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Global Briefing May 18

Ukraine Drones Hit Moscow Region; Iran War Presses Bond Markets

Ukrainian President Volodymyr Zelensky confirmed overnight drone strikes on the Moscow region, with Russia saying it intercepted 556 drones across the country; Belarus and Russia opened the first joint nuclear-weapons exercises since the Oreshnik missile was deployed to Belarus in December 2025. Sovereign bond yields jumped — US 10-year above 4.5 percent on May 13, Japan's 10-year at a 1990s high of 2.7 percent — as the prolonged Hormuz closure pushed oil durably above $100; Foreign Policy compiled the war's US tally at 50–60 percent of Patriot stocks used, nine Gulf bases damaged, 13 service members killed. G7 finance ministers convened in Paris with Brazil, India, South Korea and Kenya at the table; Turkish FM Hakan Fidan called Israel's interception of 25 Gaza-bound flotilla ships "piracy" from Berlin; Germany unveiled a €10-billion civil-defence package and Cuba's Díaz-Canel warned of a "bloodbath" if Washington struck.

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Zelensky confirms 'fully justified' Ukrainian drone strikes on Moscow region as Russia says it shot down 556 drones overnight

President Volodymyr Zelensky said overnight Ukrainian drone strikes on the Moscow region were "völlig gerechtfertigt," with long-range drones reaching targets 500 km from Ukraine's border; Russia's defence ministry reported intercepting 556 Ukrainian drones across the country and Moscow Mayor Sergei Sobyanin logged at least 12 wounded near a capital oil refinery while Region Governor Andrei Vorobyov reported three killed. Russia answered with a strike package on Odesa and Dnipro that wounded at least 12 — including an 11-year-old in Odesa and a child in Dnipro, where the roof of a 24-storey building and a pyrotechnics warehouse caught fire. Former chancellor Angela Merkel publicly criticised Europe's diplomatic posture at the Republica conference, and a Ukrainian drone packed with explosives crashed near Utena in north-east Lithuania.

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Iran retained 70 percent of its missile stockpile while the US burned through half of its Patriot stocks and 9 Gulf bases were damaged, Foreign Policy review of war costs finds

US intelligence cited by the New York Times shows Iran still holds 70 percent of its prewar missile stockpile, 70 percent of its mobile launchers, and operational access to more than 90 percent of its missile sites along the Strait of Hormuz, Foreign Policy editor in chief Ravi Agrawal wrote on May 18; the Pentagon's counterpart losses include 217 damaged structures across 15 US bases, at least 9 in Bahrain, Kuwait, Iraq, the UAE, and Qatar significantly hit, half to 60 percent of Patriot defense missiles expended, a third of US Tomahawk stocks, 13 US service members killed and more than 400 injured. US gasoline is up nearly 50 percent year-on-year and diesel 59 percent, the IMF cut its 2026 global growth forecast from 3.4 to 3.1 percent and Russia has doubled monthly oil revenues since the war began. Allies — from Merz in Berlin to host countries in the Gulf — are publicly questioning US reliability.

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Russia and Belarus begin joint nuclear weapons drills near EU and Ukraine borders

Belarus and Russia launched joint military exercises on Monday, May 18, practicing the delivery and preparation of nuclear munitions. The Belarusian Defense Ministry said the drills involve missile forces and aviation, aiming to improve readiness for using "special munitions" from non-standard deployment areas. Ukrainian President Volodymyr Zelensky has warned that Russia is trying to draw Belarus deeper into the war, while Kyiv's Foreign Ministry condemned the exercises as an "unprecedented challenge" to global security.

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Klingbeil tells Paris G7 the Iran war is a 'serious threat to the global economy' as Hormuz blockade tops finance ministers' agenda

German Finance Minister Lars Klingbeil told reporters before flying to Paris on Monday that the Iran war and a potential closure of the Strait of Hormuz are a "ernsthafte Bedrohung für die Weltwirtschaft," as G7 finance ministers — Germany, France, the UK, Italy, Japan, Canada and the US — began two days of talks under France's 2026 presidency. The Paris agenda also covers global-trade imbalances, supply of critical raw materials, financing for developing countries, terrorism and organised-crime financing, and Ukraine support; finance ministers from Brazil, India, South Korea and Kenya joined the table. Chancellor Friedrich Merz separately condemned Iran's drone attack on the Baraka nuclear plant in the UAE and demanded Tehran open Hormuz 'ohne Einschränkungen.'

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