2026-07-12 ATS briefing¶

US forces launch new strikes on Iran; Tehran closes Strait of Hormuz¶

The US has launched a third round of strikes on Iran in a week, and Tehran has responded by closing the Strait of Hormuz — a choke point for roughly a fifth of the world’s oil. This is not a skirmish. It is a direct confrontation with the global energy market at its centre.

The Strait’s closure is the sharpest escalation yet. Iran’s IRGC has effectively weaponised geography, turning a narrow waterway into a strategic bottleneck. For the US, this is a direct challenge to its role as guarantor of global trade routes — a role that underpins dollar hegemony. For Iran, it is a high-risk play: blockading the strait invites a naval response, but failing to do so would render its military posture hollow.

What is unfolding here is not simply a bilateral conflict. The US strikes and Iran’s retaliation expose the fragility of a global system that depends on uninterrupted flows of energy and capital. Every barrel of oil that does not move through Hormuz tightens supply, raises costs, and accelerates inflationary pressures already baked into the system. For capital, this is a nightmare: rising energy prices eat into profit margins, destabilise currencies, and sharpen the contradictions between competing imperial blocs.

The question for revolutionaries is not whether this escalates further — it will — but whether the working class in the affected regions can organise independently of the nationalist and religious frameworks each side is mobilising. The Strait of Hormuz is not a border dispute. It is a pressure point in a system that cannot afford to relieve the pressure.

Iran launches attacks across the Gulf after more US strikes¶

Source: Al Jazeera

By July 2026, the US-Iran confrontation has escalated into open, multi-front warfare. This article reports Iran launching missile attacks on US military sites in Bahrain, Kuwait, Jordan, and Qatar — including Al Udeid Air Base in Doha — in retaliation for fresh US strikes on Iranian territory. Emergency alerts have been activated in Qatar.

What is striking here is the geography. Iran is not striking Israel directly, but the network of US bases that ring the Gulf. This is a calculated military logic: hit the logistical nodes that enable US power projection, not the symbolic centre. It suggests Tehran has concluded that the US command structure, not just its regional proxy, is the immediate adversary.

The timing matters. The US has already bombed Iran; Tehran has now closed the Strait of Hormuz. That is not a threat — it is an act of economic warfare that directly targets the global oil supply chain. For capital, this is a nightmare scenario: a disruption not of demand, but of the physical circulation of a commodity on which accumulation still depends. If sustained, this will produce price shocks, supply bottlenecks, and a sharp contraction in profitability across transport, manufacturing, and energy sectors.

The contradiction here is not between two equal powers. The US is militarily dominant, but Iran has demonstrated it can impose costs that ripple through the world market. The question for the ruling classes is whether they can contain this conflict without triggering a broader breakdown — or whether the logic of escalation, once set in motion, overrides their capacity for restraint. For the working class, the immediate consequence is not geopolitical drama, but rising prices, disrupted supply chains, and the steady erosion of whatever material security remains.

US launches fresh strikes as Iran closes Strait of Hormuz¶

Source: BBC News

The Strait of Hormuz is closed. Iran has fired on a Cyprus-flagged tanker, the US has hit 140 Iranian military targets, and Tehran has retaliated against a US base in Jordan and multiple Gulf states. This is not a skirmish that escalated by accident. It is the logical outcome of a strategic impasse.

The US demands Iran publicly guarantee the strait’s openness and stop firing on commercial shipping. Iran, under a new Supreme Leader still consolidating power after his father’s assassination in a US-Israeli strike, cannot afford to appear to capitulate. The language from Tehran is not the posturing of a state looking for a face-saving exit. “The era of one-sided deals is OVER,” says the parliamentary speaker. The new ayatollah frames vengeance as the “will of the nation,” independent of any individual leader. This is a regime binding its own legitimacy to confrontation.

What is revealing is the economic dimension. The strait handles roughly a fifth of global oil consumption. Its closure is not a symbolic threat; it is a direct assault on the circulation of a commodity on which the entire global economy depends. The US response — hitting coastal surveillance and telecommunications — suggests Washington is trying to restore the conditions for that circulation by force, not by negotiation. But force cannot resolve the underlying contradiction: Iran has the physical capacity to disrupt the strait, and the political need to do so. Every US strike that fails to reopen the waterway confirms the limits of military power.

