By Ben Aris, Intellinews, 3/13/26
DAY 12: Things seemed to be settling down a little bit as the fog of war becomes a little thinner. As we were writing yesterday the permits-for-passage system is expanding pretty quickly. In addition to India, Tehran has granted a permit to Bangladesh and already 70% of India’s imports are bypassing the Straits of Hormuz.
Oil traffic through the streets used to be 20mn barrels a day however from our calculations it appears that 6.5mn barrels a day is getting out via the westward pipelines and Iran itself is exporting at least 1.5mn barrels a day. The supply coming out of the gulf is down heavily but at least half of the pre-war levels of exports are reaching the market.
The markets have calmed and are taking a more realistic perspective on the conflict. Despite the IEA suggestion to release the largest amount of oil additives from reserves the price of oil rose above $100 again as the IRGC target oil tankers Our top story is Iran’s Supreme Leader Mojtaba Khamenei made his first public statements yesterday – we still haven’t seen or heard from him personally as all that was issued was a written statement – that calls for domestic unity and warned of further escalation if the US and Israel do not back off.
Traders are also cutting through Trump’s bluster. The failure to open the Straits of Hormuz and the inability of the US Navy to escort tankers means that expectations that this war will be over in a month are fading fast. The forecast for $150 oil is becoming mainstream.
As I argued yesterday, I think Trump has already painted himself into a corner with the need to end this war by the end of the month. That clearly isn’t going to happen. Terrain issued a three-point list of demands on March12 which includes an American withdrawal, the payment of reparations and security guarantees that Israel will never attack Iran again. As the month wears on surely the Trump administration will become increasingly desperate as it realizes it’s wandered into a cul-de-sac and caused what is now being called the “biggest energy crisis ever.” In separate news, I also took a look at the debacle surrounding the release of the mooted €90bn EU loan to Ukraine. At the start this was hailed as a major success as it provides most of the funding Kyiv needs to continue the war for the next two years. However, thanks to the row with Hungary over oil pipelines, the money has not been released. Moreover, looks increasingly likely not to happen at all.
The EU loan was already the second line of defence after the preferred solution to confiscate Russia’s frozen $300bn of reserves failed in December.
Now it looks like this second line of defence is also going to collapse. The Nordic countries are suggesting to go to the third line which is bilateral $30bn loans.
No one wanted to use this option because it comes out of the national budget and is taxpayers money. Moreover, it only funds Ukraine through to September so the EU plan A is “cross your fingers and hope Orban loses” in the Hungarian general elections in April.
At the moment, Kyiv is living hand to mouth. The IMF just signed off on its $8.1bn a new 48-month $8.1bn Extended Fund Facility (EFF) and immediately released $1.5bn in the first tranche but Ukraine is back in the position of facing a macroeconomic collapse as soon as April if this mess is not sorted out before then.
Ukrainian President Volodymyr Zelenskiy is sounding increasingly desperate and frustrated. He’s taken to calling out his EU partners for failing to come up with the needed support. He’s done an incredible job, but Ukraine simply doesn’t have the cash to continue without help.
Russia has earned somewhere between $2bn and $6bn since the war started in excess oil revenues. That’s going to help but the energy crisis will need to go on for six months to make a real impact on the Russian budget.
The Ministry of Finance is in the process of adjusting this year’s budget and is planning for the worst. MinFin is calling for 10% spending cuts. The macro team running Russia is amongst the most prudent and conservative in the world. It has done an amazing job of keeping the economy on track despite the massive shocks and distortions. This crisis has only played to Putin’s advantage just when he needed it most. It will significantly ease the economic pressure on Russia’s economy and also starve Ukraine of essential ammunition at a time when the battle for Donbas is raging. Ukraine has practically run out of Patriot interceptor missiles and its skies are open.
Based on battlefield reports it appears that Putin has wound down the assault as the Armed Forces of Ukraine (AFU) has been retaking territory. However, given the peace negotiations are on hold for the meantime I think Putin is just taking his foot off the pedal because advances and assaults are part of his negotiating mechanisms not a military goal per se. If there are no talks then there’s no need to throw a lot of soldiers into the meat grinder. Putin doesn’t intend to take the Donbas by force. He only winds up the assaults when they’re about to sit down with the Ukrainians in some nice hotel somewhere.