Good morning. For decades, the Persian Gulf’s energy map converged on a single chokepoint: the Strait of Hormuz. Now, spurred by the Iran war, the region’s petrostates are rushing to draw new lines to circumvent it.

• Major construction: Across the Gulf, governments are pouring billions into new oil pipelines, rail corridors and energy storage hubs to bypass the waterway in what is set to become one of the most durable outcomes of the conflict. The new energy links are part of a broader redrawing of the region’s logistics map, shifting trade toward trucking, rail and new ports.
   
• New options: Even if Washington and Tehran reach a deal to reopen the strait and maritime exports resume, the shift toward an export network with multiple exits will endure because the conflict has proved that robust contingency plans are essential, officials and analysts say. Saudi Arabia’s ability to export oil via a previously underused fallback pipeline demonstrated the strategic value of a backup, while in recent weeks the United Arab Emirates and Iraq have launched plans to expand pipelines of their own.
   
• Bypassing the chokepoint: The stakes extend far beyond the Gulf. Bypassing a waterway that once moved a fifth of the world’s oil will reshape how securely energy reaches all corners of the globe. The conflict showed “too much of the world’s energy still moves through too few chokepoints,” said Sultan Al Jaber, the U.A.E.’s minister of industry and advanced technology, at a recent Atlantic Council forum.

Nordea faces potential $1 billion fine over AML failures.

Nordea Bank is facing a potential fine of more than $1 billion for alleged anti-money-laundering failures in Denmark, Risk Journal reports (free link).

Danish prosecutors have asked a court to order the bank to pay 6.6 billion kroner to resolve a case alleging lackluster compliance controls that allowed Russian clients to conduct suspicious transactions through the bank, according to a person familiar with the matter. The request came near the end of a year-long trial, with a decision expected in October, the person said.

JPMorgan, Citi and big banks plan new tokenized deposit system to answer crypto.

The largest U.S. banks plan to launch a tokenized deposit network next year, an attempt to stave off threats from crypto companies that are seeking to wade deeper into their territory under President Trump.

The new network will connect traditional payment rails with the infrastructure that digital assets run on. It will be operated by a real-time payment network company called the Clearing House, which is co-owned by JPMorgan Chase, Bank of America, Citi, Wells Fargo and other large commercial banks.

What it means. The move marks one of the most significant efforts yet to open up the crypto world to the banking industry. It would allow tokenized deposits to move instantly across blockchain technology with 24/7 settlements.

• President Trump said he plans to nominate Todd Blanche to be attorney general, giving a show of confidence to his former criminal defense lawyer, who has refocused the Justice Department to benefit the president’s allies and target his critics.
   
• Texas Attorney General Ken Paxton has launched an investigation into Celsius Holdings to probe whether the company knowingly marketed energy drinks toward children and teenagers.
   
• Shares in London-listed financial groups with a large presence in Asia fell on fears that new rules would curtail mainland Chinese investors’ use of Hong Kong bank accounts.
   
• The Federal Reserve is seeking more information from banks on their exposure to financial institutions outside the traditional banking sector, such as private-credit funds, as regulators try to keep pace with the rapid growth of banks’ lending to less transparent pockets of financial services.
   
• The Food and Drug Administration has launched a safety study of the abortion pill, also known as mifepristone, a step that could pave the way for the Trump administration to restrict how it is distributed and used.

Anthropic urges global pause in AI development, flags ‘self-improvement’ risk.

Anthropic is calling for top artificial intelligence labs to weigh slowing the pace of development, suggesting that AI systems are advancing so rapidly that they may soon be able to improve themselves without human intervention in ways that could pose significant societal risks.

The ability to slow global AI development would “likely be a good thing,” the company said Thursday in a blog post that disclosed internal data documenting how quickly its most advanced models are improving.

• U.S. Officials Discuss Taking Financial Stakes in AI Industry
• Top AI CEOs Call for Law Protecting Against Biological Weapons

Renewed Israel-Lebanon ceasefire is already under strain.

Israel and Lebanon’s renewed ceasefire came under pressure within hours of its agreement, as Israel and Hezbollah militants exchanged fire on Thursday and both sides cast doubt on the extent of their participation in the agreement.

The deal, hammered out this week in talks among Lebanese, Israeli and U.S. officials, is contingent on Hezbollah halting attacks on Israeli forces and withdrawing fighters from heavily contested southern Lebanon, the U.S. State Department said.

• Iran Ratchets Up Pressure on Trump With Kuwait Airport Attack

• Russia’s elite is souring on the war. President Vladimir Putin doesn’t seem to care.
   
• The eurozone’s economy contracted in the first quarter, driven by declines in output in Ireland and France, complicating the European Central Bank’s task of cooling rising inflation without unduly damaging economic activity.
   
• U.K. businesses polled in May expected to raise their prices at a faster rate, but wage increases were seen slowing, according to a Bank of England survey released Friday.
   
• The Reserve Bank of India monetary policy committee revised down its growth forecasts and increased its inflation projections, but voted unanimously to hold the policy repo rate at 5.25%.
   
• The oil shock triggered by the U.S.-Iran conflict has damaged the global economy’s prospects, Fitch Ratings warned, as it cut its growth forecasts and raised its outlook for crude prices for the year.

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• Republican senators stopped short of using their political leverage to kill President Trump’s $1.8 billion “anti-weaponization” fund, approving a critical immigration-enforcement bill without adding language reining in the controversial program.
   
• Now you can get a Subway sandwich with your Walmart delivery.
   
• The IPO market is so hot a 140-year-old silver mine just went public.
   
• Investors are trying to pull more money from the biggest private-credit fund in the world.
   
• Canada’s government will set up a technology growth fund to help fund promising artificial-intelligence companies, part of the hundreds of millions of dollars it plans to pump into building a homegrown AI industry and encourage adoption of the technology.