Sacred Ashura tradition a show of 'resistance' in Beirut amidst Israel-Hezbollah conflict.

Extract from ABC News

By correspondent Bridget Rollason and Cherine Yazbeck

• Topic:Unrest, Conflict and War

18 hours ago

For the militant group Hezbollah, the Ashura procession was a chance to rally its supporters as the movement faces pressure to surrender its weapons. (ABC News: Cherine Yazbeck)

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Beirut's southern suburbs were blanketed in black as tens of thousands of people gathered to mark the largest Ashura procession in the Lebanese capital in years, after months of deadly bombardment by Israel.

A sacred day of mourning for Shiite Muslims, the ceremony was also a display of Hezbollah's force, as the Iranian-backed militant group sought to demonstrate its influence in Lebanon despite mounting pressure for it to disarm.

Residents say the turnout in Beirut was likely bolstered by many displaced people from southern Lebanon. (ABC News: Cherine Yazbeck)

Dressed in black, mourners waved Hezbollah and Iranian flags in the biggest gathering organised by the pro-Iran group, considered a terrorist organisation under Australian law, since the outbreak of the war in March.

Some mourners carried posters of Hezbollah fighters killed during the conflict with Israel, and chanted "America, America, you are the Great Satan" and "Death to America, death to Israel."

Residents said the turnout was likely bolstered by many people from southern Lebanon staying in the capital, after being displaced from their homes because of the ongoing conflict.

Hadi was among the mourners who attended the Ashura procession. (ABC News: Cherine Yazbeck)

Medical student Hadi, 22, told the ABC his family business in Arab Salim in Lebanon's south was destroyed in the recent conflict.

"With each year, this [procession] becomes more important," he said.

"With all the destruction that's happened from the Israelis in Lebanon, it's really important today to show we are not afraid of their tactics and we will be not be intimidated by their continuing campaigns to take the spirit out of our people and out of our resistance."

Many mourners were overcome with emotion, holding their heads in their hands and sobbing as they commemorated the death of Imam Hussein, the grandson of the Prophet Mohammed, who was killed in battle more than 1,300 years ago.

For Shiite Muslims, Ashura commemorates the death of Imam Hussein, the grandson of the Prophet Mohammed. (ABC News: Cherine Yazbeck)

But for Sabah Al Abdallah, whose home town of Khiam is now inside the Israeli "security zone" along the Lebanon border, the holy day was also about remembering her 27-year-old son Mohamad.

He was killed while fighting for Hezbollah this year.

"My son is still missing, his body has not been recovered," Ms Al Abdallah told the ABC.

"He became a martyr for the sake of God … he was killed in southern Lebanon … alongside other men … he was part of the resistance."

The procession was meant to be held in the suburb of Dahieh, a traditional Hezbollah stronghold in southern Beirut, but was moved to another location nearby over security concerns.

The area has been repeatedly targeted by Israeli strikes during the war, leaving dozens of buildings damaged and many reduced to rubble, prompting fears about the safety of returning crowds.

For Sabah Al Abdallah, the holy day was also about remembering her late son who was killed while fighting for Hezbollah. (ABC News: Cherine Yazbeck)

For Ms Al Abdallah, the pain of losing her son was compounded by the devastation surrounding her.

"Our homes are gone, everything is gone,"

she said.

"The destruction [in the war] has left us with nothing."

Ashura, which marks the end of the first 10 days of the Muslim month of Muharram, is also recognised as a symbol of sacrifice and standing against injustice. It is observed with prayers, processions, speeches and rituals of mourning.

"We are in the midst of a battle, we are living Ashura," 35-year-old businessman Hassan told the ABC.

"Despite the anger we feel, the challenges and the danger … we have come from every region to renew our pledge to Imam Hussein … we are standing up to defend this entire country and this whole nation."

Hassan says this year's procession is about standing up for Lebanon. (ABC News: Cherine Yazbeck)

For Hezbollah, Ashura was also a chance to rally its supporters as the movement faces calls to surrender its weapons.

The pressure has intensified since the war with Israel, with Lebanon's government arguing that only the state should control armed forces.

The US and other international partners are also pushing for Hezbollah's weapons to be brought under state control, arguing it is necessary to prevent another war with Israel.

