Russia Matters, 3/27/26

1. “An Israeli strike on a naval outpost in the Caspian Sea targeted Russia’s support for Iran in the war, hitting a supply line that the countries have used to move ammunition, drones and other weaponry,” people familiar with the matter were quoted by WSJ on March 24 as saying. The strike, which occurred on March 18 and targeted the Iranian port of Bandar Anzali, damaged Iranian naval headquarters there, according to WSJ. The strike was Israel’s first ever on the world’s largest inland sea, which connects Russian and Iranian ports about 600 miles apart. “The most important goal of this strike was to limit Russian smuggling and show the Iranians that they don’t have sea defenses in the Caspian,” Eliezer Marum, a former commander of the Israeli Navy told WSJ regarding the strike, which was reportedly carried out by the Israeli Air Force. The route hit has become especially important for transferring Iran’s Shahed drones, which are now made in both countries, according to WSJ. Initially designed by Iran and assembled in Russia, these drones are now being modernized by Russian engineers to improve communication, navigation and targeting, and the technology behind the improvements is shared with Iran, according to WSJ. Russia denies either sharing military technology or intelligence with Iran, but these denials have not obscured reports that Iran’s Revolutionary Guard and allied Iraqi militias are now fielding first‑person‑view attack drones guided by fiber‑optic cables, copying tactics Russia pioneered in Ukraine, according to WSJ.
2. RM’s analysis of ISW data for the past four weeks (Feb. 24–March 24, 2026) indicates that Russian forces lost 4 square miles of Ukraine’s territory (area about three times the size of New York City’s Central Park) during that period. That’s in contrast to the estimated 50 square miles they gained during the previous four-week period (Jan. 27–Feb. 24, 2026), according to the latest issue of the Russia-Ukraine War Report Card. According to ISW data, this past week (March 17–24, 2026), Russia lost 4 square miles of Ukraine’s territory. It follows from daily updates posted by Ukraine’s DeepState OSINT group, that this past week saw Russian forces advance in or near 15 Ukrainian settlements while Ukrainian armed forces pushed back near one Ukrainian settlement.¹ After rare gains by the Ukrainian army along the southern Zaporizhzhia front in the south—analysts estimate that about 100 square miles were retaken in early 2026—Kyiv now faces a new Russian offensive starting in the spring in the south and in the east, according to NYT.
3. Russian forces launched nearly 1,000 drones and missiles against Ukraine in a prolonged strike series from the evening of March 23 to the evening of March 24—the “largest Russian strike series against Ukraine of the war thus far,” according to ISW. Between 6:00 p.m. March 23 and 09:00 a.m. March 24, the Russians fired 392 strike drones and 34 missiles, and from 09:00 a.m. to 6:00 p.m. March 24 another 556 drones, for a total of 982 strike assets, according to ISW. Ukraine downed 256 drones and 25 missiles overnight, and 541 of 556 drones during the day. All seven ballistic missiles hit targets near the frontline in Zaporizhzhia and Poltava oblasts, ISW reported.
4. Ukrainian President Volodymyr Zelenskyy says the Trump administration is conditioning high‑level U.S. security guarantees on Ukraine surrendering the remaining Ukrainian‑held part of Donbas—an area roughly 50 by 40 miles (2,000 square miles) in the Donetsk region, according to Reuters and New York Times.² This aligns with Russia’s demand that Kyiv withdraw from the heavily fortified zone, home to about 190,000 civilians, as one of the conditions for ending the war, NYT reported. Zelenskyy warns that ceding the area would let Russia avoid years of costly fighting that could cost it 28,000–35,000 soldiers per month and would create a staging ground for future attacks. He also told Reuters that two vital questions remained unresolved regarding security guarantees: Who would help to fund Ukraine’s weapons ​purchases to sustain its military deterrent, and how exactly would its allies respond in the face of any future Russian aggression?
5. Ukraine risks running out of money to pay for its defense against Russia within two months as a multitude of factors converge to threaten tens of billions of euros in assistance from the country’s key donors, according to Bloomberg. Kyiv currently has only enough funds to cover spending until June, according to estimates that both domestic and foreign officials shared with this news agency.
6. U.S. and Russian legislators met in Washington D.C. for talks organized by Rep. Anna Paulina Luna, a conservative Republican from Florida who has advocated rapprochement with Moscow and co‑sponsored a bill to end U.S. military aid to Ukraine. Luna said it was imperative that “the world’s two greatest nuclear superpowers” maintain “open dialogue, ideas and open lines of communication.” Russian accounts say the delegation included senior MPs Vyacheslav Nikonov and Svetlana Zhurova. Zhurova later said Ukraine was the “most prominent” topic, followed by disputes over seized Russian diplomatic properties and visas. The Kremlin said it welcomed “any efforts to revive dialogue with the United States.” Ukrainian outlet Ukrainska Pravda noted the State Department approved the visit in January, with analysts warning it risks feeding Kremlin narratives about U.S. division and “war fatigue” as formal U.S.‑mediated talks on ending Russia’s war remain frozen.³

***

How Will the US Military Invade Iran

By Jack Rasmus, Website, 3/24/26

This past weekend, Trump threatened to escalate the War with Iran by destroying that country’s energy infrastructure starting, as he said, “with the big one”. The ‘big one’ was no doubt a veiled reference to Iran’s civilian nuclear plants.

Iran’s Natanz nuclear plant had been hit with a US missile a few days earlier as a warning. As he announced his plan to destroy all of Iran’s civilian nuclear infrastructure, Trump further declared Iran had 48 hours to capitulate before the US attack. The price of oil jumped and stock market futures began to fall within 24 hours of Trump’s threat.

Before the 48 hours were up, on Monday morning, March 23, an hour before the US stock markets opened, Trump announced Iran had approached him and asked for negotiations. Therefore he, Trump, was now suspending the attack on Iran for five more days, i.e. to the end of the current week.

The five day extension had nothing to do with negotiations, which Iran announced had never taken place. Trump made it up. The five day extension was yet another move by Trump administration officials to stabilize the US stock markets and the price of oil, both of which were set to spike. Within hours of announcing his five day suspension on Monday, US oil prices (WTI) fell $10 a barrel to $90 and stock markets opened higher after a string of declines last week. 

Since the war began on February 28, Trump and various administration officials have repeatedly said publicly that negotiations were occurring, were showing progress, or even that the war was about to ‘end soon’, as Trump himself declared. 

The pattern shows such false statements were, and remain, mostly about keeping financial markets from falling too fast and to prevent oil prices from rising too fast.

But there’s another explanation for Trump’s about face and his five day suspension of the US attack on Iran’s nuclear energy infrastructure.

That’s Trump’s buying time to get US military forces into the region in order to launch a ground assault into Iran, to coincide with his plan to bomb Iran’s nuclear and civilian energy infrastructure.

Here’s some facts why the five day suspension is really about buying time for much larger US military preparation.

