Foreign nationals have filled 80% of new UK jobs over the past decade, while millions of Britons have remained on out-of-work benefits, according to a new report by the Centre for Social Justice (CSJ).
The UK think tank said on Tuesday that British nationals accounted for just 734,000 of the 3.7 million jobs added to payrolls between 2014 and the end of 2025. EU nationals accounted for 408,000 new jobs, while migrants from the rest of the world filled around 2.5 million.
“Employers have gained unprecedented access to overseas labour while taxpayers have absorbed the growing cost of domestic worklessness,” the report said.
The findings are part of a major inquiry chaired by former UK Work and Pensions Secretary Iain Duncan Smith. The report argues that successive governments have relied on low-skilled migrant labor while millions of Britons have been “written off” by the welfare system.
Since 2020, payroll employment among non-EU nationals has surged by 2.1 million, while the number of people claiming out-of-work benefits has risen by 2.3 million. Much of the employment growth was concentrated in health and social care, administrative services, hospitality and retail.
“Compounding this, ministers have repeatedly pulled the easy lever of immigration rather than providing a better deal for left behind communities,” Duncan Smith said, urging coordinated reforms to welfare, immigration and regional development.
Around 6.7 million people in England, Wales and Scotland now receive at least one out-of-work benefit, equivalent to roughly one in six working-age adults, according to the CSJ. Since 2019, the number of claimants exempt from requirements to seek or prepare for work has climbed by nearly 1.7 million.
Annual spending on working-age benefits is projected to reach £136.1 billion ($181 billion) in 2026-27.
The report comes amid mounting political pressure over immigration. Reform UK leader Nigel Farage has repeatedly accused successive governments of favoring migrants and minorities over the white working class, demanding tighter border controls and denouncing what he calls a “two-tier” system of unequal treatment.
Britain has also struggled to stop illegal crossings of the English Channel. Some 33,374 people arrived in small boats in the year ending June 2026, down 23% from the previous year, according to the Home Office. The crossings accounted for 88% of detected arrivals via illegal routes.
Public concern remains widespread. An August YouGov poll found that 69% of Britons believed immigration over the previous decade has been too high, while 43% considered it mostly bad for the country, up from 33% in 2016.
The latest turn in Russia-US relations has shocked Kiev, outraged the EU, provoked discontent among a considerable number of politicians in the US, and left many observers around the world perplexed.
The Trump administration’s sudden decision to suspend sanctions on Russian diesel supplies appears to contradict its recent actions, including the adoption of tough new sanctions legislation intended to increase pressure on Moscow, and while some attribute the reversal to US President Donald Trump’s unpredictability, others see the beginnings of a new policy, or evidence of a fundamental change in the administration’s approach to Ukraine.
To understand what’s happening, however, we must look beyond the peculiarities of the US president’s public behavior. Trump’s extravagance, which frequently borders on the absurd, often conceals a relatively clear set of objectives, but whether those objectives are sensible is another question.
The most likely explanation for his latest reversal lies in domestic American politics, as the congressional midterm elections are less than a month away, and the Republican Party faces difficult prospects. Trump maintains an air of indifference, but losing control of both houses of Congress would condemn him to two years of political confrontation and considerable frustration.
He probably understands that there’s little prospect of fundamentally improving the economic situation, particularly consumer prices, before voters go to the polls, so for now, the emphasis is on psychological impact.
Russia isn’t the first country Washington has approached about increasing fuel supplies to international markets, and the more agreements Trump can announce, the more opportunities he has to proclaim that the White House is working tirelessly to protect ordinary Americans from rising prices.
The expectation, presumably, is that voters will forget how much of the present difficulty stems from Trump’s own actions in the Persian Gulf.
We shall soon discover whether this approach works, but there’s nothing particularly irrational about it, and Trump is pursuing a deliberate political objective. The fact that his latest decision contradicts previous statements doesn’t trouble him because he’s long operated on the assumption that words have value at the moment they’re spoken, but impose few obligations thereafter.
What does this mean for Russia, beyond the welcome prospect of additional budget revenues?
Colleagues from the Vatfor project have identified an important development, in that for the first time since the beginning of the conflict, the US president has made a significant decision regarding Russia without making Ukraine the determining consideration.
