By Larry C. Johnson | SONAR21 | October 4, 2026 

Once again Karl W. Miller has put numbers to a problem that most of the commentariat still treats as a temporary price spike. His latest forward outlook, “The Five-Year Global Energy Crisis,” dated October 3, makes an argument that should alarm every finance ministry from Berlin to Jakarta. The war’s damage to Gulf energy infrastructure is not a disruption that ends when the shooting stops. It is a reconstruction problem measured in years and trillions of dollars, and while it is solved, the world will be short of the fuels that run its economy.

A ceasefire is not a repair crew

Miller’s central insight is simple. A ceasefire can reopen a shipping lane overnight. It cannot manufacture a compressor, mobilize commissioning engineers, or pay a contractor. The next phase of this crisis, he writes, is a competition for cash, equipment, qualified contractors and finished fuel.

His cost model is sobering. In his aggressive case, rebuilding the damaged Gulf energy system requires $1.16 trillion in total program funding. Under prolonged stress, with scarce equipment, rising prices and delays, the bill reaches $2.53 trillion. Even his most favorable case runs to nearly half a trillion dollars. He is careful to say these are model outputs, not contractor quotes, and that the true extent of the damage is the largest unknown. An April assessment put energy-related repair costs at only $34-58 billion. But the direction of his argument doesn’t depend on the exact figure. Every month of delay makes the same repair more expensive, because the global market for specialized equipment and crews is already stretched by LNG expansions, refinery maintenance and power projects elsewhere.

The timeline is just as stark. Weighted by cost, the rebuild averages almost five years from today. Only 60% of the work finishes by 2031, and the longest-lead packages run to seven years.

The money problem comes first

The most original part of Miller’s analysis is about cash. A damaged refinery may be worth rebuilding and technically repairable, and still sit idle because the government that owns it has to pay for food imports, salaries, electricity and water first. Lost export revenue doesn’t stop those bills. When a state borrows to keep paying them, that money can’t also pay an engineering contractor.

Iraq shows the problem in practice. In July, it faced a monthly public salary obligation of about $5.96 billion with a funding shortfall of $2.52 billion. A government in that position rebuilds nothing. It pays its people, and the export capacity that would restore its revenue waits. Miller’s warning is that this trap can stop reconstruction before it starts: without engineering funds and vendor deposits, factory slots go to other customers and delivery dates slip.

The fuel gap is the global transmission belt

For the rest of the world, the damage arrives through diesel and jet fuel. The figures Miller cites are already severe. Gulf diesel net exports in August were just over a quarter of prewar levels. Combined Gulf and Russian diesel exports were 1.6 million barrels a day below February. Global oil stocks had fallen 507 million barrels since February, and global refinery throughput in August was 4.2 million barrels a day below a year earlier.

Looking forward, Miller’s severe case assumes a shortfall of at least 3 million barrels a day of diesel and jet fuel, every year for five years. That’s about 1.1 billion barrels a year and 5.5 billion barrels over the period. He is explicit that this is a deliberate stress test, not a forecast, and that a faster-recovery path closes the gap by the fourth year. But the stress case is a plausible one. Restored capacity can be absorbed by refinery outages, deferred maintenance, recovering demand and delivery bottlenecks. Damaged refineries don’t come back at full capacity on the first day.

Inventories cannot fill a gap of that size for that long. Five and a half billion barrels is far beyond any country’s emergency stocks, which is why drawing down Europe’s reserves now, under pressure from Washington, only buys weeks. Without enough new supply, the balance can close in only one way: by using less fuel.

How the shortage reprices everything

The economic damage extends well beyond the missing barrels. When supply falls short, buyers bid for the marginal cargo, and that bid sets the price for all the fuel still being bought. Miller’s illustration: a $40-a-barrel premium across 10 million barrels a day of purchases adds $146 billion a year to fuel bills. Applied only to the 3 million missing barrels, it would add $43.8 billion and badly understate the real cost.

Scarcity also reprices credit. At $150 a barrel, a buyer purchasing 1 million barrels a day needs $2.25 billion to hold 15 extra days of inventory, and $3 billion at $200. Longer voyages tie up more fuel and more money in transit. A supplier can have the barrels while its customer can’t get a letter of credit. And a cargo that wins a bidding war for one country leaves another short. Competition redistributes the shortage before it eliminates it.