The mainstream US media keeps reporting that a contingent of about 2,000 US marines are en route by sea on the US landing ship, US Tripoli, coming from Asia to the Persian Gulf. If we are to believe the media, the US intends to invade Iran with just a couple battalions of Marines.

The Marines plan to land in the Strait of Hormuz area. The US will somehow seize the strait and allow oil tankers to sail through it again. The media’s is also promoting the view that a second possible landing target is Iran’s Kharg Island, where 90% of Iran’s crude oil is refined and shipped. Kharg is close to the coast of Iran, well into the Persian Gulf’s upper end and closer to Kuwait than to the Hormuz strait. The media refers to Trump’s own social media posts where he mentions Kharg Island as a good target for the Marines. Israel’s number one mouthpiece in the US Senate, Lindsey Graham, gives daily press conferences during which he refers to taking Kharg Island as well.

But it’s all a deception.

In fact, the entire 2000 Marines on the US Tripoli may be a deception.

That raises the question: Is the US actually planning an invasion of Iran; and if so where if not Kharg Island or Hormuz?

Sending 2000 Marines to seize territory around Hormuz or Kharg Island is militarily a stupendous strategic blunder in waiting should it be undertaken. It’s hard to imagine any senior US military advisor recommending that.

First, how would 2000 Marines get through the Hormuz strait and sail up the Persian Gulf to assault Kharg Island? They would be sitting ducks all the way, presuming they could even get through the strait. Furthermore, could a mere 2000 hold Kharg if they were even able to land and seize it? Marine battalions don’t carry radars and anti-missile batteries in their inventories.  They would be massively attacked by missiles and extremely difficult to re-supply.

The same applies to the other islands in the Hormuz strait, like Bander Abbas. It takes only one Iranian missile to end the Tripoli and all its 2000 on board.

The fact that US officials, according to Trump and the media, publicly mention Kharg Island and the Hormuz strait as landing targets should be an indicator there’s no intention of occupying Kharg or other Islands in the strait. The US does not discuss in public its military objectives. Therefore they are almost certainly not the targets!

There’s growing evidence, however, that when the US invasion comes—and it is coming—the landing is likely to occur elsewhere the media or Trump is not mentioning. There’s currently a massive US military build up underway, blacked out by the media, involving more than just a Marine battalion. There’s a traditional US military forces mobilization being sent to the region, more like the build up that occurred in early 2003 before the Iraq war.

Two US Airborne divisions, the 82^nd and the 101^st, have been activated and are reportedly en route to the region. So too are two US Army Ranger battalions. Another US Marine brigade has left the US for the region but will take weeks to arrive. It will likely relieve the first Marine force arriving on Friday. That’s a combined military force of 20,000.

And it’s been reported by some former US military officers that they’ve been informed two traditional US Army divisions are being prepared to go as well. That’s another 50,000. Saudi Arabia and UAE have indicated they will join the coalition for an assault. That’s now a total force of more than 75,000 ground troops! No way they are going to land on Kharg or some other island in the strait.

The US media briefly indicated last week that US forces are leaving the big US base in Baghdad, Iraq and redeploying to northern Iraq’s Kurd region, which borders on northwest Iran. The US air force is redeploying air assets to Turkey’s big Incirlik NATO air base, a mere 40 minute flight from northwest Iran.

When the Iran war first began in late February, there was much talk about the Kurdish forces in northeast Iraq entering Iran. Azerbaijan was also indicated. It is well known Azerbaijan is closely allied with Israel’s Mossad. It was a flight back after visiting Azerbaijan some months ago that the former president of Iran was mysteriously killed as both his helicopters were blown up in the air.

In Iran’s northwest there are large populations of Kurds and Azeris. But after a short reporting by the media on the possibility of getting the Kurds to invade early in the war, all the talk about an invasion by these US-Israel ‘allies’ from the northwest went silent in the media.

The northeast Kurdish region is also where US based military formations formerly in Baghdad until last week are relocating. Is this perhaps where the two US airborne divisions and two Ranger battalions might be sent—i.e. instead of Kharg Island or Hormuz? Is a general ground invasion into Iran from planned from the northwest?

Possibly. Perhaps even likely.  Why? Because it is geographically not very far from Teheran, the capital of Iran.

From Kurdish Mosul in northeast Iraq, and from Astara in Azerbaijan’s southernmost tip next to Iran, it is less than 200 miles to Teheran in both cases. The Kurds and Azeris might  seize and hold much of the northwest region of Iran where sizable ethnic populations of Kurds and Azeris live. The combined forces of Kurds, Azeris, US Rangers, US airborne could together invade.  The two full US Army divisions then might land in Incirlik or Mosul in Kurdish Iraq and cross into Iran to provide heavy armor follow up support for the invasion.

Israel will not likely take part in the coalition invasion. It is too busy invading its near neighbors: Lebanon, Syria, Palestine (west bank), and GAZA.

This is not to say for certain that Northwest region of Iran and Teheran is the actual target for a US invasion. But it makes more sense militarily than sending insufficient US Marine battalions on ships into the Hormuz strait or deep into the Persian Gulf to Kharg Island. Or using US Ranger and Airborne divisions to land either in Hormuz or Kharg. And certainly not to mobilize two full armored Army divisions.

Trump’s war objective is to destroy the current government in Iran. The US objective has always been regime change. He does not want a negotiated compromise. His talk about negotiations is therefore a deception and a lie believed by only the most naïve or who get their information from the mainstream US media. For Trump and the US empire, negotiations are just a tactic and prelude to military action. The Iranians learned that twice, once last June 2025 and on February 27, 2025. So did the Venezuelans. So have the Russians in 2015, 2022, and, I would argue, since last August at Anchorage, Alaska.

So far the Trump goal of regime change in Iran has failed: The CIA engineered popular uprising this past January-February was ill-timed, launched too early, and put down by Iran completely. Nor has limited military action by the US and Israel thus far—i.e. naval blockade, bombings, decapitation strikes, etc. Trump has therefore decided on more massive, direct military invasion.

All indications are Trump has decided to roll the military invasion dice to try to bring the war to a conclusion sooner rather than later.  He can’t afford to wait until summer. The deteriorating US and global economy won’t allow it. Nor voters in the coming November elections.

The longer Iran can continue its missile war, the greater the threat to the US and western economies. It doesn’t need to ‘win’. Just not to lose for another three months. The economic impact will take its toll by then. Trump can try to talk down the markets and spot oil prices in order to obfuscate the economic impact of the war for a relatively short time further. But he knows he must escalate, beyond traditional regime change CIA methods and/or limited military action, to a direct military ground war. Or as they say, “boots on the ground.” And it looks increasingly like that’s his plan sometime next weekend, or soon after.  

Perhaps he should remember how ‘boots on the ground’ turned out the last time the US resorted to invasion and direct military action in 2001-03 in Afghanistan and Iraq! Someone should remind him the estimated $9 trillion dollars that it cost the US taxpayer, its effect on the US economy and the paltry results produced.

