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The week begins with a blockade. After 21 hours of peace talks in Islamabad collapsed Sunday, President Trump announced that the U.S. Navy would begin a blockade of the Strait of Hormuz at 10 a.m. Eastern today, interdicting vessels that paid Iran for passage and moving to clear the waterway of sea mines. Vice President JD Vance, who led the marathon talks, blamed Tehran for refusing U.S. terms on its nuclear program. Trump, who spent much of Sunday at his Doral resort golfing and calling into Fox News, promised that any Iranian forces firing on U.S. troops or commercial shipping would be "BLOWN TO HELL."
The blockade opens a volatile new phase in a six-week-old conflict that has already blocked around 13 million barrels a day of oil production from the Gulf — some 12% of the global market. Trump and his advisers are also weighing limited military strikes to break the diplomatic stalemate, though a full-scale bombing campaign is considered less likely. The narrow waterway remains exposed to Iran's coastline: the U.S. has destroyed most of Iran's conventional navy, but the paramilitary Islamic Revolutionary Guard Corps still has more than 60% of its fast-attack craft intact and continues to control Hormuz through mines, drones and harassment of commercial ships. A retired vice admiral put it bluntly: "Iran has lost 80% to 90% of its naval capacity. The last 10% is the hardest part."
The few ships that have been transiting the strait are doing so under what the industry calls the "Tehran Tollbooth" — negotiating passage and fees directly with the IRGC, with tolls running as high as $2 million for the biggest supertankers. More than 425 oil and fuel tankers and nearly 15 LNG vessels are bottlenecked waiting to get through. Iran's nuclear program, meanwhile, has survived five weeks of punishing strikes with most of the tools needed to build a bomb still intact, including a stockpile of nearly 1,000 pounds of near-weapons-grade uranium, about half of it buried in caskets in a tunnel under the Isfahan nuclear site.
The economic reverberations are everywhere. Consumer prices rose 0.9% in March and 3.3% over the past 12 months, with energy costs fueling much of the increase — the first inflation reading to account for the rise in energy prices from the war. Oil has surged past $100 a barrel. The University of Michigan's consumer sentiment survey just posted its lowest-ever reading, worse than during the 2008 recession or the pandemic. CEOs of the three largest U.S. oil companies have privately warned administration officials that a prolonged Hormuz closure could sharply squeeze global fuel-supply chains. Treasury Secretary Scott Bessent has discussed with Trump various measures the Treasury could take if the war dragged on eight to 12 weeks, telling the president that Asia and Europe would be most vulnerable to rising energy prices. Trump conceded on Fox News that gasoline prices might not fall before the midterms.
Gulf allies, meanwhile, are scrambling to rearm from a wider mix of suppliers after six weeks of bombardment sapped air-defense stocks. Saudi Arabia, Qatar and the UAE are turning to South Korean missile-defense systems, Ukrainian interceptor drones and even British startups. At a meeting near Buckingham Palace last month, U.K. minister for defense readiness and industry Luke Pollard asked gathered executives: "What can you deliver within 30, 60 and 90 days?" The rush exposes both the U.S. arms industry's lack of capacity and the reality that some Patriot orders will take years to deliver.
At Vitol, the world's biggest oil merchant, a team led by star trader Yaoyao Liu took a several-hundred-million-dollar hit early in the war after bets in the petroleum market went awry — positions that would have paid off had Trump pulled back rather than pressing forward. The firm as a whole is up for the year, but the episode underscores the scale of dislocation roiling energy markets.
Trump's Sunday was notably combative beyond Iran. He lashed out at Pope Leo XIV for condemning the war, calling the pontiff "WEAK on Crime" and alleging that Leo, an American, was selected as pope to counter him. "If I wasn't in the White House, Leo wouldn't be in the Vatican," Trump said. On Friday, Leo wrote on X that "God does not bless any conflict." He had previously called Trump's threat to wipe out Iran's civilization "truly unacceptable." The clash could put the president at odds with some of the tens of millions of Catholics in the U.S.; several senior administration officials, including Vice President Vance, are practicing Catholics.