Until now, the Ukrainian question has been inseparable from virtually every aspect of Washington’s policy towards Moscow, but this time, not only has it been set aside, the decision directly contradicts Kiev’s interests at a particularly difficult moment.
Hence the indignation of the Ukrainian leadership, as from its perspective, the Americans have behaved unfairly.
There are probably several reasons for this change, but the principal one appears to be Ukrainian leader Vladimir Zelensky’s unwillingness to accommodate Washington’s demands that Ukraine stop attacking Russian energy infrastructure.
The strikes have become one of Kiev’s principal instruments of warfare, and American requests to curtail them have largely gone unanswered.
Trump, meanwhile, has become fixated on Russian oil supplies as a means of addressing rising fuel prices, and their importance shouldn’t be exaggerated, even if additional Russian supplies alone are unlikely to transform the global market. Nevertheless, Trump has evidently decided that Zelensky bears responsibility for aggravating the situation.
Once the US president reaches this conclusion, persuading him otherwise becomes extremely difficult. Therefore, for the moment, Kiev’s objections have simply been disregarded.
The more consequential question concerns American intelligence assistance, because to stop, or at least substantially reduce, Ukrainian attacks on Russian targets, Washington would have to restrict the intelligence it provides to Kiev, and much of this information amounts, in practical terms, to targeting assistance.
Trump already demonstrated willingness to use this instrument when around a year and a half ago, he temporarily suspended intelligence cooperation for several days to put pressure on the Ukrainian leadership.
A longer interruption would be a different matter and it would represent a genuine change in Washington’s approach to the conflict, effectively distancing the US from its Ukrainian partner, but whether Trump is prepared to take this step is uncertain.
There is, after all, an extensive informal coalition interested in maintaining the present course, and it includes the US defense industry, increasingly influential technology companies, European governments, and their political allies in Washington.
Trump encountered these forces during his previous attempt to advance his preferred settlement following the Anchorage summit, and that initiative ultimately produced little, so it remains to be seen whether the present effort will fare any better.
If Washington proves unwilling to exert sustained pressure on Kiev, the latest initiative could gradually lose momentum, and this is especially likely after the congressional elections, when the immediate political value of announcing presidential achievements will diminish.
The decisive question, therefore, is whether the US leadership can compel its partners to move in the direction it considers necessary, and if it can, an opportunity for further negotiations on a settlement could emerge.
There’s also a second conclusion which is particularly important for Russia, because Washington’s latest actions offer a glimpse of how Russia-US relations could develop after the military phase of the conflict ends.
The enormous collection of sanctions imposed on Russia is unlikely to disappear, and removing them would be exceptionally difficult, both procedurally and politically, given too many restrictions have become embedded in law and institutional practice.
Instead, the sanctions will probably remain formally in place, while decisions about their enforcement are taken according to circumstances; thus, when a particular restriction conflicts with US interests, Washington could suspend its application, but when the circumstances change, it can be restored.
In other words, sanctions will become instruments to be activated or deactivated according to immediate political and economic requirements, rather than permanent expressions of an immutable policy, and this is an important distinction between the American and European approaches.
The Americans generally display a greater degree of pragmatism as they are perfectly capable of proclaiming principles with great conviction, abandoning them when circumstances demand it, and returning to the same principles when doing so becomes convenient. European governments, by contrast, have increasingly bound themselves to political commitments from which retreat is both institutionally complicated and publicly embarrassing.
For Moscow, understanding this difference will be essential when constructing its future relationship with Washington now that the confrontation over Ukraine has reached a stage at which its consequences extend far beyond the immediate military and territorial questions.
Whatever the eventual outcome, it will help determine the structure of future political relations between Russia and the various components of the Western world, and while that structure is already beginning to emerge, its geometry remains unsettled, and the lines are still moving.
Fyodor Lukyanov is the editor-in-chief of Russia in Global Affairs, chairman of the Presidium of the Council on Foreign and Defense Policy, and research director of the Valdai International Discussion Club.
For four years, Europe presented its energy break with Russia as a strategic and moral necessity, with Brussels expanding sanctions, promising to cut Moscow’s revenues and preparing a complete ban on Russian liquefied natural gas. Yet European companies bought more LNG from Russia’s Yamal project in the first nine months of 2026 than in the same period of 2025.