Perhaps he should keep in mind US defense expenditures in 2001 were only $396 billion, US GDP that year 4.1%, and the national debt $5.6 trillion costing $350 billion a year in interest payments?

And that a US land invasion war is happening on a US defense spending of $1.1 trillion (plus another $200 billion requested by Defense Secretary Hegseth and a further $400 billion by Trump himself), a US GDP of only 0.7% last quarter, and a national debt exceeding $39 trillion and costing $1.2 trillion in interest payments! The US Empire can no longer afford costly direct military conflicts and invasions. Those days are over.

Wars are always very expensive affairs. And land invasion wars are especially expensive. The US empire could not afford its last land invasions in 2001-03 that cost $9 trillion. Today it is in a far worse condition economically to afford yet another direct military land invasion in Iran.

The US economy has already entered early stages of recession in 2026. The only forces holding it up from a deeper contraction are Net Exports (mostly falling imports due to tariffs) and an AI investment bubble that cannot continue. Employment is now contracting and Inflation is beginning to surge along multiple fronts. Stagflation is now rearing its ugly head.

But Trump thinks it will all be over quick, as his neocon advisors and Zionist campaign contributors and lobbyist have no doubt assured him. And if it isn’t quick? Well, there’s always his plan to try to overturn the upcoming November elections to save himself.

So Buckle up! It’s 2003 déjà vu. But this time the economic—and political—consequences will prove far more disruptive and difficult to manage.

By Ryan Lovelace, Racket News, 3/17/26

Fun fact: More money flowed through the prediction market Polymarket on the timing of the U.S. government’s recent attack on Iran than was bet on this year’s Super Bowl with Nevada’s sportsbooks.

Bettors traded more than $529 million in forecasts of when the U.S. would next strike Iran in a market opened last year on Polymarket, the self-described world’s largest prediction market. Bets on Polymarket are made with cryptocurrency, and each trade is countered by another user, so not exactly versus “the house.”

By contrast, $133.8 million was bet on last month’s Super Bowl across Nevada’s 186 sportsbooks, representing a 10-year low, according to data from the Nevada Gaming Control Board.

Prediction markets differ from traditional gambling in other notable ways. A pattern keeps emerging after the fog of war clears battlefields in the Middle East, Latin America, and Europe.

In the final hours before a world leader is killed, kidnapped, or claims territory, bettors swoop in and place anonymous wagers that correctly predict the future.

Hundreds of thousands to millions of dollars change hands, with winners paid in cryptocurrency that’s logged publicly, but mostly obscures the identities behind the accounts.

The world seems on the verge of chaos. And in the warrior casinos of online prediction markets, business is booming, surging past activity in Las Vegas’ physical casinos, and stealing the thunder of popular sportsbooks that have designs on taking over professional entertainment.

While not a perfect apples to apples comparison — Polymarket’s geographic boundaries are far wider than the landlocked Silver State — the prediction markets are where the instantaneous action is.

A surge in bets correctly predicting the late-February Iranian strike flooded Polymarket just before the attack. More than 150 accounts wagered at least $1,000 the day before America took action and got it right, according to a New York Times analysis of the platform’s data since June 2025.

The late swell of winning bets was unusual, according to the Times, which found at least 16 accounts made more than $100,000 after placing bets on the eve of the attack and more than 100 accounts cashed out over $10,000.

One lucky gambler spent more than $60,000 in the final moments before the attack and made almost $500,000. The anonymous account was opened in February, potentially within days of the attack.

Polymarket is far from the only prediction market offering bettors the opportunity to wager on world events. Kalshi offered odds on the ouster of Iran’s supreme leader before the recent military strikes, but later suspended trading amid his death and said on X that, “Kalshi does not offer markets that settle on death.”

Certain specialized markets have irked some working in the professional gambling industry.

John Murges, a sports betting professional who got started working with the mob in Chicago, has seen it all in the gambling underworld but did not wager he would see bets on combat in the open.

As a young man, he collected and paid out tens of thousands of dollars to Chicagoans betting on Cubs baseball and Bears football games in the 1980s and 1990s before gambling went mainstream amid legalization.

Murges emphasizes he was not a made man in the Italian mafia — he’s Greek after all — and he has put distance between his old life and his newer efforts as an experienced professional handicapper.

He said the prediction markets offering bettors contracts involving the timing of killings in Iran was “pretty morbid” and questioned whether an insider was involved. The 11th-hour bets do not sit right with him.

“I’ve been in this business a long time,” Murges said. “In the sportsbook industry, they would call that suspicious activity.”

When those who know the Chicago outfit’s work intimately think you have gone perhaps too far, that’s just a sign the prediction markets are ready to double down.

Polymarket defended its willingness to offer trades on the Iran strikes in a note saying it was harnessing “the wisdom of the crowd to create accurate, unbiased forecasts.”

The company said its prediction markets can give people answers in ways “TV news and 𝕏 could not.”

Polymarket’s position echoed a view of the promise of prediction markets from a 2006 edition of the U.S. intelligence community’s professional journal “Studies in Intelligence.” Prediction markets had the potential to “improve analytical outcomes” for the intelligence community, including policy about the Iraq War, according to author Puong Fei Yeh, then identified as a consultant.

Taking bets on strikes that could spark World War III was not an ethical red line for Polymarket, but thermonuclear war might be. Polymarket subsequently permitted a betting market on the timing of a “nuclear weapon detonation” before removing it amid pushback on social media.

Intense scrutiny and pressure is mounting worldwide on those trading information or attempting to manipulate world events for profit on the prediction markets.

Israel indicted a military reservist and a civilian last month for using secret information while placing bets on military operations last year.

Asked if it too was investigating potential insider trading on American military operations, the FBI told Racket it “neither confirms nor denies an investigation and we decline to comment further.”

Policing every individual action on the prediction markets is proving impossible. And some institutions look to prefer handling the matters internally.

The Institute for the Study of War scrubbed the name of one of its geospatial researchers from its website amid reporting suggesting the think tank’s map of disputed territory in the Russia-Ukraine conflict was erroneously edited in a way to spark a payout on Polymarket, according to the Quincy Institute’s Responsible Statecraft.

Some bettors reportedly stood to gain a major profit, as much as 33,000%, on Polymarket if Russian forces took the town Myrnohrad in Ukraine in November 2025.

The betting market relied on the D.C. think tank’s interactive map, which was quietly edited to erroneously show Russian forces advancing in the town, prompting Polymarket to resolve the bet and pay out the winnings, according to 404 Media.

ISW acknowledged an “unauthorized and unapproved edit to the interactive map of Russia’s invasion of Ukraine” in a statement on its website soon thereafter but did not explain the cause of the change nor mention the prediction market effects.

ISW did not respond to request for comment, but Responsible Statecraft said the think tank appeared to have fired an unnamed staffer.

