The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Peter Thal Larsen

LONDON, June 21 (Reuters Breakingviews) - Welcome back! The war with Iran is over, or at least on hold for now. Below, some reflections on what we learned from the conflict. Let me know what lessons I’ve missed. If this newsletter was forwarded to you, sign up here to get it in your inbox every weekend.

OPENING LINE

“The starring role in Germany’s bank M&A drama has gone not to the bidder’s CEO, but a series of opaque transactions known as total return swaps.”

Read more: How derivatives are clouding UniCredit-Commerz bid.

FIVE THINGS I LEARNED FROM BREAKINGVIEWS THIS WEEK

1. Elon Musk’s wealth equates to 4% of U.S. GDP – twice John D Rockefeller’s hoard when he died in 1937. (But it may not last)

2. None of the 95 major housing markets tracked by Chapman University qualified as affordable last year. ( Fixing that is hard )

3. Big tech firms had nearly $220 billion of “construction in progress” on their balance sheets at the end of 2025. (Watch out for the bezzle )

4. Wages, exports and economic growth in Northern Ireland have outpaced the rest of the UK. ( Success is at risk )

5. Pizza Hut in China offers pies topped with deep fried bullfrog. (Food chains are deglobalising )

PERSIAN INVERSION

So this is how it ends. The conflict that began with Donald Trump urging Iranians to “take over your government” came to a halt three-and-a-half months later with the U.S. president signing a ceasefire agreement in the Palace of Versailles, of all places. The truce is uneasy and may not last. Even so, it’s time to draw some conclusions.

First, the calculus of conflict has changed. Like Ukraine before it, Iran showed that a determined and resourceful country can match a much larger and better-equipped adversary. Cheap drones were crucial. The sight of the United Arab Emirates firing $4 million Patriot missiles to intercept unmanned Iranian aircraft that cost a fraction of that summed up the financial imbalance. Future aggressors will have to rethink.

Second, oil matters less than it used to. The International Energy Agency declared the closure of the Strait of Hormuz to shipments of oil and gas to be the worst energy crisis in history. Yet the price of Brent Crude futures never closed above $120 a barrel – lower than in the aftermath of Russia’s invasion of Ukraine in 2022. Stockpiles helped. So did oil traders who bet correctly that Trump would chicken out. But beneath it all is a realisation that oil plays a less pivotal role in the global economy. In 1974, gasoline accounted for about 5% of U.S. consumer spending. That figure is now 2%.

Third, financial markets will bear lasting scars. The oil price has dipped back below $80 a barrel, and the S&P 500 Index has gained 10% since the U.S. and Israel started bombing Iran. Yet government bonds tell a different story. Yields on 10-year sovereign debt issued by the United States, Great Britain, France and Japan are all roughly half a percentage point higher. Long-term interest rates should fall if inflation fears subside. Even so, the pain will linger in higher borrowing costs.

Fourth, economic warfare has backfired on the United States. Successive U.S. administrations had tightened economic and financial “chokepoints” to exert pressure on adversaries, starting with Iran. Yet the memorandum of understanding signed by Trump dangles the prospect of the U.S. removing all sanctions on the Islamic Republic. Persuading anxious banks to comply will be tricky. Even so, Iran effectively weaponised its own chokepoint in the Strait of Hormuz. Expect others to make the most of every piece of economic leverage.

CHART OF THE WEEK

Money managers around the world have been rushing to buy U.S. stocks. So too are punters in China. Investors in the People’s Republic have doubled their holdings of U.S. equities over the past five years, helped by soaring markets. China’s restrictive capital controls limit the flow, prompting people to open accounts in Hong Kong. Now a regulatory crackdown poses a challenge for the Asian wealth hub, writes Ka Sing Chan.

THE WEEK IN PODCASTS

I’ve been reading Charles Goodhart since first coming across his works as a student in the early 1990s. So it was a privilege to welcome the economist and former Bank of England official into The Big View studio this week, alongside his co-author Manoj Pradhan. We talked about why ageing populations and indebted governments are pushing up inflation and leaving central bankers unanchored.

European leaders are struggling to agree on a joined-up response to China’s trade onslaught. As German Chancellor Friedrich Merz and others met this week, Pierre Briancon joined Aimee Donnellan and Jonathan Guilford in the Viewsroom to debate Europe’s options.

PARTING SHOT

You’ve doubtless heard of Software-as-a-Service, where customers pay providers a regular fee for access to up-to-date technology. Innovation on the battlefield means the same model is spreading to the defence industry. The arrival of increasingly sophisticated technology and the need for flexibility on costs means more armies are coming around to Defence-as-a-Service. George Hay tots up the opportunities – and the risks.

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