Who absorbs the shock

Diesel carries the crisis into the real economy. It runs road freight, farm machinery, mines, construction fleets and backup generators, none of which can switch fuels quickly. Higher diesel costs pass straight into freight rates and food prices, and when diesel isn’t available at any price, activity simply stops. Jet fuel carries the shock into aviation: higher fares, fewer routes and higher air cargo surcharges. Kerosene hits the households with the least room to adjust, in countries where it is still used for heating, cooking and lighting.

Miller’s regional assessment follows the money:

• Europe competes for replacement diesel and jet cargoes while running its refineries close to their limits.
• South and Southeast Asia face higher import bills, currency pressure and greater need for trade credit.
• Africa and smaller importers are the most vulnerable. Tenders fail, credit lines run out, and small cargoes become uneconomic long before global stocks are exhausted.
• The United States and other Atlantic suppliers face export demand competing with their own diesel needs, with refineries running so hard they have little tolerance for outages.

The ultimate balancing mechanism is demand destruction: freight deferred, low-margin factories idled, flights cancelled, and poorer importers losing every bidding contest. Miller warns against mistaking that for recovery. Lower consumption caused by rationing through price or credit is not a repaired energy system.

Case study: Europe

Europe shows what Miller’s framework looks like in practice. The continent burns about 5 million barrels of diesel a day, fuel for the trucks that move its goods, the tractors that plant its crops and, as winter approaches, the boilers that heat millions of homes.

How much does Europe produce, and how much does it import? Running flat out, EU refineries can produce roughly 4.5 to 5 million barrels a day of diesel and gasoil, and they are already operating close to their maximum. That leaves Europe roughly 85-90% self-sufficient at best. The remaining 10-15% comes from imports, and that margin sets the price for the entire market. Kepler puts the EU’s diesel imports from outside the bloc at about 580,000 barrels a day this year. Britain, which lost much of its refining capacity over the past two decades, is far more exposed: it imports more than half the diesel it uses.

The origin of those imports has changed dramatically. Russia was long Europe’s largest outside supplier until the EU embargoed Russian diesel in 2023. The Gulf filled much of the gap, until the war cut it off. Since March, the United States has supplied more than half of Europe’s diesel imports, and more than two-thirds in August and September. Europe has traded dependence on Moscow for dependence on Washington, and Washington has just shown it is willing to use that leverage, threatening an export ban unless Europe released its emergency stocks.

Europe’s diesel depends on imported crude as well. Its refineries run almost entirely on foreign oil: the EU imports about 97% of the crude it consumes. But the Gulf was never Europe’s main crude supplier. In 2025, Gulf Cooperation Council states supplied only about 7% of EU crude imports, Iraq another 5.8%. Europe’s crude now comes chiefly from the United States, Norway and Kazakhstan, which together supplied nearly half of EU petroleum imports in the second quarter of 2026. The volume has held steady; the bill rose 56%. But the crude isn’t the crude Europe’s refineries were built for. Much of Europe’s refining capacity was designed around medium sour crudes such as Russia’s Urals, with conversion units that turn the heavier part of the barrel into diesel. American shale crude is light and sweet. It refines readily into gasoline and naphtha, but it yields proportionally less diesel and jet fuel, the very products Europe is short of. As Miller notes, sour crude isn’t uniquely required to make diesel; the replacement barrels work, but not at the same yield or cost. The Gulf supply Europe really lost was finished diesel from Gulf refineries, and that is what the United States has replaced. The result is a double dependence: Washington is now Europe’s largest supplier of both the crude its refineries run and the diesel they can’t make. Even the non-American barrels carry risk. Most Kazakh crude reaches Europe through a Black Sea terminal at Novorossiysk, on Russian soil, a route that has already been hit by Ukrainian drones.

How long can Europe store diesel? This is where Europe’s apparent cushion turns out to be thinner than it looks. Unlike crude oil, which can sit in salt caverns for decades, diesel degrades. Under ideal conditions, conventional ultra-low-sulfur diesel can typically be stored for six to twelve months. With stabilizers, biocides and well-managed tanks, that can be extended to 18 to 24 months. Oxidation forms gums and sediment, water collects, and microbes grow in the fuel.