Polymarket is looking to improve upon any reputational damage it may have suffered by partnering with Palantir, the software behemoth born from the CIA’s strategic investment fund In-Q-Tel. Last week, Polymarket announced a new partnership with Palantir and TWG AI to develop a “next-generation sports integrity platform” designed to promote trust, transparency, and reliability.

Palantir’s support of the U.S. military and intelligence community has put a target on its back from Iran, where the war looks to have boosted its stock price. Palantir does not have any hesitation about openly profiting from its enemies’ death.

“Palantir is here to disrupt and make the institutions we partner with the very best in the world and, when it’s necessary, to scare our enemies and, on occasion, kill them,” Palantir CEO Alex Karp enthusiastically told shareholders last year. “We hope you’re in favor of that, we hope you’re enjoying being a partner.”

Fortune favors those wanting to enter the prediction market arena. The sportsbook DraftKings is adjusting its plans to dominate the prediction market industry and President Trump’s Truth Social media platform is preparing its own prediction market for things such as politics, the price of oil, and sports.

Congress, however, is preparing to intervene.

Rep. Ritchie Torres, New York Democrat, introduced legislation last month seeking to prohibit federal officials from buying, selling, or exchanging market contracts tied to government policy, action, and political outcomes.

Torres said in January his Public Integrity in Financial Prediction Markets Act was motivated by a $400,000 payout collected from someone who bet roughly $30,000 on Polymarket to predict Maduro’s capture hours before America’s raid in Venezuela. The bill has attracted more than 40 cosponsors, all Democrats.

Following the prediction market payouts over the Iran strikes, Democratic Sens. Jeff Merkley of Oregon and Amy Klobuchar of Minnesota said last week they were crafting a new bill to block the president, vice president, and other officials from trading event contracts.

Merkley cited bets on Iran and Venezuela as having the “unmistakable stench of corruption” and said the End Prediction Market Corruption Act would crack down on potential insider trading. Merkley also sponsored a congressional stock trading bill last summer.

But betting big on war is not exactly a new phenomenon and the outcomes are far from guaranteed, as America’s enemies found out the hard way 250 years ago.

Over drinks at Brooke’s in London on Christmas Day, 1776, legend has it British Gen. John Burgoyne bet a colleague 50 guineas he would return by the following Christmas having squashed the American patriots’ rebellion.

Instead, Burgoyne became a loser carrying the “stench of failure” upon surrendering his army after the Battles of Saratoga, which the U.S. Department of War has branded the “turning point” in the American Revolutionary War.

The tyrannical redcoats learned a lesson some Americans now wish to maintain: the house always wins except in the warriors’ casino, where Uncle Sam does.

Disclosure: Polymarket has partnered with Substack, providing new tools tailored for writers and publishers. While Racket News accepted the partnership, it declined the money in accordance with our mission that we accept zero dollars in outside financing.

Intellinews, 3/17/26

Ukrainians are getting tired of the war. In a change of heart, a majority would now support a peace agreement involving territorial concessions if presented alongside clear incentives such as European Union membership and security guarantees, according to new Kyiv International Institute of Sociology (KIIS) polling data.

Previously, polls found that while support for a ceasefire deal was growing, the majority of Ukrainians would not accept that if it included ceding land not currently occupied by Russia as part of any agreement.

KIIS found that 61% of Ukrainians would vote in favour of a deal that gives up all of the Donbas – the central Kremlin demand – in a referendum if the question were framed positively. Among those who said they were likely to participate in a vote, support rose significantly to 86%, with only 10% opposed.

The public backing for a negotiated settlement with Russia now hinges less on the substance of the agreement itself and more on the political and strategic framing of a potential agreement.

While public support for a compromise deal is rising, the talks themselves are now on hold again, as the US, the central mediator, has become distracted with the conflict in Iran. As bne IntelliNews reported, US President Donald Trump is losing his patience with Ukraine after Ukrainian President Volodymyr Zelenskiy called for the US to tighten sanctions on Russia again, just as the White House eased them to supply India with oil, and criticised Operation Epic Fury. Trump is frustrated with Zelenskiy intransigence on the issue of conceding the Donbas to Russian President Vladimir Putin, which has left the talks in deadlock.

The KIIS poll increases the pressure on Zelenskiy to make a deal and give more away to Russia. The respondents were more inclined to support territorial compromises when these were explicitly linked to tangible outcomes, including prospective European Union membership by 2027, firm security guarantees, and a defined reconstruction programme.

“Depending on wording, Ukrainians planning to vote in a potential referendum would support a peace deal with ‘territorial compromises’,” the polling organisation said, pointing to the sensitivity of public opinion to how proposals are communicated.

Zelenskiy is increasingly finding himself boxed into an impossible position. He welcomed Trump’s suggestion to accelerate Ukraine’s EU accession bid and join in 2027, part of the 27-point peace plan (27PPP) thrashed out in Moscow in December. However, the EU itself has rejected that plan and is insisting on its decade-long vetting process. At the same time, the White House has yet to sign off on the US security deal that was also included in the 27PPP, a key element of Bankova’s prerequisites for conceding land.

Zelenskiy is now facing a growing domestic political crisis as he starts to lose authority with his own Servant of the People (SOTP) party at home, and a funding crisis after the fiasco surrounding the EU’s failure to release the €90bn EU loan agreed in December. If the funding issue is not resolved then Ukraine faces a macroeconomic collapse sometime in the spring. Zelenskiy’s personal popularity has also been falling steadily, albeit slowly.

The poll underscores the challenge facing Ukrainian policymakers as they cope with the growing war fatigue. KIIS stressed that both legitimacy and question design would be decisive in any referendum process, necessary before Ukraine can cede land to Russia. “Legitimacy & question wording matter hugely,” the organisation said.

Strana.UA, 3/12/26

Translation into English by Prof. Geoffrey Roberts

In the past week, Ukrainian and Russian media and Telegram channels have been full of predictions about the Russian army’s upcoming “spring-summer offensive,” as well as analyses of possible actions by Ukraine’s armed forces.

President Vladimir Zelensky has announced that Russia is preparing a spring offensive, while Alexander Komarenko, the UAF’s Chief of the Main Operations Directorate of the General Staff, has promised to undertake something “the enemy won’t expect” in this year’s military campaign.

Possible directions for Russia’s “main blow” are also being discussed. The Donetsk region is usually cited as such.

At the same time, we have repeatedly written that concepts of “direction of the main blow” and “spring/summer/fall-winter offensive” are inappropriate for the current war.

Drone control over the battlefield, which is total, prevents any surprise strikes with large forces in one direction at a specific, pre-planned time.

Both combatants conduct their offensive operations in a similar manner: constant attacks with small groups of infantry infiltrating the front line while simultaneously attempting to “knock out” enemy UAV pilots (this is currently the primary objective) in order to create breaches in the “kill zone” for further advancement and consolidation.