They argued now is the time for Hezbollah to lay down arms, after claiming the group was weakened during the fighting following the loss of senior commanders and military infrastructure, destroyed by Israeli strikes.

Hezbollah rejects those demands and insists its weapons are needed to defend Lebanon, while it believes Israel remains a threat.

"Israel has no option but to withdraw completely from every inch of our Lebanese land … Israel must leave unconditionally," Hezbollah leader Naim Qassem said in a televised speech to mark Ashura.

But Israel has said that for security reasons, it intends to maintain a military presence in southern Lebanon until Hezbollah is disarmed.

Ceasefire brings new pressure on Hezbollah

Ashura comes just days before Iran Supreme Leader Ayatollah Ali Khamenei's funeral will be held, after the 86-year-old was killed in an Israeli air strike on the first day of the war between the US, Israel and Iran on February 28.

In a show of support with Iran and to avenge the death of Khamenei, Hezbollah fired on Israel in early March, dragging Lebanon into the broader regional war.

A new ceasefire between Israel and Hezbollah was announced last week and has largely held since Sunday. (ABC News: Cherine Yazbeck)

Israel responded with air strikes and a ground invasion that the Lebanese Health Ministry says has now killed more than 4,200 people, including hundreds of women and children.

More than one million Lebanese people were also displaced.

Thousands of Israelis from border communities in the north of the country were also forced to flee the area, as Hezbollah rocket and drone attacks continued for months.

The conflict in Lebanon has repeatedly threatened to derail the new 60-day ceasefire deal between the US and Iran to try to bring lasting peace to the region.

Ongoing fighting in Lebanon between Israel and Hezbollah has angered US President Donald Trump, who had urged Israel's Prime Minister Benjamin Netanyahu to show restraint in strikes on the country — particularly on Beirut — knowing it could jeopardise the broader peace talks with Iran.

More than one million people have been displaced inside Lebanon. (ABC News: Cherine Yazbeck)

Iran has repeatedly insisted that its deal must include the end to fighting on all fronts, including Lebanon.

A new ceasefire between Israel and Hezbollah was announced last week and has largely held since Sunday.

Under US pressure, Lebanon and Israel held their fifth round of talks in Washington this week, despite calls from Hezbollah for the Lebanese government to abandon the negotiations.

After four days of discussions, the countries agreed that Israel will conduct a limited withdrawal from two areas in southern Lebanon, transferring the sites to the Lebanese military, according to Prime Minister Benjamin Netanyahu.

Mr Netanyahu said in a video statement that the Lebanese army would "begin organising to take control of territory", adding the "pilot zones" are areas that the IDF does not need.

Venezuela earthquake death toll passes 1,400 as survival window narrows.

Extract from ABC News

By Anna Cox

• Topic:Disasters and Hazards

1 hours ago

The earthquakes hit particularly hard in La Guaira. (AP: Pedro Mattey)

In short:

Venezuela's Acting President Delcy Rodriguez says 14,000 military and police members have been deployed to the coastal city of La Guaira in the wake of twin earthquakes that struck the country.

She said the "critical hours for rescuing people alive" were running out, as the official death toll passed 1,400.

Residents say there is a scarcity of government help, as thousands of people remain missing.

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The death toll of two earthquakes in Venezuela has climbed to 1,430, as searches for survivors intensify during the remaining hours of the window for survival. 

Residents took the search for missing loved ones into their own hands, citing a scarcity of government rescuers and thousands of people remaining missing.

Aid agencies consider the first 48 to 72 hours to be the "golden window" to retrieve people buried in rubble, though that can be extended if they have access to food and water.

Oscar Perez hugs his family after reuniting with them three days after an earthquake struck in La Guaira. (AP Photo/Matias Delacroix)

According to the Venezuelan government, 172 people are trapped, 3,238 injured and 3,100 have been left homeless as of Saturday, local time.

Thousands of people are known to be missing.

Electricity has been restored in 60 per cent of affected areas, with telecommunications expected to help reunite separated families.