European diesel has an added problem. The EU standard, EN 590, allows up to 7% biodiesel in road diesel, and biodiesel oxidizes faster than petroleum diesel. Concawe, the European refiners’ research association, recommends a maximum storage time of six months for biodiesel and current blends containing it. Strategic stockholders can extend that by holding biodiesel-free product, but even then the reserve has to be rotated, sold into the market and replaced with fresh fuel on a cycle of a year or two.

That changes what Europe’s reserve really is. EU countries and Britain held about 52 million tonnes of gasoil and diesel in June, including nearly 38 million tonnes of emergency reserves, roughly two months of consumption. But a diesel reserve is not a stockpile Europe can fill once and forget. It is a stock that must be continually turned over, which means continually bought, and bought in the same tight market Miller describes. Every barrel released now to satisfy Washington has to be replaced later, at a higher price, from suppliers who are already short. And because diesel degrades, Europe can’t solve the problem by buying extra while it’s cheap and holding it for years. A reserve with a shelf life of a year or two cannot cover a structural deficit that Miller’s severe case puts at five years.

The conclusion for Europe is stark. It produces most of its own diesel but has no spare refining capacity. It depends on imports for the margin that sets prices, and those imports now come mostly from a single supplier that has shown it will use them as leverage. And its emergency reserve is both perishable and finite. In Miller’s terms, Europe is one of the buyers most exposed to the marginal cargo, and the least able to wait out a five-year shortage.

The implications for the global economy

Put together, Miller’s analysis describes a world economy facing a prolonged supply shock, not a temporary one. Fuel costs feed into nearly everything, so central banks fighting the inflation this crisis has already produced will face pressure for longer than they expect. Emerging-market importers face a combination of high fuel bills, weak currencies and tighter credit that has historically produced debt crises and unrest. And the reconstruction itself will absorb capital, equipment and specialist labor that would otherwise build new energy supply elsewhere, so the shortage may delay the investment needed to end it.

Miller’s strategic conclusion is the one policymakers least want to hear. Ending the conflict removes one source of disruption. It does not repair the energy system, which requires a separate sequence of financing, engineering, manufacturing, construction and commissioning that will take years. Until that is done, reliable fuel and the cash to buy it will determine which economies absorb the burden. Neither will be distributed evenly.

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By John J. Mearsheimer | October 4, 2026

The Trump administration and its supporters – including the Wall Street Journal editorial page – are working overtime these days to spin the news around the Iran war to make it appear that the US is winning and Tehran had better submit to Washington’s demands before it is wrecked, maybe even “annihilated.” Indeed, Trump is preparing the option of bringing the military hammer down on Iran after the midterm elections if Tehran has not surrendered by then.

In effect, Trump and his supporters are waging a “maximum pressure campaign” against Iran in the mainstream media.

This campaign is sure to fail. If anything, it reflects the Trump administration’s desperation. The president started a war the United States was bound to lose, and there is little he can do now to change that basic fact.

Trump’s propaganda campaign has two dimensions – one economic and the other military.

First, the administration argues that Iran is being economically strangled by the US naval blockade coupled with Operation Economic Outcast, the strategy announced by Treasury Secretary Scott Bessent on 24 August 2026. At the same time, it maintains that oil is once again flowing out of the Gulf at rates not far below those that prevailed on 27 February 2026. The implications are obvious: the economic punishment being inflicted on Iran will force it to capitulate soon, while the US economy – and the international community more generally – is well on its way to recovery.

Second, the US is now building up its military forces for a massive military strike after the mid-term elections, when Trump will be free of electoral constraints. This growing threat of a devastating US attack, coupled with the economic pain being inflicted on Iran, is designed to get Tehran to quit now, before its situation becomes even worse.

There are huge problems with this strategy. It sounds persuasive when the mainstream media dutifully purveys it, but it falls apart when one looks closely at what is actually happening.

Consider the military dimension. The headlines say the US is sending 10,000 additional troops and a third aircraft carrier – the USS Theodore Roosevelt – to the Persian Gulf region, creating the impression that Iran will soon be confronting three American carriers. Moreover, the additional troops – on top of the roughly 50,000 US troops already in the region – are portrayed as evidence that Trump is seriously considering putting boots on the ground.

