi) and Real-World Asset (RWA) tokenization.

Chainlink’s network has continued growing in the past few months. Just recently, it revealed that it was facilitating the secure exchange of a Hong Kong CBDC and an Australian dollar stablecoin as part of the e-HKD program. Other participants in the trial are Visa, ANZ Bank, and Fidelity. 

Further, Chainlink is working with JPMorgan and Ondo on a groundbreaking way to use Kinexys Digital Payments to allow institutions to buy Ondo’s tokenized treasuries. 

Chainlink Data Streams was also selected by HyperEVM, a DeFi network with over $480 million in assets. This integration will make it easier for the network enhance lending and borrowing. 

Chainlink price will likely continue rising in the long term as more companies embrace its technology in industries like DeFi and RWA. 

Read more: Chainlink price prediction: here’s why LINK may surge to $50 soon

Polkadot (DOT)

Polkadot is a top layer-1 network established by one of Ethereum’s co-founders. Its initial strategy was to let developers launch their parachains on the network. 

A parachain is a specialized blockchain that runs in parallel to the Polkadot Relay Chain. Developers can then build projects directly on these parachains. 

Polkadot is now implementing Polkadot 2.0, which changes and reimagines the initial goal. It has replaced parachain auctions, which were time-consuming and expensive, meaning that anyone can launch a dApp within days. 

The 2.0 upgrade is now in the final stage known as elastic scaling, which will boost its speeds and add more features. After this, it will implement the Join-Accumulate Machine (JAM) upgrade that will replace the Relay Chain with a better architecture. 

These moves are meant to make it a more efficient network, boosting the DOT token price over time. DOT has also formed a triple-bottom pattern on the weekly chart, pointing to more gains in the long term. 

Hyperliquid (HYPE)

Hyperliquid is another top altcoin to buy as it continues to grow its market share. Its layer-1 network has 36 applications and has accumulated almost $2 billion in total value locked (TVL). This means that it has passed Aptos, Sonic, Polygon, Hedera Hashgraph, and Cardano. 

Hyperliquid’s perpetual futures trading platform has also done well this year as it continues to dominate the industry. Data shows that Hyperliquid’s platform handled $250 billion in transactions in the last 30 days, much higher than other top players in the industry like Aster, Jupiter, and RabbitX Fusion. 

Other top crypto to buy and hold

Some of the top altcoins to buy and hold this year are Solana, Tron, Binance Coin (BNB), Artificial Superintelligence Alliance (FET), and Ethena (ENA).

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