EU ports received a record 12.18 million tonnes of Yamal LNG between January and September 2026, an increase of 9.5% over the same period in 2025. The gas arrived in 167 cargoes, roughly one every 1.6 days. The EU received 85% of Yamal’s recorded deliveries by volume even as the project’s worldwide shipments fell by 1.3%.
Urgewald, a German environmental and human rights organisation, placed the estimated benchmark value of those deliveries at €7.88 billion, using cargo volumes and monthly European TTF gas prices rather than disclosed contract payments. European leaders spoke of economic separation while EU ports remained the destination for a multibillion-euro Russian LNG trade.
Sanctions that preserved trade
The EU’s ban on Russian LNG under existing short-term contracts took effect on 25 April 2026. Eligible long-term agreements signed before 17 June 2025 could continue supplying Europe through the end of 2026, with the prohibition taking effect on 1 January 2027. Brussels could announce the coming break while established contracts kept Russian cargoes moving.
Five months after the ban on imports under eligible short-term LNG contracts took effect, EU ports received 792,440 tonnes of Yamal LNG in September, slightly more than a year earlier.
Yamal sold most of its output under long-term contracts signed before the war. TotalEnergies agreed to buy 4 million tonnes a year directly from the project, CNPC contracted 3 million, Germany’s SEFE inherited a 2.9 million tonne agreement, and Spain’s Naturgy held another for 2.5 million tonnes. Novatek sold part of its own allocation through separate agreements with TotalEnergies, Shell and Gunvor, now known as Centalion Group Ltd, These contracts kept major European energy companies commercially tied to Yamal after the political rupture with Moscow, securing supplies that could be sold or traded through their international portfolios, with destination flexibility varying by agreement.
TotalEnergies chief executive Patrick Pouyanné confirmed that its Yamal agreements were linked to Brent crude. During periods of extreme volatility, those long-term contracts secured supplies that could cost less than replacement gas on the European spot market. When spot prices outpaced oil-linked purchase prices, the gap created an opportunity to earn more from selling the contracted cargoes.
Buyers could exploit that opportunity through global portfolios spanning ships, terminals, storage facilities and supplies from several producing countries. They could exchange cargoes, redirect available gas and meet customer obligations from alternative sources, freeing supplies for sale in markets offering stronger returns.
Russian officials acknowledged that portfolio buyers could swap Yamal supplies against gas from other sources and direct available cargoes towards the most lucrative markets. A Yamal cargo could fulfil one obligation while freeing another supply for sale elsewhere, allowing traders to earn from price differences across markets.
The contracts that bound companies to Russian suppliers also secured access to gas that could cost less than replacement cargoes bought at crisis prices. Keeping those agreements meant preserving both the supply and the trading opportunities it created.
The profits behind the policy
TotalEnergies owns 20% of Yamal LNG and holds 19.4% of Novatek, the project’s controlling shareholder. It also buys and markets Yamal cargoes, giving it commercial interests as both a shareholder and a cargo trader.
In July 2026, chief executive Patrick Pouyanné told analysts that lifting and selling Yamal cargoes generated an average of about $400 million annually. TotalEnergies had direct access to the cash booked through its UK trading entity. The income fluctuated with Brent crude prices because the contracts were linked to oil.
TotalEnergies also retained rights to dividends through its ownership positions, although sanctions limited its ability to transfer those funds from Russia to Europe. Pouyanné confirmed that some cash flows had been distributed without disclosing how much had been repatriated, while the company’s Novatek dividends, which he had valued at around $600 million annually in 2024, had previously remained stuck abroad.
The commercial incentive extended beyond the immediate Yamal income, as continued deliveries preserved access to contracted gas while removing Russian LNG before replacement supplies became available could drive prices higher across the wider market. Pouyanné warned at a French Senate hearing that replacing those supplies would force Europe to pay more, and told analysts in April 2024 that sanctions on Yamal would benefit TotalEnergies’ global portfolio by pushing LNG prices higher.
TotalEnergies had commercial interests under either outcome, as continued Yamal trade generated sales income while a sudden prohibition could tighten supply and raise the value of gas sold elsewhere in its portfolio. Continued access and greater scarcity offered different routes to income, leaving the company with a potential financial benefit even if Russian deliveries stopped.