The aircraft carrier story, however, is quite different from what the headlines suggest. The Roosevelt is reportedly being sent to replace the USS George Washington, while the supposed third carrier, the USS George H.W. Bush, has already left the Middle East and is now in Thailand. Thus, there is presently only one carrier in the region. Indeed, this is the first time during the war that the US has only one carrier in the Middle East, and it is difficult to imagine that there will be more than two – if even that many – after the midterm elections.

The larger problem is that the Iran war is severely straining the US Navy. Its senior leaders warn that the current operational tempo is not sustainable indefinitely. Carriers and other warships are being rotated through extremely long deployments, which cause significant maintenance and readiness problems that will have to be addressed at some point. This problem is compounded by the fact that US ships have lost access to nearby logistics facilities and increasingly depend on a supply chain that reaches back to Diego Garcia, which is about 2,500 miles from the Persian Gulf.

But even if three carriers are available to strike Iran, what could they accomplish in a renewed air campaign that the US and Israel could not accomplish together during the failed 40-day bombing campaign between 28 February and 8 April 2026? Some might argue that the US could finally destroy Iran’s oil infrastructure. The problem, however, is that Iran retains a second-strike capability and could retaliate by wreaking havoc on the oil infrastructure of the GCC states. One shudders to think what the consequences would be for the international economy.

On top of all this, the US faces a serious shortage of high-end weaponry, which is one of the main reasons it ended the 40-day bombing campaign and has shied away in recent weeks from engaging in tit-for-tat bombing exchanges with Iran. One would think that the shortage of critical munitions – both for striking Iran and defending against Iranian retaliation – would limit the scope and intensity of any renewed strategic bombing campaign, thereby reducing its chances of success.

Regarding ground forces, simply counting the number of U.S. military personnel in the Middle East is misleading when assessing the possibility of putting boots on the ground. What matters most in a ground war is the number of troops in actual ground-combat formations. I estimate that, of the roughly 50,000 U.S. military personnel already stationed in the region, about 5,000 belong to such formations: roughly 2,200 Marines and sailors in the 11th MEU, 2,000 soldiers from the 82nd Airborne, and possibly another 800 Army personnel in Kuwait associated with Task Force Spartan. Of the roughly 10,000 additional personnel now being sent to the region, another 2,200 belong to the 13th MEU. Most of the remainder are sailors assigned to the Theodore Roosevelt carrier and its supporting warships. Thus, given present deployment plans, I estimate that by late November the United States will have just under 7,500 personnel in ground-combat formations in the Gulf region—roughly 4,400 in the two MEUs and 2,800 Army personnel.

There is no way a ground force that small provides a promising option against a country with Iran’s population and geography. Even tripling that number to roughly 23,000—which is highly unlikely—would not fundamentally alter the problem. Retired Army General Barry McCaffrey estimates that securing the Strait of Hormuz would require roughly 150,000 troops and three to six months of fighting. For comparison, Russia invaded Ukraine in February 2022 with roughly 190,000 military personnel, and that force proved insufficient to hold much of the territory Russia initially captured. Iran has more than twice the population Ukraine had at the beginning of the Russian invasion, and its geography is considerably more forbidding for an invading army.

Simply put, the United States has not assembled anything remotely resembling the ground force required for a large-scale invasion of Iran. Indeed, from Tehran’s perspective, an American decision to launch such an offensive with anything resembling the forces presently available would present Iran with an opportunity to fight the United States under exceptionally favorable circumstances.

At the risk of beating a dead horse, two further points are in order. First, given how unpopular the Iran war is with the American public, there would almost certainly be a huge uproar if large numbers of US soldiers began coming home in body bags. Second, how are the Marines, who are aboard amphibious assault ships, supposed to land on Iranian territory if the missile and drone threat from Iran is forcing the US Navy to keep those large and vulnerable ships far from the Iranian coast?

Let’s turn to the economic dimension. There is no question that the US is doing great damage to Iran’s economy and inflicting enormous hardship on the Iranian people. But that has been true for a long time. The key question is whether that punishment can coerce Iran into surrendering to American demands.