The ceasefire is dead. Talks continue, but they are a formality. The real question is whether the US can sustain a campaign that disrupts Iranian capability without triggering a broader war it cannot afford, or whether the closure of the strait forces a reckoning with the fragility of global supply chains that capital has spent decades pretending does not exist.

Why This Energy Shock Is Different¶

Source: Project Syndicate

The Gulf ceasefire collapsed after three weeks. Iranian strikes on commercial shipping in the Strait of Hormuz were met with US retaliation, revocation of Iran’s oil waiver, and a declaration that the diplomatic understanding is finished. Yet Brent crude hit only $79 — a jump, but nowhere near April’s $120 peak when the strait was fully closed.

The author’s central point is sharp: this shock is structurally different from recent ones. Previous energy crises rerouted supply; this one destroys it. The standard toolkit — strategic reserves, demand management, diplomatic back-channels — assumes the problem is distribution. Here, the problem is production capacity itself, taken offline by direct military confrontation at a chokepoint.

That gap between escalating war and relatively restrained prices is not a sign of stability. It reflects the market pricing in a violent renegotiation of passage terms rather than outright blockade — for now. But the underlying logic is that the Gulf’s role as the swing supplier of marginal barrels is no longer reliable. The global energy system is being forced to operate without its usual shock absorber.

The implication for the hosts: this is not a repeat of 1973 or 2022. Those were price shocks within a functioning system. This is a supply shock that exposes the system’s inability to absorb the loss of a key node. If the Strait becomes periodically contested rather than reliably open, the entire architecture of global energy pricing — and the fictitious capital built on it — becomes unstable. Fiscal and monetary coordination can cushion the blow for the most exposed, but they cannot rebuild destroyed capacity or guarantee passage through a war zone.

Developing countries spend more repaying foreign debt than on education, UN reveals¶

Source: The Guardian

Here is the summary and analysis for the hosts of Against the Stream.

The UN’s latest figures confirm a brutal arithmetic: in 113 developing countries, servicing foreign debt now consumes more public money than education. In sub-Saharan Africa, the ratio is 3.6 to one. Eighteen of the most indebted nations spend five times more on creditors than on classrooms; Sri Lanka tops the list at sixteen times.

This is not a failure of policy. It is the normal functioning of a system where capital, having overaccumulated in the core, must extract value from the periphery to maintain its own rate of return. The debt is not a temporary imbalance but a permanent mechanism of discipline. Every dollar sent north as interest is a dollar that cannot fund a teacher’s salary or repair a school roof. The result is a self-reinforcing trap: austerity weakens the economic base, which reduces the capacity to repay, which demands deeper austerity.

The timing is significant. Aid to education has already fallen by over a fifth since 2023, with US and European cuts accelerating the decline. But aid was always the fig leaf on a system that extracts far more than it gives. The real story is the structural transfer of wealth from the poorest to the richest, enforced by a debt regime that private creditors—often based in London and New York—can block any attempt to restructure.

Debt Justice notes that repayments hit a 35-year high last year. This is not a crisis of liquidity but of legitimacy. When a system requires children to go without schooling so that bondholders in the City of London can be paid, the contradiction is not technical—it is political. The question is whether the growing impossibility of this arrangement will produce anything beyond more calls for “reform” within the same legal framework.

Geopolitical fragmentation reshaping shipping¶

Source: Hellenic Shipping News

The Baltic Exchange panel at Posidonia offers a useful window into how capital is adapting to a world it no longer fully controls. The speakers describe a shift from an era of cheap money and hyper-optimised supply chains to one defined by geopolitical risk, energy security, and regionalisation. This is not simply a return to protectionism — it is the material consequence of decades of overaccumulation now colliding with inter-imperialist rivalry.

Alex Haubert’s observation is the most revealing: when capital was abundant and risk was priced at zero, supply chains were stretched to their absolute limit in pursuit of efficiency. That model has broken. The pandemic exposed the fragility of just-in-time logistics, and rising interest rates have made commodity financing far more expensive. The result is a system where resilience and security compete with cost — a contradiction that shipping must now navigate daily.

