War in the Gulf, Shock in the Oil Market
Military incidents from Iraq to Turkey & Iran’s effort to close the Strait of Hormuz are shaking energy markets - prompting Washington to allow Russian oil shipments already at sea to reach buyers
🔥 World Briefing Hot Take
Washington’s decision to temporarily lift sanctions on Russian oil already at sea is a deeply regressive move that risks rewarding aggression at the very moment the Kremlin should be under maximum pressure. Framed as a short-term step to stabilize oil markets as prices surge past $100 a barrel amid Middle East turmoil, the 30-day waiver allows millions of barrels of previously sanctioned Russian crude to reach global buyers.
In reality, the signal it sends is unmistakable: the West is willing to ease pressure on Moscow when markets get jittery. That plays directly into Vladimir Putin’s strategy - leveraging energy shocks to fracture Western unity while keeping the revenues flowing that sustain Russia’s war machine and hybrid operations across Europe. Expect corks popping in the Kremlin. And unless Europe pushes back diplomatically, this “temporary” measure risks becoming the thin edge of a much larger rollback of sanctions.
News briefs
Four of six crew aboard a US military refuelling aircraft have died after it crashed in Iraq, US Central Command (Centcom) says. Rescue efforts continue after the loss of the KC-135, it said, having earlier said neither hostile nor friendly fire were involved in the downing of the aircraft. The tanker had been involved in ongoing US operations against Iran, and was one of two aircraft involved in the incident, the military command unit said. The second landed safely, it added. The Boeing-manufactured aircraft are capable of refuelling planes midair and typically play a major role in US military operations. They were used extensively in the first Gulf War to extend the range of fighter jets and bombers. The KC-135 usually has a crew of at least a pilot, a co-pilot and a boom operator responsible for operating the refuelling arm of the aircraft. Centcom described the crash as happening over friendly airspace, but this is a region of Iraq where pro-Iranian militias operate. Iran’s military claimed on state TV that an allied group had targeted the plane with a missile. Since the outbreak of the US-Israel war with Iran, seven US soldiers have been confirmed as having been killed in the conflict. The US military has now lost at least four aircraft during the current war - BBC
Separately, French President Emmanuel Macron said one soldier was killed during a drone attack in the Irbil region of Iraqi Kurdistan. Meanwhile, as the war entered its second week, Iran continued to strike back at US Arab allies in the Gulf region and attack commercial ships transiting the crucial Strait of Hormuz. Supreme Leader Mojtaba Khamenei, in his first public comments since being named to succeed his late father, said Iran must continue to keep the key Gulf shipping lane closed, hours after several vessels were targeted in strikes as Tehran looks to choke off oil supplies from leaving the Middle East. In the statement, which was read out on Iranian state TV by a female presenter on March 12, Khamenei said Iran will continue to seek to strike targets where “the enemy has little experience and will be severely vulnerable.” Iran’s Islamic Revolutionary Guard Corps (IRGC) said the hard-line military force intends to keep the Strait of Hormuz closed to traffic, saying it was following instructions from the new supreme leader. The United States has suggested it is prepared to escort ships through the strait, a move that would likely increase tensions in the region - RFE/RL
Turkish state media reported on March 13 that sirens were heard at the Incirlik Air Base, a NATO facility in southern Turkey that houses US forces. No further information was immediately available. If an Iranian missile attack is confirmed, it would be the third time since the war began that the Turkish airspace has been violated.
The ramifications of the war are proving to be disastrous on airlines located in the Gulf region. Local reports within the GCC countries estimated up to 30,000 flight cancellations in the first week of the war. These have caused massive disruptions, spilling beyond the region. While the costs vary, executives who spoke to CNA off-the-record reckoned that the GCC carriers can expect daily losses of about US$2 billion. These are largely due to flight cancellations, airspace closures, higher costs due to longer routes and higher war-risk insurance premiums, refunds, and severe hub disruptions. Prices for jet fuel have also risen. Jet fuel typically accounts for 30 per cent to 40 per cent of an airline’s operational costs, and is denominated in US dollars. Airlines whose revenues are in currencies that are weaker than the greenback will suffer the most on their bottom lines. It is a given that airlines will impose fuel surcharges on passengers soon. Already, a handful of airlines have announced airfare hikes.