There is no evidence that Iran is caving in to American pressure, and there are three reasons to doubt that it will. First, it is exceedingly difficult to find a case in the historical record in which an economic blockade by itself caused the target state to surrender. Second, Iran sees the US and Israel as existential threats to Iran – hardly surprising given the genocidal language Trump has used when talking about Iran – and states that believe their survival is at stake are exceptionally difficult to coerce. Third, Iran has a formidable escalation option if the economic pain becomes too great: it can attack the oil and gas infrastructure of the Gulf states and Israel, as well as their highly vulnerable desalination plants.

In short, it is difficult to see economic pressure alone forcing Iran to accept Trump’s terms. That is probably one reason the United States is once again talking about using military force. But, as I argued above, that option holds little promise of producing a favorable outcome.

Finally, there is no question that more oil is flowing out of the Gulf today than was the case in early September. But both Iran and the Houthis are working hard to reverse that trend. Iran is attacking US-escorted tankers on a daily basis, while the Houthis are targeting vital oil infrastructure inside Saudi Arabia. Moreover, despite the increased flow of oil out of the Gulf, gasoline prices remain very high, and a host of other economic problems show no signs of easing anytime soon, including high diesel prices, persistent inflation, elevated mortgage rates, and dangerously high bond yields across much of the West.

All of this is to say that the Trump administration has powerful economic incentives to shut this war down as soon as possible. Indeed, it would hardly be surprising if there were a growing sense of desperation behind closed doors among Trump and his advisers.

This, of course, helps explain why the Trump administration and its allies are waging a media campaign designed to persuade Iran that its days are numbered and that it had better concede to American demands before it is too late. The facts, however, tell a different story. The success of this strategy therefore depends on Trump being able to bamboozle the Iranians into believing that Godzilla is closing in on them. There is little reason to think Tehran will be hoodwinked.

RT | October 5, 2026

Poland and Romania have refused to help Kiev move millions of tons of grain – which got stuck in Ukraine following Vladimir Zelensky’s war on exports – into the EU, Politico reports, citing officials in Warsaw and Bucharest. Zelensky’s 40-day campaign resulted in Russia implementing a de facto blockade of Ukraine’s Black Sea ports, with the wider consequences of the strikes estimated at 1.5% of the country’s collapsing GDP.

Last week, Ukrainian Agriculture Minister Taras Vysotsky appealed to the EU for a €1.1 billion ($1.23 billion) allocation to improve transit capacity, which would help free large quantities of grain – Ukraine’s key source of income – trapped in the country.

The request came after Zelensky’s 40-day PR ‘pressure campaign’ on Russia, which involved long-range strikes on oil refineries and civilian infrastructure. The effort backfired, as Russia ramped up strikes on Ukraine’s military-related logistics, including the key hub of Odessa, accounting for an overwhelming majority of Kiev’s agricultural exports.

Speaking to Politico, Vysotsky described the situation as “very, very critical,” after his ministry reported the export of 2.4 million tons of agricultural products in September, just 46% of what Kiev considers the required volume.

He added that export restrictions leave Ukrainian farmers without cash needed to plant seeds now for next year’s harvest. “If the situation stays like this till spring, it could mean the decrease of even 35-40% of the planted area,” he warned.

Last month, Ukrainian officials estimated damage to infrastructure from Russian strikes at nearly $10 billion, with wider consequences amounting to around 1.5% of GDP.

While the EU as a whole is yet to give a definitive answer to the €1.1 billion request, Poland and Romania – which are crucial to facilitating Ukraine’s exports – ruled out any significant assistance.

Romanian Agriculture Minister Barna Tanczos rejected the prospect of substantially expanding capacity, telling Politico that “the interest for our own farmers remains a priority.”

Ukrainian cargo and low Danube water levels are already straining Romanian ports, he said, adding: “Everybody knows we cannot double the number of trains, we cannot double the roads, railways and port capacity. It is what it is.”

The Polish Infrastructure Ministry spokesperson said, as cited by Politico, that Poland “has no plans to introduce any changes aimed at increasing the transit of Ukrainian agricultural products.”

Before the €1.1 billion plea, Ukraine requested €220 million from the EU in grants to support farmers affected by disrupted exports, but the bloc effectively turned it down, pointing instead to existing EU mechanisms.

