2026-06-18 ATS briefing¶

Oil prices fall, stocks rally as US, Iran sign framework to end war¶

The US-Iran interim peace agreement has produced the predictable financial reflex: oil down, equities up. Brent crude fell nearly 2 percent, while Tokyo and Seoul hit record highs. Markets are pricing in the restoration of normal circulation — the Strait of Hormuz reopening, supply chains unblocked, the war premium evaporating.

But beneath the rally lies a deeper contradiction. The war was never simply about oil prices. The US-Israeli campaign against Iran, launched in February, was an attempt to discipline a rival state that had successfully integrated itself into global energy markets on its own terms. The blockade and the bombing were meant to reassert control over the strategic chokepoint. The interim agreement, mediated by Pakistan, suggests that project has failed — or at least been postponed.

The real tension is between the immediate needs of capital and the longer-term requirements of US imperial strategy. Capital wants cheap, predictable energy. The US state wants to degrade a competitor. These two imperatives are now pulling in opposite directions. The stock rally celebrates the victory of the first over the second — but only for now.

The shipping industry’s scepticism is telling. BIMCO, representing shipowners, has refused to treat the agreement as a green light. Too many details missing, too many broken promises. This is not merely caution. It reflects a structural problem: the war has destroyed the trust that makes commercial circulation possible. Even if the strait reopens, the conditions for smooth accumulation have been damaged. The recovery in asset prices may prove more fragile than the headlines suggest.

G7 tankers support high Russian crude exports amid US sanctions exemption¶

Source: Hellenic Shipping News

The US has issued three consecutive 30-day sanctions waivers on Russian oil since March, temporarily suspending the $60 price cap. The stated reason is to ease supply fears while Hormuz traffic is disrupted by the Iran conflict. The result: G7-linked tankers lifted 33.2% of Russian crude exports in May, the highest share since July 2025, and 29.7% in the first half of June. Urals crude is now selling at $86–90 a barrel, more than double its pre-war price.

This is not a story about sanctions failing. It is a story about sanctions succeeding in their real function. The price cap was never designed to starve Russia of revenue — it was designed to keep Russian oil flowing onto world markets while skimming the profits for Western insurers, shippers, and financial intermediaries. The waivers simply remove the pretence. With Iranian supply disrupted and global prices under pressure, the US needs Russian barrels to prevent a spike that would destabilise its own economy. So the cap is suspended, the tankers keep loading, and the Greek shipowners — who publicly insist they do not operate in the shadow fleet — collect record freight rates moving Russian crude to Indian refineries.

The contradiction is plain. The G7 announces new clampdowns on maritime services while its members’ vessels carry a third of Russia’s exports. Trump signals the waivers may end once the Iran deal is signed, but that depends entirely on whether the global oil market can absorb the loss. If it cannot, the waivers will continue. The system has no mechanism for enforcing its own rules when they conflict with the imperative of capital accumulation.

China Is Pulling Up the Ladder Behind It¶

Source: Foreign Affairs

Here is a summary and analysis of the article for the podcast hosts.

The Foreign Affairs piece by Chatterjee and Subramanian argues that China’s export strategy is not just competitive but structurally predatory toward the Global South. The headline claim—that China is “pulling up the ladder”—is grounded in a specific material contradiction: China dominates both the new high-tech commanding heights (EVs, solar, batteries) and the old labour-intensive sectors (garments, footwear, furniture) that every successful developing economy has used to industrialise.

The authors quantify this. China’s manufacturing trade surplus sits at roughly $2.2 trillion, with between $700 billion and $1.4 trillion concentrated in low-skill sectors where poorer countries should have a natural advantage. Crucially, they argue that China’s share of value-added exports in these sectors has not declined, even as its share of gross exports has. This means China is not just assembling final goods; it is increasingly dominating the production of intermediate inputs—yarn, zippers, buttons—that form the supply chains poorer countries would need to build.