That is, a constant identification of weak points in defences and attempts to break through as soon as they are discovered. Of the systemic factors that can contribute to the success of this tactic, the only one worth noting is the “hunt” for drone operators. The remaining factors are more or less random — errors by the enemy command, which may “sleep through” the attack and fail to deploy reserves in time, and, crucially, weather conditions.

Fog, for example, allows infantry to penetrate the front line without fear of drones. This is why the Russians made significant advances during the foggy months of October-November-December of last year, when they almost completely captured Pokrovsk, Myrnograd, and Gulyaipole.

Foliage also aids the attackers. While previously, the green cover favoured the defenders, who could easily hide in it, in the era of drone dominance, foliage helps assault groups advance relatively undetected. As recent experience shows, offensive operations do intensify in the spring, and this is likely to happen again.

However, over the past year, drone density has increased even further, meaning any offensive is slow and associated with very heavy losses. This applies to attacks by both the Russian and Ukrainian armies. The only difference is that the Russian army has greater manpower reserves (as well as greater capability to deliver fire damage to identified drone operator locations) and can, albeit with heavy losses, maintain a steady advance on many sections of the front (although this has slowed recently due to the aforementioned factors). Ukrainian counterattacks, due to a shortage of manpower and the more heavily manned Russian defensive lines, are merely localised and deterrent in nature – as happened early last year near Pokrovsk or early this year at the junction of the Dnepropetrovsk and Zaporozhe regions. Over time, these attacks stall and fail to achieve deep penetrations. Even Kupyansk, where the Russian positions were initially very vulnerable, has not yet been fully liberated, and fighting continues there (as confirmed by Ukrainian sources). Though some UAF counterattacks have had a significant impact on the situation on the front; for example, the cutting off of the Dobropol’e salient last year.

But overall, the fighting continues to be waged in a “war of attrition,” where the primary objective is not to plan large-scale offensives in the spirit of World War II, but to exhaust the enemy’s human, moral, and economic resources with the tactic of “a thousand small cuts,” so that at some point, quantity turns into quality and the enemy’s front (or rear) collapses.

This course of events can only change if one side gains a significant military-technical advantage (primarily in the use of robotic systems), which is not yet the case. Any innovation is quickly adopted, and parity is restored.

Nevertheless, as we see, everyone is now once again talking about a Russian offensive, or an offensive by the UAF.

Therefore, let’s consider what the realistic actions of the Russian and Ukrainian Armed Forces may be during the spring-summer campaign.

1. Russian Army Plans for 2026: Zaporozhe, the Border, and a pincer movement in Donbas

Although the Russians’ primary tactic is constant pressure along the entire front to probe for weak points, there are certainly priority areas where reserves and resources are being directed.

The Donetsk region is constantly cited as a priority for Moscow, but we have repeatedly written that concentrating efforts there from a purely military perspective is pointless for the Russians. Even the loss of Slavyansk and Kramatorsk would not create strategic problems for the Ukrainian Armed Forces, in terms of cutting off logistics routes or making key cities vulnerable. Further down the line, the Russians would run into the Barvenkovo fortified area and other defensive lines.

The higher priority areas for the Russian Federation are obvious, and they are quite different (Kiev, as one of them, is currently being left out, as there are no signs of preparations for a ground attack on it, unless Belarus enters the war, which is also still hypothetical).

The first area is Zaporozhe and Dnipro, two key industrial centres of Ukraine. These are also the logistics centers of the UAF. Even approaching their outskirts by Russian troops (without completely capturing them) paralyses life there, which would be a painful blow to the country’s entire defence system. And capturing these cities and establishing a bridgehead on the right bank of the Dnieper creates a threat of a Russian offensive toward Krivoi Rog and Transnistria. Furthermore, the northward movement of the front line in this area makes logistics along the land corridor to Crimea more secure for Russia and complicates Ukrainian attacks on the peninsula itself (especially on the Crimean Bridge). If we analyse the directions of Russian offensives since 2024, it is here that they have made their greatest advance, moving westward from Donetsk, Kurakhovo, Ugledar, and Velikaya Novoselka, outflanking the well-fortified defense lines of the UAF on the Southern Front from the north.

The second most important area is the border region between Ukraine and Russia. It is important for Moscow both in terms of creating a buffer zone to normalise life in the Bryansk, Kursk, and Belgorod regions, and in terms of facilitating attacks on UAF logistics between the Eastern Front and the rear areas in Central Ukraine. Recently, Russian activity here has increased, with advances in the Sumy region. Last August, Zelensky promised that all Russian footholds in this region would be eliminated “within a few months.”

The third area is Khar’kov. – another major industrial centre, to the south of which are also located Ukraine’s main gas fields. As with Zaporozhe and Dnipro, even the approach of Russian troops to the outskirts of the city paralyses life and economic activity there, given that Russia now has a much larger arsenal of firepower (drones, KABs) than it had in 2022, when the Russian army was already at the former capital. However, Khar’kov differs from Zaporozhe and Dnipro in that a well-thought-out and layered defense has been built to its north in recent years. Meanwhile, in the Zaporozhe Oblast (if we take the direction of Russia’s advance from the east), the situation is very loose, with no serious fortifications in place. It will be difficult for the Russians to break through to Khar’kov, despite the relatively short distance, but attempts will certainly be made, especially if Russia succeeds in advancing in other areas of the border region and gaining fire control of the roads from Khar’kov to the west.

The fourth most important direction is the Donetsk Oblast. The main threat here for the Ukrainian Armed Forces is not a frontal Russian advance from the east toward Slavyansk and Kramatorsk, but rather the creation of a “pincer” by the Russians if they manage to advance in the area of ​​Svyatogorsk and Liman on one side, and capture Dobropol’e on the other and advance north. After this, the large UAF group in Kramatorsk, Slavyansk, Druzhkovka, and Konstantinovka would find itself encircled, with all roads under drone fire. The Ukrainian army would then either be forced to retreat from these cities or suffer heavy losses trying to hold them under unfavourable conditions (as occurred in the final months of the UAF’s Kursk bridgehead). Seemingly, the Ukrainian command understands this, which is why it made every effort last year to cut off the Dobropol’e salient. However, the Russians are now attacking in this direction again.

Another important section of the front lies west of Pokrovsk. An advance here will enable Russia to prepare a broad-front offensive against the Dnipropetrovsk region.

The fifth axis is the frontline section near Oskol, including Kupyansk. It is the least important of all. Essentially, it serves as a subsidiary to the other two Russian axes of action: the second (the buffer zone along the border) and the fourth (the offensive in the northern Donetsk region).

2. UAF Strategy for 2026: Donbas, Counterattacks, and the Iranian “Wild Card”

UAF strategy largely stems from the fundamental threats described above.