Rescue workers from around the world have been deployed to Venezuela. (AP Photo: Pedro Mattey)

Rising death toll and damage cost

Just after 6pm on Wednesday, two consecutive earthquakes measuring magnitudes 7.2 and 7.5 reduced parts of northern Venezuela to rubble.

Hitting within 39 seconds of each other, the quakes caused an estimated $US6.7 billion ($9.7b) in damage, according to the UN.

A collapsed building in La Guaira, a coastal city about 30 kilometres north of Caracas on Wednesday, local time. (Reuters: Maxwell Briceno)

The second earthquake was Venezuela's most powerful in more than a century.

The UN's International Organization for Migration (IOM) said in a statement "up to 6.76 million people could be affected", based on population and damage analysis.

Predictive modelling done by the US Geological Survey indicates the death toll will likely rise into the thousands.

Patients lie outside a damaged hospital that had to be evacuated in Catia La Mar. (AP Photo: Pedro Mattey)

More resources needed

Acting President Delcy Rodriguez said her government was mounting a full response during the "critical hours for rescuing people alive".

Delcy Rodriguez tours a neighbourhood struck by the earthquakes. (Handout / Venezuelan Presidency / AFP)

Ms Rodriguez said in an overnight address on state television that 14,000 military and police members were in La Guaira to patrol and take sanitary measures.

Foreign Ministry official Oliver Blanco said 17 flights carrying more than 1,600 members of rescue teams had also arrived.

"Over the next 24 hours, the arrival of 25 additional flights is expected,"

Mr Blanco said.

But residents say more resources are urgently needed, criticising the official response to the disaster.

Lawyer Ricardo Trias, 73, was trying to obtain a death certificate for his godson Armando Lopez, 54.

Mr Lopez's body was pulled from the rubble of his building in the coastal town of Caraballeda on Thursday night, and remained at the site.

"We want them to give us the body … we can't take it, and here it will rot," Mr Trias said.

"No forensic authority has come."

In La Guaira just north of the nation's capital, Nazareth Jimenez sobbed into a loved one's shoulder as she watched neighbours use hammers and power tools to try to cut through concrete slabs in a pile of rubble.

The building was where her siblings, nephews, nieces and friends were at the time of the earthquake.

"We're making a call for help to the government and countries across the world," Ms Jimenez said, pleading for machinery capable of moving collapsed structures.

"There are still people alive in there."

International aid commitments

On Friday, Venezuelan authorities said 861 volunteers from Mexico, the US, El Salvador, Switzerland, Colombia and beyond were in the country, and more were coming from elsewhere.

The Mexican army's search-and-rescue team joined the recovery effort.  (AP Photo: Matias Delacorix)

The United States said it was deploying two warships, transport planes and helicopters, along with $US150 million ($217 million) in aid, while British Prime Minister Sir Keir Starmer said his government has sent £2 million ($3.8 million) in humanitarian aid along with a search-and-rescue team of 68 members, including six specialist search dogs.

Ms Rodriguez said the government was creating a $US200 million reconstruction fund for hospitals and homes damaged by the earthquakes.

The International Federation of Red Cross and Red Crescent Societies (IFRC) has launched an Emergency Appeal for 50 million Swiss francs ($90 million) to assist its operations in Venezuela.

The first 17 metric tonnes of humanitarian supplies left the IFRC's regional humanitarian hub in Panama for Venezuela on Friday.

— with wires

Ukraine launches heavy drone attack on Russia, annexed Crimea declares 'emergency'

 Extract from ABC News

• Topic:Unrest, Conflict and War

8 hours ago

The drone attack comes after Volodymr Zelenskyy hinted at a 40-day blitz on Russia. (Reuters: Valentyn Ogirenko)

In short:

Ukraine has launched one of its largest ever drone attacks on Russia since the Kremlin's full-scale invasion more than four years ago.

Kyiv's long-range drones have been battering oil production and energy facilities behind the front line and deep inside Russia.

Authorities in Russian-annexed Crimea on Friday declared an "emergency situation" in a bid to ease the fallout from increasing Ukrainian aerial attacks on the peninsula.

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Ukraine has launched a major night-time attack on a dozen Russian regions, Russian-held Crimea and the surrounding seas, Moscow's Defense Ministry says.