Agricultural trade has long been a source of friction between Ukraine and its EU neighbors. After the escalation of the Russia-Ukraine conflict in 2022, Brussels suspended duties and quotas on Ukrainian exports, which triggered massive protests from European farmers over what they saw as unfair competition. As a result, the EU introduced an ‘emergency brake’ system in 2024, allowing tariff quotas to return for sensitive products if imports exceed set thresholds.

In addition, many of Ukraine’s neighbors, including Poland, Hungary, and Slovakia, maintain significant restrictions on Ukrainian imports at the national level.

Donald Trump tried to use America’s economic weight to force China to bend, only to discover that Beijing has built an economic weapon of its own that Washington cannot tackle. China Finds America’s Chokepoint For years, the central assumption underlying Washington’s economic confrontation with Beijing was that interdependence gave the United States more leverage than […]

By Kamran Yeganegi | The Cradle | October 3, 2026

Saudi oil tankers are loading again at Yanbu, less than three weeks after drone strikes shut down the East–West Pipeline that supplies the Red Sea port. On 24 September, crude was reported to be flowing west again, although no ship had yet loaded a cargo.

By 29 September, trade sources and shipping data showed that loadings had resumed. The interruption and recovery have offered a costly demonstration of what an oil route around the Strait of Hormuz can, and cannot, do.

Yanbu, Ceyhan and Baniyas sit at three very different points on that spectrum.

Yanbu has a 1,200-kilometer pipeline in operation and an established export terminal. Ceyhan is already loading Iraqi crude, though current Iraqi flows are measured in hundreds of thousands–not millions–of barrels a day. Baniyas could eventually give Iraq a major Mediterranean outlet, but for now it remains a project that depends on new infrastructure and financing, political agreements, and protection across two fragile states.

The comparison begins with the oil that reaches ships during a crisis. Pipeline capacity matters only as much as the pumps, terminals, and security along the route allow.

Yanbu’s exposed lifeline

Saudi Arabia’s 1,200-kilometer East–West Pipeline has a nominal capacity of 7 million barrels per day (bpd). Before the September strikes, reported flows through the system were already below that capacity. Three pumping stations were damaged, and the shutdown halted crude loadings at Yanbu. Riyadh blamed Iraqi resistance factions; the Islamic Resistance in Iraq denied responsibility for the strike. Baghdad condemned the strike and opened an investigation.

Restarting the line on 22 September did not immediately restore exports. Crude had to reach Yanbu and replenish stocks before tankers could load. Two vessels scheduled for 23 September left without cargo, according to shipping data cited by Reuters. Loadings resumed days later, after a strike on pumping stations hundreds of kilometers inland had kept the port idle.

Yanbu was moving between 2 million and 2.65 million bpd when tankers returned. Traders expected flows to rise to 3 million to 4 million bpd, but a return to the pre-attack level of roughly 5.5 million bpd could take another month.

The voyage has become more expensive, too. Quoted war-risk premiums for Saudi-linked tankers calling at Yanbu have risen to around 3 percent of vessel value, up from below 1 percent in early July. For a $100 million tanker carrying two million barrels, a 3 percent premium adds roughly $1.50 to the cost of each barrel, before fuel or freight. Yanbu may bypass Hormuz, but insurers are charging heavily for the detour.

Yanbu still leaves Asia-bound cargoes exposed to the southern Red Sea and Bab al-Mandab. Attacks and warnings by Yemen’s Ansarallah-aligned army have made passage through those waters more costly and uncertain. Heidmar Maritime Holdings chief executive Pankaj Khanna has highlighted another problem for shipowners: the Red Sea lacks the US naval protection sometimes available around Hormuz.

Saudi Arabia has escaped one strait only to send its oil toward another. Cargoes bound for Europe can head north through the Red Sea, but Asian customers require the southern passage. That split limits how freely Riyadh can reroute shipments when risks around Bab al-Mandab rise.

Ceyhan’s southern supply problem

Ceyhan is already loading Iraqi crude, though its northern supply remains small compared with the volumes exported through the Gulf. Flows stood at roughly 200,000 bpd in mid-September, down from about 250,000 bpd before the war. Baghdad’s challenge is getting oil from its vast southern fields into that northern export system.

Iraq has begun moving southern oil north by road. A September trial sent 209 tanker trucks carrying about 38,000 barrels to Kirkuk over two days. Basra Oil Company later said around 250,000 bpd was being transported north for onward export through Ceyhan.