That is, to prevent Russia from advancing toward Zaporozhe and Dnipro, to prevent Russian forces from advancing into the borderlands and Khar’kov (and to attempt to enter Russian territory themselves), and to prevent the creation of “pincers” in Donbas. In fact, the UAF’s main activity over the past six months has been in these areas (plus Kupyansk, which, admittedly, is more of informational and political significance).

Hence we should expect a further concentration of efforts in these areas.

However, UAF command has already made it clear that it does not intend to limit itself to defence.

“If we don’t have the initiative and instead simply fight back, sooner or later we’ll be finished off. Therefore, we’re planning different actions that will force the enemy to change their plans and act in ways they didn’t plan. And these won’t necessarily involve direct troop actions; we’re also planning asymmetrical actions. Something they won’t expect,” stated the aforementioned Komarenko.

He didn’t specify what these actions would be, but based on past experience it’s clear that Kiev is combining two approaches.

The first is strikes against Russia. These include attacks on industrial enterprises and infrastructure facilities, as well as strikes in the style of Operation “Spiderweb”: bold and daring actions deep in the Russian rear. In addition to inflicting direct damage on Russia, these are intended to bolster morale among the Ukrainian population.

The second is counterattacks at the front. While they don’t result in major advances, they also help maintain morale and slow down Russian offensive actions. But Ukrainian experts have criticized these constant counterattacks, which achieve only limited success and are associated with significant personnel losses (with drones dominating the skies, casualties during assault operations are many times higher than during defensive operations). Critics believe that such tactics lead to the UAF’s weakening and undermine Ukraine’s chances of surviving a war of attrition.

However, the formula currently promoted by Ukraine’s military-political leadership—”we are not just sitting on the defensive, but liberating territory and seizing the initiative”—has been integrated into Kiev’s overall strategy for this year.

Ukrainian authorities assumed that Russia’s growing financial and economic problems would deplete its resources, necessitating belt-tightening among the population, leading to widespread discontent and, possibly, destabilisation within Russia. Under these circumstances, the Kremlin would be forced to make significant concessions regarding the terms of ending the war or even find itself on the brink of defeat due to destabilisation of the rear.

Constant counterattacks by Ukraine’s armed forces, which, at the very least, slow Russia’s advance and even allow it to liberate some territory, fit seamlessly into this strategy, as they are intended to demonstrate to the Kremlin and Russian society the futility of continuing the war.

However, even in Ukraine, not everyone is ready to validate this strategy and its predictions of “Russia’s imminent collapse”.

Indeed, after the start of the war in Iran and the rise in oil prices (plus the predicted problems with Western arms supplies due to the United States’ own increased needs), the strategy finds itself on the brink of collapse.

True, Kiev is hoping for a quick end to the Gulf War, after which, Bankova calculates, everything will quickly return to normal. But if the war drags on, that strategy will have to be completely altered. Either toward compromise with Russia (including on Donbas) on peace terms that would allow for a ceasefire in the near future. Or toward maximum belt-tightening for the population and the militarisation of the entire country, prepared to wage a protracted war of attrition in worsening conditions. This, among other things, implies limiting personnel losses, and thus a change in tactics on the front lines.

By Jack Rasmus, Website, 3/19/26

Jack Rasmus is author of the recently published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, 2020 and the forthcoming 2026 book, ‘Twilight of American Imperialism’ also by Clarity Press. He publishes at Predicting the Global Economic Crisis at http://jackrasmus.com and hosts the weekly radio show, Alternative Visions, on the Progressive Radio Network every Friday at 2pm eastern time.

As the US-Israel war on Iran enters its third week, the outlines of the economic consequences and fallout of the war have begun to emerge. As the war continues—and by most indicators it appears it will for months longer—the War’s negative impact on the US and world economies will deepen further.

What are some of the economic dimensions for the War’s negative consequences?

First and most obvious is the current oil price shock’s effect on inflation. Not for just US prices but other countries as well. And not just for goods and services but for asset prices (i.e. stocks, bonds, forex, derivatives, gold, silver, etc.).

Another is the long term disruption of global supply chains and the volume of global trade.

As inflation rises, central banks, led by the US Federal Reserve, will continue to raise interest rates with a corresponding negative impact on the US and other economies, many of which are already nearly stagnant or are beginning to enter recession. Most heavily impacted will be Europe, the Gulf States, and middle east energy dependent countries in east Asia like Japan and South Korea.

Another negative impact will be on global money capital flows—both real investment and financial portfolio asset markets (stocks, bonds, forex, derivatives, etc.).

Then there’s the US budget deficit and national debt. The deficit will now approach $2 trillion a year, for the third straight year. That deficit will drive the national debt to exceed $39 trillion by later this spring and possibly $40 trillion by year end.

The Iran war and its costs converge with a host of other forces driving the deficit and the debt into ever greater crisis: Trump’s escalating war spending (including his plan for $400 billion more for just the Pentagon), the current sharply slowing US real economy (that grew at a mere 0.7% rate in fourth quarter 2025), the present collapse of employment and job creation now underway in the US and Trump’s massive 2025 $5 trillion tax cuts benefiting mostly investors and corporations at the expense of US Treasury tax revenues which is estimated to reduce corporate income tax revenues by $77 billion in 2026.

Not least, the war will accelerate the current fiscal crisis of the American Empire. The costs of Empire now exceed $2.2 trillion a year when all categories of ‘defense’ in the US budget are considered, not just the Pentagon and the US Department of Defense—the latter alone which now exceeds $1.1 trillion a year.

Trump’s war in Iran will exacerbate all these negative economic trends, US and global; and the longer the war continues—which by all indicators it will—the worse the negative economic consequences.

Putting some numbers and facts around the above trends, the picture now beginning to appear in terms of economic consequences of the Iran war is as follows:

Oil Price Shock

Throughout 2025 the price of global crude oil remained at around $60 a barrel. It began to rise in late January 2026 and hit $71 just before the war began Saturday, February 28. Prices initially spiked to $118 the following Monday, March 2, but then settled down below $100 the rest of the first week. On March 9 they were still $98. At the start of the second week Trump tried to talk down the price by saying the war was “over soon”. 

His Energy Secretary then posted on the department’s website that US warships had begun escorting tankers through the Hormuz strait. Oil prices quickly fell to $87. But when the facts revealed the war was not about to end in a week, and that there were no escorts, the Energy Secretary quickly took down the fake claim from the department’s website and oil prices rose again. 

By Thursday, March 12 they were $101. On March 15, $104. On Monday, March 16 the price of benchmark Brent crude oil hit $106. The price of crude oil will fluctuate day to day with events in the war in the short run but steadily rise over time.

At the retail gasoline level in the US, the Trump administration has continued to under report the price of gasoline at the pump, after two weeks of war claiming it has risen only 15 cents a gallon. In fact, the average was closer to 70 cents, according to other official estimates, and in regions like California more than $1.50/gallon.