Moscow said Friday that the global energy market “cannot remain stable” without its oil, piling pressure on Washington to lift more sanctions as the Middle East war strangles supplies. The United States has eased some oil sanctions on Russia imposed over its invasion of Ukraine, prompting backlash from Western allies who urged Washington to keep up restrictions as the Ukraine conflict drags into its fifth year. The U.S.-Israel strikes on Iran and Tehran’s retaliatory attacks across the Gulf region have upended the world’s energy and transport sectors, virtually halting activity in the strategically vital Strait of Hormuz. The United States is temporarily allowing the sale of oil from Russia — one of the world’s largest oil producers and exporters — that is at sea, the Treasury Department said Thursday, as nations scrambled to boost supply and bring down prices. Oil prices soared to almost $120 a barrel this week, the highest price since the pandemic. Russia’s economic envoy Kirill Dmitriev said on Friday that it was “increasingly inevitable” that Washington would lift more sanctions. “The United States is effectively acknowledging the obvious: without Russian oil, the global energy market cannot remain stable,” Dmitriev posted on Telegram. “Amid the growing energy crisis, further easing of restrictions on Russian energy sources appears increasingly inevitable, despite resistance from some in the Brussels bureaucracy,” he added. But French President Emmanuel Macron, whose country holds the rotating presidency of the Group of Seven advanced economies, said that the Strait of Hormuz's shutdown "in no way" justified lifting the sanctions on Russia - Moscow Times
The European Commission has asked Ukraine to allow inspectors to oversee the damage on the Druzhba pipeline, in line with a key demand from Hungary as it maintains a veto on a critical €90 billion loan for Ukraine until it becomes operational again. Kyiv has not yet answered to the Commission’s formal request, issued Thursday. “We are in intense discussions and contact with Ukraine on this issue, as has been the case for a couple of weeks already,” a Commission spokesperson said. “We have proposed a mission to inspect the pipeline to Ukraine.” Brussels insists it must first receive Kyiv’s approval before it can determine the mission’s scope and purpose. The situation is first for the Commission, which has never carried out an inspection of the sort, and has no legal precedent in an extraordinary spat between Hungary, which accuses Ukraine of sabotage, and Kyiv, which blames Russia. The inspection could include representatives from the Commission’s energy departments, member states, Ukraine and the private sector. It was not immediately clear that Ukrainian President Volodymyr Zelenskyy will approve it. Hungary and Slovakia have lobbied for two weeks for what they describe as a fact-finding mission to explore the pipeline, which transits through Ukraine carrying cheap Russian crude. Both countries insist they have intelligence to prove the Soviet-era pipeline is operational and transit is being blocked for “political reasons”. Instead, Kyiv says it was severely damaged during a Russian drone attack on 27 January and needs to be fixed, but the complexities of the war are delaying reparations - Euronews
Russia committed crimes against humanity by deporting Ukrainian children, a United Nations inquiry said Thursday — with President Vladimir Putin’s involvement in the policy “visible from the outset.” In its latest report, the Independent International Commission of Inquiry on Ukraine said the deportation and forcible transfer of children by Russian authorities, as well as enforced disappearances, represented crimes against humanity. “Based on new evidence, the Commission has now concluded that the Russian authorities committed crimes against humanity,” Commission chair Erik Møse told the United Nations Human Rights Council in Geneva. The determination marks a legal escalation. Earlier investigations had documented the removal of Ukrainian children from their homes but stopped short of classifying the practice as a crime against humanity — one of the most serious charges under international law - Politico
Facing possible defeat in an important referendum, Italy’s right-wing Prime Minister Giorgia Meloni on Thursday put herself at front of the campaign, throwing her full political weight behind a vote that is increasingly shaping into a test of her authority. The March 22-23 referendum on judicial reform is a decisive showdown for Meloni. The Italian right has long looked for an opportunity to remold a legal system that it sees as skewed to favor the left. But the national plebiscite has evolved beyond a vote on the rules governing the careers and oversight of judicial officials and into a broader vote of confidence in her and her government. The latest polls suggest she may be facing the first major reversal of her premiership, just as she appeared to be on a roll at home and in Brussels. Meloni’s tone was combative on Thursday, as she accused the current judicial structure of committing numerous miscarriages of justice, and calling some judgments “surreal.” Speaking at the Franco Parenti theater in Milan, Meloni doubled down on the central arguments of her campaign, insisting judges are unaccountable and out of control. She is also increasingly casting the judiciary as run by left-wing opposition “factions” and accusing judges of blocking her key goal of clamping down on illegal migration and crime - Politico
An Australian businessman has been found guilty of reckless foreign interference over his compilation of reports for two people who prosecutors said he should have suspected were Chinese spies. Alexander Csergo, 59, faces up to 15 years in prison after being convicted in a Sydney court on Friday. Authorities said two individuals known only as “Ken” and “Evelyn” offered to pay him for national security information while he was working in Shanghai. Csergo’s defence argued he had given them reports containing publicly available information, and that the only deceptions were plagiarism and including fake quotes from people he pretended to have interviewed such as former prime minister Kevin Rudd - BBC
Philippines President Bong Bong Marcos has sacked his tourism chief, Christina Frasco, who’s been mired in a controversy over spending of public funds for a campaign that used images of her. Her department also failed to meet its own targets. Marco has named her as Presidential Adviser for Sustainable and Resilient Communities. Frasco is a former mayor of Liloan, Cebu and spokesperson for VP Sara Duterte.
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