The real victims, they insist, are not workers in Detroit or Stuttgart, but the factories never built in Addis Ababa, Dhaka, or Phnom Penh. This is a more profound form of uneven development than the usual “China shock” narrative. The first shock hollowed out American manufacturing. This one blocks the possibility of industrialisation for entire nations.

What is left unsaid, but is the logical conclusion, is that this is not a policy error or a temporary imbalance. It is the logic of overaccumulation playing out on a world scale. Chinese capital, having exhausted domestic avenues for profitable investment, is forced to maintain dominance across the entire manufacturing spectrum to absorb its own productive capacity. The result is a global division of labour that locks the periphery into permanent subordination. For revolutionary politics, the implication is stark: the classical path of national bourgeois development—export-led industrialisation—is being closed off by the very system that once promoted it. The struggle is no longer for a seat at the table, but against the table itself.

Developing-Country Risk Is Being Mispriced¶

Source: Project Syndicate

The GEMs Risk Database has been tracking actual default and recovery rates in developing economies for years. The data consistently shows that these countries perform better than the risk premia attached to them would suggest. Yet the gap between evidence and pricing persists. Songwe and Mohieldin argue this is not a technical glitch but a structural feature of how capital allocates itself under conditions of concentrated power.

The mispricing is not random. It concentrates capital in already saturated markets — US treasuries, European infrastructure, a handful of corporate giants — while starving precisely those regions where the potential for productive investment is highest. This is overaccumulation in its most concrete form: capital piled up where it cannot be profitably deployed, withheld from where it could be, because the pricing mechanism has been captured by institutional bias and herd behaviour.

The authors stop short of naming the mechanism, but it is not hard to see. The risk premium on developing-country debt functions as a political instrument. It disciplines states that might otherwise pursue independent development strategies, while channelling savings back to the core economies that issue the reserve currency. The result is a self-fulfilling prophecy: capital scarcity in the Global South becomes the justification for the very risk premia that produce it.

For revolutionary politics, the implication is indirect but real. The system cannot price risk accurately because it cannot afford to. If capital actually flowed to where returns were highest, the entire architecture of imperialist hierarchy would begin to unravel. The mispricing is not a bug. It is a necessary distortion.

Who holds US Treasury securities overseas?¶

Source: FRED Blog

The FRED Blog’s latest post on foreign holders of US Treasury securities is a dry data summary, but the numbers it reports point to something more interesting than the usual "who owns our debt" anxiety.

As of March 2026, the nine largest foreign holders — led by Japan, the UK, and mainland China — collectively hold about 45 percent of foreign-held Treasuries. That share has been stable since the early 2000s. What has shifted is the ranking within that group. The post does not specify which countries have risen or fallen, but the implication is clear: the composition of creditor nations is changing, even if the total foreign share is not.

This matters because Treasury securities are not just any asset. They are the bedrock of the global dollar system — the safe asset that central banks, sovereign wealth funds, and private investors buy when they need to park dollars. A stable foreign share suggests that, so far, no major creditor has dumped US debt in a way that would force a crisis. But the shifting rankings hint at realignments beneath the surface. Japan and China, the two largest holders, have very different reasons for holding: Japan for yield and currency management, China for trade surplus recycling and geopolitical leverage.

For a Marxist analysis, the key point is not the identity of the holders but what the stability of foreign holdings reveals about the current phase of capitalist crisis. The US state's ability to borrow trillions at low interest rates depends on a global pool of buyers who have no better alternative. That is not a sign of strength. It is a symptom of overaccumulation elsewhere — capital that cannot find productive investment at home and so flows into US Treasuries, effectively subsidising American military and fiscal spending. The stability of the foreign share is the stability of a system with no exit. If that ever changes, the contradiction between US debt and global confidence will snap. For now, it holds.

How France Falls to the Far Right¶

Source: Foreign Affairs

The Foreign Affairs piece treats the rise of France’s National Rally as a political drama driven by immigration anxiety and Macron’s personal failures. This misses the deeper material logic.