Russian air defences intercepted 660 Ukrainian drones, Russia's Defense Ministry said on Friday, local time.

The bombardment appeared to be one of Kyiv's biggest drone assaults since the Kremlin's full-scale invasion more than four years ago.

The previous biggest Ukrainian attack over the past year, as Ukraine has accelerated its drone development, involved 556 drones on May 17.

How Ukraine is breaking through defences to bring war home to Moscow

Ukraine's growing arsenal of locally-produced long-range drones are getting increasingly sophisticated, allowing Kyiv to increasingly strike targets across Moscow.  

In an effort to turn the tables on Russia's grinding war of attrition, Ukrainian long-range drones have been battering oil production and energy facilities behind the front line and deep inside Russia.

The campaign has choked Russian fuel supplies and military deliveries, stalling Moscow's efforts on the battlefield, Western officials and analysts say, and has heaped pressure on Russian President Vladimir Putin.

Russian chemical plant reportedly hit

Initial damage reports from Russia after the overnight attack provided scant information. Russia's Defense Ministry usually does not say what was targeted in Ukraine's drone attacks, nor does it detail any damage.

Russian independent online outlet Astra reported that a chemical plant and a hydro-electric plant in Novomoskovsk were attacked and caught fire. The Associated Press could not independently verify the report, and there was no official confirmation.

Moscow Mayor Sergei Sobyanin reported that 47 Ukrainian drones were downed as they flew toward the Russian capital. He did not report any casualties or damage.

Ukraine's Security Service said it used drones to strike Russian navy ships and air defence radars in Kerch, an important port city in Crimea.

The targets were two reconnaissance and mine-laying ships, the Volga and the Vyatka, and the cargo-passenger ferry Petropavlovsk, the agency said, claiming that the strikes started a large fire. The claim could not be independently verified.

Russia-annexed Crimea declares 'emergency'

Authorities in Russian-annexed Crimea on Friday declared an "emergency situation" in a bid to ease the fallout from increasing Ukrainian aerial attacks on the peninsula.

The announcement comes amid fuel shortages and power cuts triggered by the Ukrainian attacks on logistics chains and oil facilities across Crimea, the rest of Russian-occupied Ukraine and southern Russia.

A satellite image shows the Sevastopol power substation after local officials said Ukrainian drones knocked out power in the biggest city in Russian-held Crimea on Wednesday. (Reuters: Vantor/Handout)

"A decision has been made … to sign decrees declaring a regional-level emergency situation in the Republic of Crimea and the city of Sevastopol," the Moscow-installed governor Sergey Aksyonov said in a post on Telegram.

The emergency situation would allow for a "rapid resolution of tasks related to ensuring the stable operation of all sectors", Mr Aksyonov said in the post.

Despite the ongoing war that has killed tens of thousands and ravaged swaths of Ukraine, Crimea has been a popular holiday destination for Russians.

Speaking to AFP by phone, a Moscow resident holidaying in Feodosia on Crimea's south-eastern coast said earlier this week that "everyone is afraid: locals and visitors alike".

"The sky was like Star Wars,"

she said.

Russia seized and annexed Crimea in 2014, though the vast majority of countries — including many of Moscow's allies — do not recognise the move.

The Black Sea territory holds special importance to Mr Putin, who hailed the annexation as a historic victory and has poured resources into the peninsula since 2014.

Ukraine says Crimea is an inalienable part of its territory and will never formally cede it.

Zelenskyy hints at a 40-day blitz of Russia

The major attack came hours after Ukrainian President Volodymyr Zelenskyy said on X that he had ordered "a 40-day influence operation," believed to mean an escalation of attacks, aimed at "compelling (Russia) to end the war" after US peace efforts over the past year yielded no breakthrough.

Ukraine has racked up a list of successful strikes, including hitting targets in Moscow and St Petersburg.

Mr Zelenskyy said he got further promises of foreign support when he attended a recent summit of G7 leaders, including from US President Donald Trump, and that the promised aid will help Ukraine step up its effort to force Mr Putin to the negotiating table.

A NATO summit next month could be another key moment in beefing up Ukraine's military.

Ukraine says three civilians killed and 20 wounded in Russian attacks

Two people were killed and seven others injured in Russian attacks on the north-eastern Kharkiv region over the previous 24 hours, regional head Oleh Syniehubov said on Friday.

