Iran’s currency imploded to ₺1.38 million per US dollar yesterday, igniting two straight days of merchant-led protests that closed swathes of Tehran’s Grand Bazaar and forced Central-Bank Governor Farzin to resign. Police tear-gassed crowds; inflation already runs at 42 percent and food prices are up 72 percent year-on-year. (apnews.com)

When the bazaar last revolted in 1979, the shah fell; in 2019 a fuel-price spike killed 300-plus protesters. Today’s spark is different: a sanctions-strangled economy that lost an estimated $110 billion in oil revenue since 2018 now faces hyper-inflationary risk as subsidy cuts and a 24 percent rial slide since September collide. Markets should note that every one-percent drop in the rial historically adds roughly 0.4 percent to regional food inflation—fuel for wider unrest. (apnews.com)

Tehran’s crisis is therefore not merely domestic; it is a pressure point in a Middle East already brimming with flash-fires—from Gaza to the Strait of Hormuz—that can jolt oil above $70 overnight. As political economist Branko Milanović warns, “When price and power both erode, revolts migrate from markets to ministries.” (apnews.com)

The Gist AI Editor

Gulf Allies Clash

A sharp escalation in regional tensions sees Saudi Arabia bombing a Yemeni port city to intercept a weapons shipment from the United Arab Emirates (WSJ). The airstrikes represent a dangerous fissure between two long-standing Persian Gulf allies, complicating efforts to stabilize Yemen and presenting a significant foreign policy challenge for the Trump administration. This pivot from cooperation to direct confrontation undermines regional security frameworks and introduces fresh volatility into an already turbulent Middle East.

Iran’s Economic Instability

Internal pressures are mounting on Iran’s government as growing protests sweep the country, triggered by a sharp drop in the nation’s currency (WSJ). The unrest highlights a persistent economic crisis, fanning popular frustration and placing the regime on the defensive. Such domestic instability has significant geopolitical implications, potentially altering Tehran’s strategic calculations in the region as it contends with challenges both at home and abroad.

Shifting Energy Flows

The global energy map continues to be redrawn by geopolitical currents. Russian crude oil flows to India are on track to hit a three-year low this month, a notable shift in trade patterns, although a potential rebound is anticipated early next year (Bloomberg). Meanwhile, benchmark crude oil prices are edging lower, reflecting the complex interplay between supply fundamentals and overarching geopolitical uncertainty, including developments from Venezuela to the Persian Gulf (WSJ).

China’s Market Ascent

In a striking contrast to geopolitical frictions elsewhere, Chinese stocks are poised to record their best annual performance since 2017. The rally, initially driven by technology stocks, has now broadened to include a wider range of sectors from mining to pharmaceuticals (Bloomberg). This robust market performance signals investor confidence in China’s economic trajectory, even as other global powers navigate complex diplomatic and security challenges.

Stay tuned for the next Gist—your edge in a shifting world.

Oil Edges Lower; Venezuela in Focus
— Wall Street Journal

Growing Iran Protests Put New Pressure on an Embattled Regime
— Wall Street Journal

Chinese Stocks on Track for Best Year Since 2017 as Rally Widens
— Bloomberg

Saudi Arabia Bombs Yemeni Port City Over Weapons Shipment from the U.A.E.
— Wall Street Journal

Capitalism and Crime: The Books That Got Me Through the Year
— Bloomberg

Russian Oil Flows to India Sink But Reliance May Limit Decline
— Bloomberg

Beijing’s Taiwan Rehearsal

China has escalated its military pressure on Taiwan, launching a second day of live-fire drills codenamed ‘Justice Mission 2025’. The exercises simulate a blockade of key Taiwanese ports and included rocket launches into the Taiwan Strait. Taipei reported detecting 130 Chinese aircraft and 22 naval vessels near the island within 24 hours, the highest single-day number since October 2024 (Ansa). This aggressive posturing is a calculated move to test Western resolve and normalize a heightened military presence. For European businesses, these drills are a stark reminder of the fragility of global supply chains, as any conflict in the Strait would immediately choke off a critical artery for semiconductor and electronics trade, sending economic shockwaves across the continent.

Moscow’s Escalation Narrative

Russia is actively shaping the narrative for potential escalation, with Foreign Minister Lavrov accusing Ukraine of a drone attack on one of President Putin’s residences (ZDF). Kyiv has denied the allegation. This claim, whether true or fabricated, serves a strategic purpose: justifying a harsher retaliatory stance. For Europe, this rhetoric signals that Moscow may be laying the groundwork for strikes against more sensitive targets, potentially expanding the conflict’s scope. It’s a classic authoritarian playbook—create a pretext for aggression—that further destabilizes the region and forces EU and NATO members to recalibrate their defensive and diplomatic strategies.

Tehran’s Defiant Posturing

Tensions are simmering between Washington and Tehran after President Trump threatened to “eliminate” Iran’s weapons if it pursues its nuclear program. Iran’s top security official, Ali Shamkhani, issued a sharp retort, stating that “any aggression will be met with an immediate and harsh response” and that its defense capabilities are not up for negotiation (Ansa). This exchange highlights the persistent threat of miscalculation in the Middle East. For Europe, the precariousness of the situation jeopardizes any remaining diplomatic efforts to contain Iran’s nuclear ambitions and poses a direct risk to maritime security in vital energy shipping lanes.

Catch the next Gist for the continent’s moving pieces.

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— ZDF

« A la recherche de Zia Bey » : Patrick Minder suit à la trace un fonctionnaire ottoman
— Le monde

The Guardian view on antibiotics: recent breakthroughs are great news, but humanity is losing the bigger race | Editorial
— The Guardian

Holz für den Kamin: Arten, Qualität und Lagerung
— ZDF

Morta a 80 anni Khaleda Zia, ex premier del Bangladesh favorita alle prossime elezioni
— Ansa

Ungemütliches Wetter an Silvester
— ZDF