Across the Atlantic, a political earthquake: Hungary's Viktor Orbán suffered a landslide defeat on Sunday, ending 16 years of rule. With 98% of votes counted, Péter Magyar's opposition Tisza party was leading 53.6% to Orbán's 37.8%, one of the largest margins in Hungary's post-communist era. Magyar told supporters he had won a David-against-Goliath fight and promised Hungary would once again be a strong EU ally; the crowd broke into chants of "Europe!" and "Russians go home!" Orbán had cultivated ties with Trump and Putin — Trump endorsed him and sent Vance to campaign alongside him last week — but years of inflation, healthcare underinvestment and leaked audio suggesting close ties with Russia proved too much. Hungary last year became the poorest EU member state by some indicators, and has been deprived of €17 billion in foreign aid withheld over democratic backsliding. "This is not just a repudiation of Russian influence but it's also a repudiation of Trump," said political scientist Ian Bremmer.
Back home, the IRS is in retreat. The agency has shed thousands of enforcement workers since Trump returned to office, and his proposed budget would push the enforcement workforce below 30,000 — about a third less than the Biden-era peak. Audits of people with at least $10 million in income dropped 9% last year and are on track to decline another 39% this year. Tax lawyers report a spreading mentality: "The IRS isn't going to catch me." The administration's own budget document concedes that cutting enforcement creates "missed opportunities and lost revenue." Yale's Budget Lab estimates the workforce reductions so far will cut $46 billion in spending over the next decade but reduce revenue collections by $643 billion.
The artificial-intelligence boom, meanwhile, is running headlong into a computing capacity crunch. Demand for "agentic" AI tools has exploded, and the infrastructure can't keep up. Anthropic's Claude API had a 98.95% uptime rate over the past 90 days as of April 8 — well below industry norms — and some enterprise clients are switching providers. OpenAI scrapped its Sora video-generation app in part to free up computing resources. Hourly rental prices for Nvidia's most advanced Blackwell GPUs have jumped 48% in two months to $4.08, and Anthropic's annualized revenue rose from $9 billion at the end of 2025 to $14 billion by February and doubled again to $30 billion two months after that. "Everyone's talking about oil," said one tech investor, "but I think what the world is mainly short of is tokens."
In Augusta, Rory McIlroy won his second consecutive Masters, finishing at 12-under to collect his sixth career major and join Jack Nicklaus, Nick Faldo and Tiger Woods as the only players with back-to-back wins at Augusta National. It was vintage McIlroy — a historic six-stroke lead after two rounds, a near-collapse Saturday, then a front-nine stumble on Sunday that dropped him to fourth before he roared back with brilliant shots on the back nine. Shane Lowry added to the weekend's drama by becoming the first player to record two holes-in-one at the Masters, acing the 190-yard sixth hole with a 7-iron on Saturday.
And in a small Massachusetts town, South Hadley, Mass., votes Tuesday on two override questions; under the larger $11 million option, the average property-tax bill would rise about 50% over five years, amid a fight marked by disappearing campaign signs and a retired pathobiologist saying he'd have to sell his home if it passes. Officials warn that without it, there will be no school sports, slashed AP offerings and cuts to police. Chris Morrill, chief executive of the Government Finance Officers Association, said South Hadley is "perhaps the canary in the coal mine" for communities facing the end of pandemic-era aid. It's a local fight, but the dynamics are familiar everywhere: rising costs pressing in from all sides, with no one willing to absorb the hit.
That tension — between what things cost and what people can bear — threads through nearly every story this morning, from the Strait of Hormuz to a brunch kitchen in Geneva, Illinois, where restaurants are finding it harder than ever to hire a dishwasher, to surcharges popping up across the economy and Anthropic limiting usage during peak hours as AI firms scramble for compute. The blockade begins at 10 a.m. What comes after that is anyone's guess.
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