Russian forces struck the city of Kharkiv and 16 other settlements across the region using guided aerial bombs and drones of various types, Mr Syniehubov said.

On Friday morning, another Russian drone attack on downtown Izium, a city in the Kharkiv region, killed a woman and wounded three other people, emergency services said.

Rescue workers put out a fire at a building destroyed after a Russian strike on Zaporizhzhia on Friday. (AP: Evgeniy Maloletka)

Other wounded people and damage were logged in attacks in the capital, Kyiv, the southern Odesa and Zaporizhzhia regions, and Sumy in the north-east, with some of the Russian assaults using powerful glide bombs.

Ukraine's defences overnight stopped 174 of 189 Russian drones, however four of seven Iskander-M ballistic missiles got through air defences and struck various locations, the Ukrainian air force said.

No Russian military build-up seen on border with Belarus, Ukraine says

Russia is expanding several of its military sites deep inside Belarus, but there is no build-up of forces near the Ukrainian border, a State Border Guard Service spokesman said on Friday.

Russia launched its 2022 invasion of Ukraine from Belarus, which borders both countries, and Kyiv has kept a close watch on developments there during the war.

Ukrainian intelligence units have detected no grouping or reinforcement of Russian units, equipment or personnel close to the border, spokesman Andrii Demchenko said in remarks to Ukrainian television.

However, Russia has a growing number of training grounds, bases and other sites deeper inside the country, according to intelligence units.

AP/AFP

In Venezuela, the earthquake started with a 'soft shake' and then the lights went out.

Extract from ABC News

By Lucia Stein, with Elizabeth Ostos and Lenner Castellanos in Caracas

• Topic:Earthquakes

3 hours ago

People gathering on the streets of Caracas after the earthquake. (Reuters: Gaby Oraa)

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As a rare one-two punch of earthquakes hit Venezuela this week, residents in the capital city of Caracas watched in horror as buildings shook and were sent "pancaking" before their eyes.

An initial 7.2-magnitude quake struck near the town of San Felipe on Wednesday just after 6pm, local time, and was followed a mere 39 seconds later by another, much stronger, 7.5-magnitude quake.

Roberto Quintero, a 17-year-old student in Caracas, had just walked into his mother's apartment block when one of the most powerful tectonic events to strike the country in the past century occurred.

The "doublet" triggered the collapse of a complex across the street, one of several buildings to give way in the capital as residents ducked for cover.

A ceiling collapses at a Venezuela airport as the earthquake strikes.

"[My mum] saw… [through] our window [which was] facing the other building that [it] was collapsing," he told the ABC.

He said she had been so frightened by what she had seen that she suffered a panic attack and was unable to leave her complex.

"Out of fear, she stayed locked inside," Mr Quintero said.

It was only after some neighbours began fleeing that his mother was able to make her way out of the building and to a nearby car park, where the pair decided to shelter.

Mr Quintero is still waiting for news on whether it is safe to return to his mother's complex and if anyone was hurt in the building collapse across the street.

Roberto Quintero says his mother watched a building collapse from her apartment complex. (ABC News)

"We're waiting to see what Civil Protection says to see if we can enter the building," he said.

Many other locals are in similar situations, with authorities reporting entire buildings crumbling during and after the quakes.

Almost two days after the quakes, the Venezuelan government said it feared hundreds of people remained trapped under rubble. 

The death toll had risen to 920, national assembly president Jorge Rodríguez said, and more than 50,000 people had been listed online as missing.

Extensive search and rescue efforts are continuing, but predictive modelling from the United States Geological Survey indicates the death toll may dramatically rise in the coming days.

A collapsed building in La Guaira, a coastal city about 30 kilometres north of Caracas. (Reuters: Maxwell Briceno)

Videos shared online offer some early insights into why the earthquakes were so deadly, with CNN analysis finding that some residential towers failed in a "pancake mode" of structural collapse.

These types of collapses can be extremely dangerous, as they were in Türkiye in 2023 and in California in 1989.

And with the clock ticking in the search for survivors, residents fear an already fraught effort to clear the rubble will be further complicated by a lack of much-needed machinery.

