2026-07-28 ATS briefing¶

Strait of Hormuz crossings drop 70% as tanker traffic shifts almost entirely to the Iranian route¶

The numbers are stark enough to bypass the usual hedging. Daily crossings of the Strait of Hormuz have collapsed from 45 to 13, and the vessels still moving have abandoned the Omani alternative almost entirely, with the Iranian route now carrying all traffic on some days. This is not a temporary rerouting. It is a structural reconfiguration of how oil moves out of the Middle East, driven by the intersection of war and insurance mathematics.

The Omani route was supposed to be the safety valve. It sits outside the official traffic separation scheme, theoretically offering a path for operators who want to avoid the Iranian option without braving the main strait. But insurers have not priced it as safe. Because the route lacks a pre-conflict risk history, premiums have not dropped meaningfully, making it a marginal choice rather than a genuine alternative. Capital, in the form of insurance underwriting, has effectively decided that an unmapped risk is no better than a known one, and traffic has concentrated accordingly.

The implications for supply are concrete. Kpler’s base case has shifted from a return to pre-war output of 27 million barrels per day by December to early 2027. Current outages sit at roughly 8 MBD, expected to rise back to 10 MBD and hold. The exception is the UAE, which has bypassed the strait entirely through pipeline networks and ship-to-ship transfers in the Gulf of Oman — a reminder that infrastructure, not just insurance, determines who can keep flowing.

The price signal confirms the physical tightness. Brent has moved from $70 to just under $100 per barrel, and the market structure has flipped from contango into backwardation of close to $5. That is not speculative froth; it is the market pricing barrels that are not arriving. The 90/10 route split is the live indicator to watch. A shift back toward the Omani route would signal de-escalation. Until then, the strait is effectively a bottleneck with one working lane, and the insurance industry has drawn the map.

Uganda begins emergency food handouts after 19 die from hunger¶

Source: The Guardian

The Ugandan government has been forced to organise its own large-scale food distribution in Karamoja after 19 confirmed hunger deaths and 1.5 million people facing acute shortages. The state stepped in because the usual humanitarian pipeline has collapsed — USAID cuts have slashed the budgets agencies like the World Food Programme relied on, and the WFP has already cut over a million refugees from assistance in Uganda alone. The government is now spending 45bn shillings (£9m) on 9,400 tonnes of relief food, a stopgap that treats the symptom while the underlying conditions remain untouched.

The article frames the crisis through drought, crop failure, and climate shocks, but the recurring pattern — a 2022 hunger crisis killed over 2,200 people — suggests something structural. Karamoja’s farmers lost their crops after the last meaningful rain in April, the start of planting season. The region has adequate rainfall and water routes to achieve food self-sufficiency, according to Agnes Kirabo of the Food Rights Alliance, but lacks the political will to invest in water infrastructure. This is not a natural disaster pure and simple; it is a governance failure that leaves a population dependent on rain-fed subsistence agriculture with no buffer, no irrigation, no strategic reserves.

The emergency distribution is a life-saving measure, but it also reveals the limits of the state’s capacity. The minister for disaster preparedness can stand at a primary school and promise no one will be left behind, but the same government has not built the systems that would make such promises unnecessary. Angelina Nakiru, a 21-year-old mother, goes to a gold-processing mill each morning to crush rock for a meagre wage to buy a cup of maize and beans — if she fails, her children sleep hungry. The grinding mill is not a job; it is a desperation strategy that extracts labour without providing subsistence.

The contradiction is concrete: the government can find 45bn shillings for emergency food after people die, but has not found the political will to invest in water infrastructure that would prevent the next drought from becoming a famine. The Karamoja regional development plan and promises of drought-resistant seeds are mentioned, but they remain plans, not material transformations. For the 1.5 million people in Karamoja, the difference between a crisis and a catastrophe is whether the rains come — and whether the state acts before the bodies are counted, not after.