Strategic Petroleum Reserve Failure

Trump’s major policy response to address the crude oil supply shock during has been to announce the release of 172 million barrels from the US Strategic Petroleum Reserve (SPR). After Biden’s SPR release in 2022, the reserve was never restored. Before Trump’s recent announcement, the SPR held only 412 million barrels or about 60% of its total capacity. 

That’s to be reduced now by another 172 million barrels. Europe, Japan and other countries have also announced inventory releases, for a global total of around 400 million barrels of extra crude supply for the global market. But neither the 172 or 400 million barrels will have much effect on global and US prices. Here’s why:

The shutdown of the Hormuz strait results in a 20.3 million barrels a day reduction in total global oil supply, which is about 30% of all seaborn crude oil.

At 20.3 million barrels a day, 400 million additional barrels from the US SPR and global reserves provides for roughly 20 days additional supply to offset the closure of the straits. But 20 days assumes that 20 million barrels from the SPR and other inventories are released to the market immediately on day one. That cannot occur. There’s a ‘flow rate’ limit of release from the SPR which is no more than 2 million barrels a day. That means it will take 200 days—not 20—for the SPR and other sources to reach global oil markets. 

So global supply is still reduced by 18 million barrels a day due to the Hormuz closure. The SPR release will hardly dent the supply effect of the Hormuz closure and so little to dampen rising global crude prices in coming weeks. Nor will it effect much the price of US gasoline at the pump which will also keep rising—as Biden discovered when he released SPR oil back in 2022.

And there’s countervailing forces why gasoline at the US retail level will continue to rise. Whenever there’s a jump in crude oil supply—due to SPR release or other causes—US oil companies simply reduce their output accordingly and/or US drilling companies take a number of their drilling rigs temporarily offline. The result is not a net increase in supply of gasoline even if there’s an excess of crude oil supply from the SPR.

Moreover, US oil companies control the retail price of gasoline at the pump by manipulating refinery output—not by changes in crude supply. They have purposely not built a new refinery in the US in 50 years! As a result, they can turn off the supply spigot at the pump whenever they want by simply reducing refinery output regardless of crude supply changes. That typically occurs after announcing refinery shutdowns for maintenance, repairs, fires or other such excuses. So forget the politicians’ and media talk about the global price of crude. Oil companies control gasoline prices by controlling the bottleneck of oil refinery operations.

As the war drags on—likely now for weeks if not months—the global price of crude may spike much higher than the current $100 a barrel. The Goldman Sachs bank has forecast the price can potentially rise to $200 a barrel, or more. Not coincidentally, the Iran government has indicated its target is to push the price to $200.

Global Supply Chain Disruption

The closing of the straits is not only disrupting global crude oil supply but other commodities supply as well. 20% of the world’s natural gas supply also ships through the Hormuz strait. A significant supply of fertilizer, petrochemicals, plastic packaging, and some metals also pass through the strait. Their supply will be disrupted as well, with various price impacts. The supply of fertilizer may especially have an impact on crop production and food prices in emerging markets in Asia and Africa.

There’s also the matter of the disruption of the supply of shipping containers. A significant supply of containers are locked up now in the Persian Gulf. That will have repercussions on the availability of shipping containers world wide, creating shortages in places and raising container prices.

US Dollar and Gold

The Iran war and rising oil prices will have a significant impact on the value of the US dollar and in turn on the price of Gold. The war and its effects comes on the wake of the bubble in Gold prices in 2025 which rose from $1900 an ounce to more than $5000 throughout the year. Conversely, 2025 witnessed a 10% devaluation (price decline) of the US dollar. Both assets, the dollar and gold, have surged as the War erupted, as investors seek safety havens. The Gold price surge will now continue. The US dollar recovery will not.

The dollar will resume its decline eventually as Demand for dollars to buy oil declines as 20% of the global supply of oil is taken offline. Investors will shift asset investing more to Gold, continuing to drive up its price. In turn rising gold price will further depress the value of the US dollar. Thus, longer term, the dollar will devalue further by year end while gold will rise further.

To try to accelerate the dollar’s decline, Iran has announced policies to hasten decline in its Demand and thus the value of the dollar. It has announced it will allow tankers to pass through the strait of Hormuz so long as they carry oil that is bought and sold with the Chinese Yuan.

US Inflation

Economists’ estimates are that the US consumer price level will rise by 1.3% points should the price of crude oil remain around $100/ barrel. The US CPI has hovered in the 2.5%-2.9% range. That means the CPI rises to more than 4.0%. But that’s not the full impact of inflation on the consumer. 

The CPI (or its cousin US price index the PCE) does not include interest rates which have already begun to spike, impacting auto loans, mortgages, and credit cards. Nor does it fully reflect prices in other categories of purchases that impact consumer budgets. The 1.3% estimate is for the direct cost on energy expenditures, primarily regular gasoline (note most US car owners buy premium but the media likes to quote regular). 

The CPI won’t fully reflect the coming rise in utilities (gas and electric), transport (airlines, trucking, railroad), and food prices as fertilizer and plastic packaging costs rise with global crude prices. Nor does the estimated 1.3% account for consumers’ inflationary expectations almost certainly to rise as well in coming months.

Financial Asset Price Volatility

Effects on the US dollar and gold have already been noted. But what about other financial assets like stocks, bonds, derivatives, forex, etc.? The disruption of trade, energy, and money capital flows will likely mean a shift by investors out of certain stocks and bonds and a rise in the cost of derivatives insurance.

More instability in US stock and bond markets is already appearing, and it comes on the wake of a significant correction in February in US financial markets. The S&P 500 and Nasdaq markets have contracted 5-7% since February. The economic uncertainty unleashed by the War will dampen financial asset investment further.

And what about that sector that had driven almost all of stock price appreciation in 2025—i.e. the tech and AI boom? What will be the impact of $100 or more oil prices on energy costs on the huge investments now underway in Artificial Intelligence, most of which is targeted for the energy hungry AI data centers being built out at present? The AI bubble was already showing signs of contraction before the war. Will sustained surging energy prices lead to further AI stock related instability?

While some asset prices will accelerate further due to the War, others may deflate due to the same. That includes certain stocks and bonds as interest rates rise, emerging market currencies, and of course the dollar.

Interest Rates

Another direct consequence of the War is the rise of interest rates in the US. Already 10 and 30 year Treasury bonds have begun to rise since the start of the war two weeks ago. They will rise further.

The US Federal Reserve will now be even more reluctant to reduce US short term rates at its next and subsequent meetings, out of concern for rising inflation on the horizon. The Fed cut rates three times last year. Trump opened a war on the Fed to force it to reduce rates again further and faster. He needs big cuts in order to have an effect on a US real economy that is weakening fast. 

He needs lower rates at least six months before the US November 2026 elections. He’s running out of time. Trump just lost a major court case in which he tried to legally force Fed chair, Powell, out of office. Given the inflationary pressures generated by the War, the Fed is now less likely to bow to Trump’s pressure and reduce rates. And the longer the war, the less likely the Fed will reduce rates.