Venezuela's lack of 'earthquake preparedness culture'

Venezuela sits on one of the most active tectonic boundaries in South America, where the Caribbean Plate slides up against the South American Plate.

It has a history of sudden movements, with the biggest in recent memory occurring along the Bocono fault system in 1812. Approximately 30,000 people were killed in the disaster.

When the first earthquakes struck on Wednesday, it triggered another along the same fault, in a rare event called a "doublet".

The result was that "twice as much energy" was released, said Adam Pascale, the chief scientist at the Seismology Research Centre in Australia.

To give an Australian comparison, the Venezuela earthquakes would have been at least 20 to 30 times bigger and up to 250 times more powerful than the magnitude-5.9 earthquake that struck near Mansfield in Victoria five years ago.

"If you imagine the shaking that we experienced in Melbourne … going on for a minute or longer and being much stronger, it sort of starts to give you an idea of how terrifying it must have been for the people in Venezuela," Mr Pascale said.

Unlike other countries, including the United States, Mexico and Japan, Venezuela does not have an early earthquake warning system of sensors to detect the first waves of an earthquake.

That meant when the tremors first hit, many people were caught by surprise and did not have an explanation for what was happening.

One resident in Caracas told the ABC they only realised they were in danger when the lights went out.

"We don't have that earthquake preparedness culture," 31-year-old Giordy Ardila said.

"While [our electronic] devices were making noise, the power went out, and it started to shake softly."

Some residents have reported their phones and laptops blaring with Google's Android Earthquake Alerts system shortly before and after the quakes struck.

The system relies on crowdsourced data from sensors in individual mobile phones to detect seismic events and issue warnings to other users in the area.

"Suddenly, the magnitude of the earthquake began to increase. I told my girlfriend to leave the apartment and go to the parking lot," Mr Ardila recalled.

Giordy Ardila has supplied tools and equipment to the rubble clearing efforts. (ABC News)

Those who could evacuated swaying buildings in Caracas and were forced to stay outside until authorities could give the all-clear.

A CNN report analysed dozens of videos from the quake and found that some structures appeared to have suffered a "pancake collapse", a phenomenon which occurs when a building collapses in on itself from the top down.

Emergency services worked through the night after the earthquakes, which struck shortly after 6pm, local time. (Reuters: Gaby Oraa)

These collapses "tend to 'stack' floors on themselves, bringing all their weight down nearly square on the floor below," Gregg Favre, a former commanding officer with the St Louis Fire Department and experienced special rescue team member, told CNN in 2021.

"This continues down, accumulating more weight and stress as the structure falls," he said.

What emerges is something resembling a stack of pancakes.

Scientists noted in the aftermath of Türkiye's 2023 earthquake that many of the destroyed buildings there appeared to have been built from concrete without adequate seismic reinforcement, leading to "pancake collapse".

Investigations into the causes of Venezuela's many building collapses, and the extent of the damage are still ongoing, but some experts have noted that many of the country's buildings may not have been built to withstand such powerful earthquakes.

Informal housing and poorly constructed structures often standing on insecure ground are common in South America, putting the region at greater risk from natural disasters.

Locals using bare hands, borrowing tools to clear rubble

In the days since the quake, rescuers have focused on clearing rubble and debris, hoping to find survivors in the small pockets of destroyed buildings.

They have been joined by families with missing loved ones, who have flocked to the areas hardest hit in search of any updates about their condition.

A car smashed by a collapsed building after the earthquakes in Caracas. (AP: Adrian Naranjo)

Nubia Gómez, a 60-year-old mother from Maracaibo, the second-largest city in Venezuela, drove nine hours to the capital to help search for her daughter after failing to reach her.

"I texted my daughter to ask if she had felt the earthquake and if she was OK," she told the ABC.

"And she never answered me on her cell phone. Then I saw a video on Instagram of the collapsed building."

Ms Gómez said she did not feel the tremors at home when the quakes first struck, only learning of what had happened from friends.

Nubia Gómez is praying for her daughter who she fears is trapped in rubble. (ABC News)

She thought immediately of her daughter, who lived in Caracas, and got in her car to make the journey to the capital to help find her.