Truck convoys are useful during a crisis, but they cannot replace a high-capacity pipeline. The first trial averaged about 182 barrels per truck. Moving 250,000 barrels at that rate would require roughly 1,370 loaded truck trips, with vehicles returning south for the next run. Road conditions and loading points impose additional constraints. Expanding Ceyhan therefore depends less on the Turkish terminal than on a reliable south-to-north connection within Iraq.

Energy analyst Richard Bronze of Energy Aspects has warned against treating bypass infrastructure as a substitute for Hormuz altogether. “The idea that the strait will stop mattering or become worthless is pure rhetoric,” he told Arab News. For Iraq, the road to Ceyhan provides an outlet. It cannot yet carry southern crude at a scale that would loosen Baghdad’s reliance on the Gulf.

Baniyas across the war map

Baniyas is the most ambitious option because it could reshape Iraq’s export map. Iraq has approved preliminary studies comparing routes including Basra–Haditha–Kirkuk–Ceyhan and Basra–Haditha–Baniyas, with a consortium that includes Chevron, TI Capital, and Qatar’s UCC. Chatham House estimates the wider Iraq–Syria network at around $15 billion, with a proposed initial capacity of roughly 2 million bpd and construction potentially taking about four years.

Syrian officials have given a somewhat shorter timeframe. Syrian Petroleum Company chief Youssef Qablawi said in August that the Haditha–Baniyas project could take around 30 months to three years after final agreements and engineering work. Even the shorter timetable places Baniyas beyond the present shipping crisis, assuming agreements and funding are secured.

The route’s security problem is also more complex than a line drawn on a map. A pipeline from Haditha toward Syria would traverse western Iraq, including areas where ISIS cells remain a concern, before entering eastern Syria, where state authority remains uneven and armed groups continue to operate.

Chatham House noted in September that armed actors, including ISIS, have attacked oil wells and tanker trucks in eastern Syria, while Iraq’s fragmented security system leaves multiple actors capable of obstructing or extracting rents from infrastructure.

Israel’s strikes and military presence in Syria would loom over any pipeline to Baniyas. There is no evidence that Israel plans to attack the project, but a route through Syrian territory would depend on security guarantees Damascus cannot yet provide.

Baniyas itself is more functional than the word “reconstruction” sometimes suggests. Iraqi-origin fuel oil has already been trucked through Syria and handled at the terminal, demonstrating that a commercial logistics chain can operate.

The existing trade gives the project a foothold, but handling trucked fuel oil is far removed from loading 1–2 million bpd of pipeline crude. Storage, pumping systems, berths and terminal reliability would have to be scaled accordingly.

The old Kirkuk–Baniyas line was badly damaged, and the planned network may take a different route. Existing truck traffic therefore offers little indication of the cost or the construction work required to handle sustained crude flows.

Sanctions are another constraint, though less severe than under Bashar al-Assad. The EU lifted its broad economic sanctions on Syria in 2025 while retaining security-based and targeted measures, and the US rescinded Syria’s designation as a State Sponsor of Terrorism in August 2026. That lowers, but does not eliminate, banking, insurance, due-diligence and counterparty risk for a multi-billion-dollar project.

Iran’s leverage runs through Iraq

The geopolitical logic behind Iraq’s western routes is often framed as a means to reduce Iranian leverage over Hormuz. Iran’s influence in Iraq also extends through energy trade, political networks, and armed factions embedded in Iraq’s fragmented security order.

At the same time, Tehran does not treat Iraq exactly as it treats other Gulf states. Mostafa Khoshcheshm, a political commentator on Iranian television, told Al Jazeera in August that Iran viewed Iraq as a “friendly state” and had allowed some Iraqi oil tankers to pass Hormuz.

He said Baghdad had “always stood up to the United States.” His view is one Iranian reading of Baghdad’s position. An Iraqi move toward Gulf- and US-backed western export corridors would also alter the economic leverage surrounding it.

An expansion through Baniyas or Ceyhan would give Baghdad more room to negotiate export terms without severing its ties to Iran. Gulf investment would bring new transit partners and sources of capital, though it would not automatically shift Iraq’s political alignment.