Why Business Leaders Are Souring on AI¶

Source: Project Syndicate

The piece is behind a paywall, but the headline and opening paragraphs are enough to work with. Dambisa Moyo is describing a familiar rhythm: a wave of hype-led capital expenditure, followed by a hangover when the promised productivity gains fail to materialise on schedule. The billions poured into AI infrastructure over the past few years were never really about proven returns — they were a bet on future returns, backed by cheap credit and a desperate search for new fields of accumulation. Now that interest rates have stayed higher for longer, the patience of investors and boards has snapped.

The three risks Moyo flags — rising costs, intellectual property disputes, and cybersecurity threats — are real enough, but they are secondary. The primary contradiction is simpler: the technology has not yet demonstrated that it can reproduce capital at a rate that justifies the capital already sunk into it. This is not a failure of innovation; it is a failure of valorisation. The same dynamic played out with the dot-com bubble and, before that, with railway mania. Capital overcommits to a new technology, the gap between expectation and realisation becomes unsustainable, and a wave of write-downs and consolidation follows.

For the broader capitalist crisis, the significance is that one of the few sectors promising a new wave of accumulation is now looking shaky. If AI cannot deliver the productivity miracle that was priced into equity markets, then the system has one fewer escape route from its current stagnation. That does not mean AI disappears — it means the bubble pops, the weaker players are absorbed, and the surviving infrastructure is eventually put to more modest, profitable uses. The revolutionary left should note that this cycle of overinvestment and disappointment is not a bug in the system; it is how capital has always behaved when it runs out of obvious places to grow. The question is what happens when the next escape route also fails.

Productivity growth, as seen in 1996¶

Source: FRED Blog

The FRED Blog's retrospective on 1996 productivity data is a quiet bombshell dressed as a technical note. It shows that the official statistics available to Alan Greenspan in real time recorded average labour productivity growth of just 0.89% between 1989 and 1995. After the 1999 revision that reclassified software as capital investment, that figure jumped to 1.40%. Today it sits at 1.51%. The gap between what policymakers saw and what actually happened is not a rounding error — it is nearly 70% of the original measure.

This is not merely an accounting curiosity. Greenspan used the low official numbers to argue that the productivity gains from information technology were real but invisible, and on that basis he held off raising interest rates. The revision vindicated his instinct, but the episode raises a deeper question: if the statistical apparatus systematically undercounts productivity during periods of rapid technological change, then monetary policy is always flying blind at precisely the moment it matters most. The 1990s worked out — the boom continued, the revision caught up. But the same lag could just as easily produce a policy error in the opposite direction: tightening into a slowdown because the data has not yet registered the collapse, or keeping rates low while fictitious capital accumulates because the official numbers show no overheating.

For the current AI boom, the implication is uncomfortable. If the statistical agencies are again underestimating productivity growth, then the case for keeping interest rates high to cool an allegedly overheated economy is weaker than it appears. But if the opposite is true — if the AI-driven gains are more hype than substance, and the data is actually overstating things — then the policy error runs the other way. The 1996 episode does not tell us which scenario we are in. It tells us that the official numbers are not a neutral reflection of reality. They are a political instrument, revised years later, and the decisions made in the dark have already shaped the world we live in.

India’s Exam Worriers Become Democracy Warriors¶

Source: Project Syndicate

The resignation of India’s education minister is a genuine political scalp, but the protests that forced it were never really about exam reform. The trigger was a grading scandal in the National Eligibility-cum-Entrance Test for medical admissions, where inflated marks pushed the cut-off beyond reach for students who had played by the rules. That is the surface. Beneath it lies a structural breakdown: the education system has long functioned as a sorting mechanism for a labour market that no longer has enough decent positions to absorb the sorted.

India produces roughly 1.5 million engineering graduates a year and perhaps 100,000 jobs that actually require an engineering degree. The rest cycle through coaching centres, competitive exams, and temporary contract work, deferring the moment they must confront a job market that cannot use them. The protestors are not demanding that the sorting be abolished; they are demanding that the sorting lead somewhere. When the state cannot even guarantee that the exam itself is fair, the entire bargain — study hard, compete, and you will be rewarded — collapses.