Macron’s decade was not merely unsuccessful at boosting working-class incomes — it was structurally impossible. French capital, like capital everywhere, faces overaccumulation. The state responded with massive COVID and energy subsidies, adding €1 trillion to national debt. France is now “broke,” as the author notes, with debt at 118% of GDP. The centre cannot promise redistribution because the state is already cannibalising its own future to keep existing capital afloat.

Into this vacuum steps the RN. Its programme is economically incoherent — lower taxes plus higher spending — but that incoherence is not a bug. It is the form a crisis takes when the left has abandoned the terrain of class. The RN offers a political resolution to an economic contradiction: blame immigrants, blame Brussels, blame Islam. The “civil war” rhetoric Bardella deploys is not just demagoguery; it is the necessary ideological cover for a state that can no longer deliver material improvements.

The author worries about a “2016 moment” for the EU. But the real rupture is not institutional. It is that French capital, having exhausted Keynesian palliatives, now faces a choice between a far-right presidency that will accelerate the breakdown of EU cohesion, or a deepening of the crisis that could reopen space for class struggle. The Republican Front that defeated Le Pen twice is dead because it had nothing to offer but more of the same. The question is not whether the RN wins, but whether the left can offer an alternative before the far right consolidates its grip on a bankrupt state.

The US-Iran Agreement Is a First Step¶

Source: Project Syndicate

The piece is paywalled, but the headline and opening paragraphs are enough to draw out the central claim: that a US-Iran memorandum of understanding is a welcome first step toward reversing the “stagflationary spillovers” of war.

El-Erian frames the agreement as a diplomatic fix for an economic problem. The logic is straightforward: open hostilities disrupted energy supply chains, drove up prices, and compounded inflationary pressures globally. A deal, therefore, promises to restore the flow of oil, ease price volatility, and give central banks breathing room. This is the liberal internationalist case for diplomacy — war is bad for business, peace is good for growth.

What is missing is any sense that the conflict itself was not a malfunction but a product of the system. The US-Iran confrontation did not arise from diplomatic failure alone. It emerged from a decades-long drive to contain and subordinate a state that refuses full integration into US-led imperial arrangements. The war was not an interruption of normal capitalist functioning; it was a violent expression of it — an attempt to discipline a recalcitrant node in the global energy network.

If a deal holds, it will not be because diplomacy triumphed over belligerence. It will be because the costs of continued disruption — for US allies in Europe and Asia, for domestic inflation, for the stability of dollar-denominated oil markets — exceeded the costs of a temporary truce. The memorandum is a tactical pause, not a resolution of the underlying antagonism.

For revolutionary politics, the lesson is not to cheer or mourn the deal, but to note that the capitalist class will manage its own crises when it must. The task is to be ready when it cannot.

Europe Cannot Afford Another Lost Year¶

Source: Project Syndicate

The piece is paywalled, but the headline and framing are revealing enough. Lars Sandahl Sørensen, head of the Danish employers’ federation, is delivering a familiar warning: Europe is falling behind, and the fault lies with policymakers who cannot deliver simple things — simpler rules, faster permits, affordable energy, a functioning single market.

What is striking is not the diagnosis but the impotence it reveals. European capital knows exactly what it needs. It has known for years. The Copenhagen Competitiveness Summit, with Macron and von der Leyen in attendance, was a stage for the bourgeoisie to plead with the political class to do its job. That such a summit is necessary at all is a sign of a ruling class that cannot rule.

The contradiction here is not between capital and labour — it is within capital itself. European industry faces a structural cost disadvantage, particularly on energy, that no amount of deregulation can fully resolve. The single market remains incomplete because completing it would require overriding national interests that no current political configuration can challenge. Permitting is slow because the state has been hollowed out, not because bureaucrats are lazy.

The "lost year" Sørensen fears is not a policy failure. It is the normal condition of a European capitalism that has exhausted its post-war dynamism and now competes from a position of relative decline. The demand for competitiveness is a demand for the impossible: a return to conditions that no longer exist.