US Real Economy

The US real economy enters the War on particularly shaky ground. As previously noted, real US GDP for fourth quarter 2025 was a mere 0.7% and for all of 2025 barely 2%. US job growth for all of 2025 was only 181,000 when 1.2m are needed just to absorb new entrants to the labor force. February’s latest job numbers showed, moreover, a contraction of 92,000 jobs. The US employment sector is already in recession.

Consumer spending has recently also slowed down. That’s 2/3s of US GDP. And the Net exports category of GDP will again now worsen due to global trade disruptions. That leaves business investment even more dependent on the AI bubble, as US government spending continues to cut social program spending to make way for more war spending.

In short, the war may well push the US economy into a condition of Stagflation—i.e. rising prices amidst declining jobs and slowing GDP.

One should not forget the role that oil price spikes can play in economic recessions. Economists generally overlook the role spiking oil prices played in the 2008-09 great recession. It was in the spring-summer 2008 that global crude oil prices shot up to $147 a barrel—a record level which helped precipitate the great recession that year. The financial crash of 2008 played a major role in causing the recession but the oil price explosion that occurred in parallel with the financial crash contributed as well. One should therefore not overlook the potential of price shocks in precipitating recessions—whether 2026 or 2008.

Europe, Russia, Asia and Emerging Economies

Europe economies are in an even worse condition than the US. Already battered by energy costs of US LNG gas and oil six times higher than former Russian natural gas, Europe’s economies have been hovering around stagnation or mild recession, according to official statistics. Europe political elites have exacerbated the conditions by continuing to divert critical money capital for investment in their own economies to Ukraine instead. Now the Iranian war effects will exacerbate energy cost inflation and slow growth in Europe even further.

Europe gets much of its oil and most of its natural gas from the Gulf states. With that blocked, it will have to buy more from the US—at likely even higher prices. The rising cost of energy may well push the major economies of Europe—Germany, France, UK—over the recession cliff.

The Gulf states economies are in even worse state than Europe’s. Their main money engine of oil and gas is virtually shut down or damaged. It will take months, perhaps years, to restart production and repair damages. Their economies are clearly already contracting sharply.

Asian countries like South Korea and Japan are heavily dependent on middle east oil and gas. Japan had created a significant stored reserve. But South Korea had not. That country will almost certainly have to start rationing energy use soon.

Then there are those emerging economies that are heavily dependent on the dollar, having ‘dollarized’ their economies. As interest rates rise, the price of the bonds they have issued or hold will decline sharply. Their currencies will decline and their reserves for purchasing critical imports will dry up. Some will have to borrow more again from the IMF. Others, cut social spending. They will import less food due to rising prices and their falling currencies. Serious food shortages may occur in these dollarized emerging market economies.

In contrast, Russia is a big winner economically from the Iran war. The surge in the price of crude from $60 to more than $100 a barrel is estimated to result in $150 million a day in additional revenue for Russia.

China benefits as well. While China imports a significant amount of its total oil imports from Iran, it is thus far not significantly impacted. Iran has reported it continues to export a significant volume of its oil to China. China has developed alternative global sources for its oil imports and has amassed a reserve of oil that reportedly can last five months. In addition, it can always import more from Russia. Its net assets will rise appreciably with the rising price of gold, which it has been acquiring and storing for years.

Finally, as the war in Iran drags on, there will be a further drift from the use of the dollar to purchase oil and toward alternative currency arrangements now being prepared by the BRICS. The war and its economic dislocations will benefit the BRICS at the expense of the US dollar.

Exodus from the Gulf States

Reports abound of the growing exodus of investors and wealthy local populations from the Gulf states as the war intensifies and Iran continues to bomb their infrastructure and US military bases, from the UAE in the south of the Gulf to Kuwait in the north. As the wealthier population leaves, they take their wealth with them. 

That means investment projects throughout the region are on hold or even being cancelled. In addition, Western money capital is not entering the region now, and Gulf investors are moving their capital from the region and investing it mostly in Gold and other metals elsewhere. The entire economies of the region are being severely disrupted, in other words, not just the flow of crude oil and natural gas.

US Costs of Empire

A generally overlooked consequence of the Iran war is the effect it will have on an already out of control US defense spending and related costs required to maintain the US empire today in general.

The US mainstream media and politicians like the public to think that Pentagon spending represents the total costs of defense in the US budget. That Pentagon will exceed $1 trillion in 2026. But that’s not all the US defense department spends. Its total expenditure is now $1.2 trillion. 

And that doesn’t include other obvious ‘defense’ or ‘war’ expenditures like funding the CIA and intelligence agencies, costs of past wars in veterans benefits, development of nuclear weapons in the Energy Department budget, military aid and assistance to allies, Homeland Security escalating costs, costs for secret new weapons development not indicated in the US budget, and interest payments on the national debt due to defense/war spending’s share of deficits and national debt interest payments.

Nor does the US budget$1.1 trillion authorization for the Pentagon and Defense Dept. include Trump’s 2026 current spending on what’s called ‘Overseas Contingency Operations’ for direct war actions in Venezuela and now Iran. It is estimated the US has been spending $2 billion a day on the war in Iran. 

And that probably doesn’t include weapons replacement costs. Deploying three aircraft carrier tasks forces is not cheap. Committing one third of US aircraft to the region isn’t either. Nor repairing eventually the damage to the US dozen plus bases in the Gulf and aid for the Gulf states to replace their destroyed air defense systems, the radars of which alone cost $1 billion each.

In short the tab for the Iran war after 20 days is at least $50 billion in OCO. And if Trump sends in the Marines and tries to have the US navy escort ships through the Hormuz straits that tab will rise by tens of billions $US more. Given the anticipated direct costs of the Iran war, the Pentagon on March 19 requested Congress authorize $200 billion in OCO additional spending.

In addition to all that, Trump is calling for an increase of another $400 billion for the Pentagon in the next budget as he obviously plans for more wars.

Conclusions

The longer the war the greater the costs to the US across multiple dimensions. Moreover, the longer the war the more likely Iran will ‘win’.

Iran is approaching the war strategically, while the US is doing so tactically. Trump thinks bombing Iran’s infrastructure will force Iranian capitulation. Iran believes if it an keep the Hormuz straight shut long enough it can create enough damage to the US and western economies that Trump will have to ‘declare victory’ regardless of the facts and discontinue the conflict.

Trump started the war in expectation he could repeat the outcome of Venezuela. His US deep state neocons, US oligarch Zionist campaign contributors, and his friend Netanyahu no doubt convinced him that was possible—even as senior US military advisors forewarned him it wasn’t.

So now he has a wildcat in a bag and he can’t decide whether to let the cat out or drop the bag and run.

Meanwhile, the US and world economies steadily deteriorate and the November 2026 US elections grow closer and with it potential political disaster for his war plans—unless of course his plan to somehow overturn or negate the elections prove successful.