The ruling Bharatiya Janata Party has built its legitimacy on growth statistics and aspirational nationalism. A generation that has internalised that aspiration now finds the promise hollow. The protests are not yet class-conscious in any explicit sense — they are still framed around merit and corruption — but the material conditions that produced them are the same ones that produce surplus populations across the Global South. The question is whether this anger finds a political direction beyond demanding a different minister.

Mamdani tackles cost of living crisis in New York with 30% discounts¶

Source: Al Jazeera

New York City Mayor Zohran Mamdani is selling grocery baskets at 30% below retail in five city-run stores. The policy is framed as a direct intervention against the cost-of-living crisis, and on its own terms it is a modest but concrete relief measure for households squeezed by stagnant wages and rising prices. But the real question is what kind of political logic this represents, and what it leaves untouched.

A 30% discount on a basket of goods does not challenge the price-setting power of the major grocery chains or the wholesale distributors that supply them. It creates a parallel, state-subsidised circuit of consumption for a limited number of people in a handful of locations. The underlying dynamic — that the cost of reproducing labour power in New York has risen beyond what capital is willing to pay in wages — remains. Mamdani is effectively using municipal revenue to absorb a portion of that cost, which is better than doing nothing but is not a solution to the problem.

The more interesting tension is political. Mamdani is a democratic socialist who ran on a platform of rent control, public housing expansion, and taxing the rich. A discount grocery programme is the kind of policy that can be implemented without confronting the real estate and finance interests that dominate the city’s budget. It is popular, visible, and administratively simple. The danger is that it becomes a substitute for the harder fights — over who owns the land, who controls the supply chains, and whether the city can break the monopoly power of the supermarket oligopoly. If the discount programme is the ceiling of what is possible, then the working class gets a slightly cheaper basket of food while the structural drivers of the crisis remain untouched. If it is a floor — a demonstration that the state can intervene directly to lower the cost of living, and a platform to demand more — then it is something else entirely. The next few months will show which direction Mamdani is pulled.

The Hidden Path to Regime Change in Iran¶

Source: Foreign Affairs

The argument that war and sanctions are the path to Iranian democracy has been tested to destruction. Nader Hashemi’s piece, written after the July 2026 ceasefire, draws on the evidence of the preceding months to make a case that looks counterintuitive only if one believed the official war rationales in the first place. The bombing campaign, the assassination of Khamenei, the closing of the Strait of Hormuz — none of it produced the popular uprising Trump and Netanyahu promised. Instead, the attack on a girls’ school in Minab and the destruction of civilian infrastructure generated a nationalist backlash that temporarily shored up the regime’s legitimacy. The crowds at Khamenei’s funeral, larger than expected, suggest that many Iranians who were not regime loyalists nonetheless rallied to the state against an external aggressor.

The core of Hashemi’s analysis is that the very conditions that make democratisation impossible during war — economic misery, a state on a war footing, a population focused on survival — are the ones that could make it possible after a durable peace. Remove sanctions and the threat of bombardment, and the regime’s corruption, its disconnect from the population, and its responsibility for the country’s ills become impossible to deflect onto foreign enemies. The internal preconditions for democratic change — a large urban youth population, a middle class, a coherent administrative state, civil society organisations — already exist. What has been missing is the political space for them to operate, a space that war forecloses and peace could open.

This is a direct challenge to the strategy pursued by both the Trump administration and Netanyahu’s government. It is also a reminder that the material conditions for political change are not the same as the political will to achieve it. The regime’s crisis of legitimacy is real, but it is not self-actualising. Hashemi is careful not to predict a democratic transition; he argues only that a grand bargain would set the conditions under which democratic forces have more potential to grow. That is a modest claim, but it is one that the war’s proponents cannot meet. They have already tried their method, and it failed.