Ms Gómez is praying desperately for any news of her loved one, fearing she may still be trapped under rubble and unable to call for help.

Rescue teams are working hard to clear piles of concrete slabs from areas that were once high-rise apartment buildings.

However, locals have reported a shortage of available machinery, leading some to use their bare hands to dig through the rubble.

Mr Ardila owns a store that sells tools and hardware in Caracas, and said he and a few others have offered what they can to help with the effort.

"I brought a cordless rotary hammer because I thought they were going to have electrical problems," he said of the clearing efforts.

"[I also brought] a grinder and a sledgehammer."

He said another young man brought a cordless hacksaw.

"We all have to help each other," he said.

"We have to get out of this situation together; we have to move this country forward, in good times and bad."

Rescue workers and desperate residents are racing against the clock to clear the rubble and debris left by the quakes in an effort to reach missing loved ones. (Reuters: Maxwell Briceno)

How on earth has the global economy survived this ongoing war?

Extract from ABC News

Analysis

By Laura Tingle

• Topic:Business, Economics and Finance

3 hours ago

The UN this week paused its operation to escort ships through the Strait of Hormuz after a vessel reported an attack.  (Reuters)

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An unfortunate side effect of the incompetent and erratic negotiating tactics of the Trump administration — not to mention the regular apparent gaming of financial markets — is that some of the underlying stories in the global economy can get overlooked. 

People are kept perpetually on their toes about whether a deal with Iran has, or hasn't been reached; whether the Strait of Hormuz is, or isn't, open; or whether Donald Trump thinks the Iranians are "terrible people" or "good people".

This can obscure facts such as that the world economy has not actually collapsed as had been feared.

The global oil price fell back to around $US70 a barrel this week: much better than all the hovering it was doing for months around, and above, $US100 a barrel.

It's still above the $US50 to $US60 a barrel prevalent before the whole Iran thing started — and that continues to have inflationary effects around the world.

But whatever happens in talks between Iran and the United States, the sorts of prices now being quoted for oil reflect the fact that the global economy has somehow managed to shuffle itself around so that the 20 per cent cut in oil supply often quoted to be a result of the closure of the Strait of Hormuz has not had the heart-stopping impact that was once feared by economists and governments around the world in March.

Just why that has happened provides a fascinating insight into the way the world economy works these days.

An unfortunate side effect of the incompetent and erratic negotiating tactics of the Trump administration is that some of the underlying stories in the global economy can get overlooked. (Reuters: Evelyn Hockstein)

China had oil in storage 

For starters, a much-overlooked factor may be that China — one of the biggest customers for oil from the Persian Gulf — simply cut its purchases in response to the crisis by a jaw-dropping 40 per cent.

This was on top of the fact that, according to an analysis released by the International Energy Agency this week, the global oil market "went into this crisis with significant buffers".

"In February, before the outbreak of hostilities, the IEA's market balances indicated a surplus of 3.7 million barrels a day for 2026 as a whole," the agency says.

"Global oil supply had been running ahead of demand for 12 months, with the amount of oil in storage reaching 8.2 billion barrels.

"China, notably, had for many months been hoovering up huge amounts of oil imports and putting them in storage.

"This, combined with demand reductions both by refiners and end-users enabled China to slash crude oil imports by 40 per cent — or 4.6 million barrels per day — between February and May, helping significantly to ease wider pressures in the global market."

There have been other big changes, including by Australia, which started buying oil from the US and Africa, among other less previously frequented markets.

Everyone quickly diversified

Countries have quickly diversified their markets. The United States increased its crude and petroleum product exports by nearly 25 per cent compared to the previous year.

Oil exports from the now earthquake-shattered Venezuela have jumped by over 40 per cent and Brazil's by a third.

Singapore is one of the world's biggest oil refiners. It is now importing over 10 per cent of its crude from the United States, compared to zero previously.

Those changes are on top of the shifts that producers in the Gulf rapidly implemented to avoid the Strait of Hormuz, such as the big increase in oil that Saudi Arabia started pumping through its East West pipeline to the Red Sea, and the UAE increasing its shipments to Fujairah — a port outside the strait.