George Mangos goes further, describing “two entirely separated fuel distribution systems” emerging alongside a fractured world order. This is not hyperbole. The US and its allies are actively decoupling from Chinese-linked supply chains, while China is building parallel infrastructure. Shipping, as the circulatory system of global trade, is feeling this split directly.

Eva Tzima’s blunt assessment that China is “a big winner” from recent disruptions is worth noting. It suggests that US-led efforts to contain Beijing may be accelerating the very multipolarity they seek to prevent. Meanwhile, smaller shipowners are squeezed — too exposed to navigate competing blocs, too small to absorb rising risk.

The panel’s conclusion that trade volumes will keep growing is plausible, but it misses the deeper point. Growth under conditions of fragmentation is not the same as growth under liberalised globalisation. It is more volatile, more politicised, and more prone to sudden disruption. For revolutionary politics, the key takeaway is that the ruling class cannot stabilise the system it built. Every solution — reshoring, regionalisation, decoupling — creates new contradictions.

Tanker Market: West Africa Crude Oil Exports Nosediving in 2026¶

Source: Hellenic Shipping News

The headline is dramatic, but the real story is more structural. West African crude exports fell 10.4% year-on-year in the first half of 2026, after a brief rebound in 2025. That rebound now looks like a blip in a longer decline.

The data reveals a shifting global oil map. Arabian Gulf exports collapsed by 30.7%, a direct consequence of the ongoing war there. That gap is being filled by South America (up 31.5%) and the US (up 20.5%). Russian exports, meanwhile, edged up 3.5%, maintaining their share despite sanctions. The old centres of gravity are breaking apart.

West Africa is caught in the middle. Its two main customers — China and the EU — both bought less. Chinese imports from the region fell 30.9%, the lowest first-half volume on record. EU imports dropped 16.1%. China’s overall crude imports fell 14.2%, signalling a genuine demand slowdown, not just a shift in suppliers. The EU’s marginal increase in total imports masks a clear move away from West African grades.

This is not simply a story of competition. It reflects a deeper fragmentation of global trade routes. The war in the Persian Gulf, the re-routing of Russian oil, and the rise of US and South American production are reshaping the map faster than most predicted. West Africa, lacking the deep state backing or strategic heft of the new major players, is being squeezed out.

For the tanker market, the implications are clear: longer hauls from the Americas to Asia and Europe, but less volume overall from the traditional Atlantic basin suppliers. For the region itself, declining export revenues mean increased vulnerability to debt and political instability. The brief 2025 recovery was a mirage.

Primary deficits: a short history¶

Source: FRED Blog

The FRED Blog’s piece on primary versus total deficits is a textbook exercise in how official economics obscures more than it reveals. The distinction itself is useful: the primary deficit strips out interest payments on existing debt, giving a cleaner picture of whether current tax and spending policy is adding to the stock of debt. But the framing is telling.

The article treats the post-WWII and 1990s surplus episodes as if they were simply the result of prudent fiscal management. What’s missing is any account of why those surpluses occurred. The post-war period was defined by a unique historical conjuncture: US industrial dominance, a captive global market, and a working class that had won concessions through struggle — concessions that were then partially clawed back through inflation and Cold War spending. The 1990s surplus was built on a stock market bubble that inflated capital gains tax revenues, and on welfare “reform” that slashed social spending while mass incarceration expanded the state’s coercive apparatus. This wasn’t fiscal discipline; it was class war by other means.

The real story is the long-term trend. Since 2000, the US has run near-continuous primary deficits, punctuated by crisis-driven spikes. This is not a failure of policy but a structural feature of a state that must simultaneously subsidise capital (through bailouts, tax cuts, military contracts) and manage the social fallout of a system that cannot employ or sustain its population. The gap between total and primary deficits — currently widening as interest rates rise — reveals the growing weight of past borrowing. The state is increasingly borrowing just to pay the interest on what it already owes. That is the fiscal expression of a system in decay: fictitious capital feeding on itself, with no productive base to justify it.