The security question cuts both ways. Iran-aligned resistance factions could be a source of vulnerability if they viewed a corridor as threatening their strategic interests. ISIS remnants and local power brokers could also obstruct it, while transit-state disputes might halt flows without an attack. Yanbu’s damaged pumps are a warning about the vulnerability of a land corridor.

Iraq’s other proposed exits face obstacles of their own. Reviving the dormant Iraq Pipeline through Saudi Arabia (IPSA) would require Riyadh’s agreement and extensive repairs. The Basra–Aqaba route would have to be built across western Iraq and Jordan.

Egypt’s SUMED pipeline is already operating, but Baghdad has no direct way to feed Iraqi crude into it. For now, the southern Gulf terminals remain Iraq’s only outlet capable of handling exports at scale.

What reaches the tanker?

As of early October, Yanbu can move the largest potential volume because the pipeline and port already exist, but its 7 million bpd nameplate figure overstates the immediately exportable capacity, while Red Sea shipping costs and the Bab al-Mandab remain concerns.

Ceyhan can now load Iraqi crude, but expansion depends on resolving Iraq’s internal north–south logistics. Baniyas offers the largest geopolitical transformation, but it remains years, billions of dollars, and security agreements away from moving crude at scale.

Hormuz remains central to the region’s oil trade even as states invest in alternatives. Yanbu, Ceyhan and Baniyas each shift some exposure from the strait to pumping stations, desert corridors, insurers or transit governments. Their value will be measured by the barrels reaching ships when the Gulf route is under threat, not by the capacity listed in a project plan.

 Al Mayadeen | October 2, 2026

The European Union has begun assessing contingency scenarios in case German Chancellor Friedrich Merz leaves office or becomes increasingly focused on domestic political difficulties, Politico Europe reported Friday, citing diplomats and European officials.

According to the report, governments in two European countries have held internal discussions on how a possible end to Merz’s chancellorship could affect EU policymaking.

The discussions reportedly reflect growing concern in Brussels over political instability in Germany following major electoral setbacks for Merz’s governing conservatives and renewed tensions within the coalition.

Recent regional elections have weakened Merz politically. Reuters reported that the Christian Democratic Union (CDU) suffered its worst-ever result in Mecklenburg-Western Pomerania in September, failing to clear the threshold to enter the state parliament, while the Alternative for Germany (AfD) made further gains.

Berlin’s Political Turmoil Raises EU Concerns

Politico Europe reported that officials consider two scenarios particularly disruptive: Germany being left without an effective leader or a right-wing government emerging in Berlin. However, the report said both scenarios are viewed as unlikely in the short term.

Under Germany’s constitutional system, a chancellor cannot simply be replaced by a successor appointed by the governing party. The Bundestag elects the chancellor, meaning any leadership change would require the necessary parliamentary majority.

For Brussels, the political uncertainty matters because Germany remains the EU’s largest economy and a central actor in negotiations over major bloc-wide policies.

Reuters reported Thursday that Merz is facing growing domestic pressure, while speculation about possible successors has emerged within the CDU. Merz has nevertheless rejected calls to step aside and continues to pursue his government’s policy agenda.

EU Budget Dispute Adds Pressure

Merz’s domestic political position could also affect negotiations over the EU’s next seven-year budget.

According to Politico Europe, Germany is part of a group of member states, including the Netherlands, Sweden, Denmark, Austria, and Finland, seeking substantial reductions to the proposed long-term EU budget. The report said officials believe domestic political pressure could encourage Berlin to take a tougher negotiating position in Brussels.

The budget dispute comes as EU governments debate competing priorities, including defense, industrial investment, infrastructure, and support for Ukraine.

Military Buildup Remains Central to Merz’s Agenda

Despite the political pressure, Merz’s government continues to prioritize strengthening Germany’s armed forces. Reuters reported that Berlin’s debt-financed investment drive is supporting both infrastructure and military expansion, while the government has committed hundreds of billions of euros to rebuilding the armed forces.

Merz has also reaffirmed Germany’s support for Ukraine and called for stronger European military capabilities, while accusing Russia of conducting hybrid attacks against Europe. Moscow has rejected such accusations.

Any change in Berlin’s political leadership would therefore carry implications beyond Germany, potentially affecting EU budget negotiations, defense policy, relations with Russia, and the bloc’s wider strategic direction.

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