This rapid capacity to adjust away from reliance on particular suppliers seems to have been a feature of many recent crises caused by global conflicts.

UN pauses Strait of Hormuz evacuation

The UN pauses its operation to escort ships through the Strait of Hormuz after a vessel reports an attack.

The German economy appeared to be on its knees after the Russian invasion of Ukraine in 2022, with the simultaneous closing down of oil and gas exports from Russia upon which Germany, and much of the rest of Western Europe, relied.

Within months, Germany had three floating LNG platforms in place. It had five processing centres operational within 12 months.

Crises like that one in 2022 seem to have made many countries much more focused on a diversity of energy supply options.

Analysts say the switch to renewables, electric power and vehicles also had a huge impact in stopping China being too hard hit by the sudden cut in oil supply.

But beyond basic shifts in supply and demand, the crisis seems to have underscored a lower overall global reliance on oil and oil products as the world economy transforms what it actually produces.

The Wall Street Journal noted last week that "advanced economies have shifted to less energy-intensive services such as finance and healthcare from more energy-hungry manufacturing".

"Consumer appliances have been re-engineered to use less electricity and firms have squeezed out improvements in industrial processes to save energy, a lesson Europe in particular took to heart after the Russian invasion of Ukraine in 2022."

There has also been fuel rationing, cutbacks in things like flight schedules, shorter working days and restrictions on air conditioning

The WSJ says one way to gauge how effectively economies are using energy is to calculate the amount of energy burned to generate a dollar of gross domestic product.

"Adjusted for inflation, energy intensity has fallen by about a third since 2000 in the US and Europe and by about 40 per cent in China, according to World Bank data, a shift that helps economies weather supply disruptions." 

Meanwhile in Australia 

All these developments raise interesting questions about where the global economy goes from here, and about geopolitics for that matter.

Poorer countries — like some of those in our region — did not have the buffers of oil and gas reserves and have been harder hit.

Treasury secretary Jenny Wilkinson told a Senate Estimates hearing earlier this month that "some of Australia's largest trading partners, such as China, Japan and Korea, possess large energy stockpiles and are relatively better positioned to navigate oil and fuel shortages".

Warning economic slowdown is just beginning

The economy grew just 0.3 per cent in the first quarter this year, gross domestic product per capita went backwards, and interest rate rises and cost-of-living pressures are weighing on households.

"However, other South-East Asian economies with lower energy reserves and slimmer fiscal buffers are vulnerable to shortfalls, with many already imposing measures to manage energy demand," Wilkinson said. 

There's also the question at home about how nimble Australia has proved to be, or needs to be in the future. It was certainly able to get new supply lines opened up pretty quickly.

Relationships in the region were both tested and improved in some cases by having to deal with the shock.

That might be good cause to review how a shared interest in energy security can work for all of us in the future.

Other parts of the world will certainly have learnt another lesson.

And one of those lessons must surely be about the value of diversification — not just in actual supplies but in exposure to geo-strategic risk.

That will hold big implications for the Gulf region. As those IEA numbers show, the world was already heading towards an oversupply of oil in the period immediately before the US attacked Iran on February 28.

The pressure would seem to be for world energy buyers to be wanting to diversify away from the Gulf, rather than towards it, in the future, no matter how much Gulf countries are able to find alternative transport routes.

Could the markets be underpricing oil, and is that a problem? (David Taylor)

Not without its economic costs

Things may never quite go back to the way they were, in other words, particularly given renewables are providing new energy sources.

The Atlantic noted this week that "although Yemen's Houthi rebels formally halted their two-year rocket campaign against Western ships in the area last November, just half as many oil tankers are making the passage compared with 2023".

Overall even if we have managed to avoid a global recession, higher inflation and slower growth is not a good backdrop for any society.

Of course, it is not just trade in oil that has been hit by the closure of the Strait of Hormuz.

In Australia, that can be seen by the broadening out from the oil price shock raising prices in areas like home building — just what you don't need in a housing affordability crisis.

It will therefore help stoke the flames of frustration and anger already felt in so many countries around the world, including Australia, where people are confronted by cost of living pressures, and the apparent in ability of governments to do much about them.

Laura Tingle is the ABC's Global Affairs Editor.