Germany’s state-owned energy group SEFE inherited a contract for about 2.9 million tonnes of Yamal LNG annually through the former Gazprom Marketing & Trading business, after Berlin nationalised its parent company, Gazprom Germania, in 2022. The group became Securing Energy for Europe, retaining the Russian supply agreement under German state ownership.
SEFE’s trading operation later attributed substantial profits across its LNG portfolio to contractual flexibility, freight optimisation and arbitrage, while its 2024 financial report recorded £411.2 million in EBITDA and £199.4 million in profit after tax. Those figures covered SEFE Marketing & Trading and its subsidiaries, without isolating the contribution from Yamal.
That flexibility extended to its Indian supply obligations, for which Reuters reported that the business had arranged cargoes from other sources to reduce freight costs. SEFE’s chief executive also explained that it could retain Yamal supplies in Europe and serve India from elsewhere in its portfolio when doing so was cheaper, although that account described an available trading option rather than documenting individual cargo swaps.
Under German state ownership, SEFE retained a long-term agreement for about 2.9 million tonnes of Yamal LNG annually, even as Europe sought to reduce its dependence on Russian energy. Berlin’s nationalisation changed the ownership of Gazprom’s former German business, but the Russian supply agreement remained in place, preserving its commercial ties to Yamal inside a state-owned international trader.
Shell’s phased withdrawal
On 8 March 2022, Shell announced a phased withdrawal from Russian hydrocarbons, including oil, gas and LNG, but later acknowledged that long-term contractual commitments remained despite the end of its spot purchases of Russian LNG.
Among those commitments was a 2015 agreement with Novatek for approximately 900,000 tonnes of Yamal LNG annually, with a term exceeding 20 years. In February 2023, a Shell spokesperson confirmed that the company was still receiving Russian LNG cargoes under that contract, almost a year after announcing its withdrawal.
Shell’s Yamal agreement sat within a global LNG portfolio, with its cargoes passing through a contractual transhipment point at Montoir-de-Bretagne in France. Across the wider business, Shell used its international operations to capture differences in regional demand and prices, and chief executive Wael Sawan attributed strong late-2023 trading results to arbitrage between eastern and western markets. Those results demonstrate the commercial value of portfolio flexibility, without identifying how much came from Yamal.
The contracts therefore carried commercial opportunities alongside their obligations, preserving access to gas that could be sold or exchanged within wider portfolios. Remaining in the trade could generate value even where companies presented their continuing purchases as a contractual constraint, although that potential should not be confused with a verified profit from each agreement.
Russian gas beyond Nord Stream
On 7 February 2022, then US President Joe Biden stood beside German Chancellor Olaf Scholz and said that a Russian invasion would bring Nord Stream 2 to an end. Asked how Washington could achieve that when Germany controlled the project, he maintained that the United States could ensure the outcome without explaining the mechanism.
Germany halted Nord Stream 2’s certification on 22 February 2022, preventing a pipeline that had never entered commercial service from beginning operations. Nord Stream 1 had already stopped delivering gas when explosions ruptured three of the system’s four pipeline strings on 26 September 2022, leaving only one Nord Stream 2 string intact. With the Nord Stream route out of operation, Russian LNG continued reaching European terminals through the contracts held by companies such as TotalEnergies, SEFE and Shell.
Yamal had begun exporting LNG in December 2017, almost five years before the Nord Stream explosions, and its seaborne supply network survived the loss of the pipelines. European companies continued buying Russian gas under long-term contracts, receiving by-sea supplies that remained commercially valuable even as the direct pipeline connection between Russia and Germany stood idle.
America captured the market
The decline of Russian pipeline supplies opened a larger European market for American LNG, and Washington worked with Brussels to expand the trade. In their 25 March 2022 agreement, the United States pledged to work towards at least 15 billion cubic metres of additional LNG for the EU that year, including supplies from international partners, while maintaining a regulatory environment that would support additional export capacity. The European Commission committed to working with member states to secure demand for approximately 50 billion cubic metres of additional American LNG annually until at least 2030, giving the effort to reduce Russian dependence a long-term market for US supplies.
American deliveries to the EU rose from 22 billion cubic metres in 2021 to 56 billion in 2022, exceeding the initial expansion target. By the second quarter of 2026, the United States supplied 63.2% of EU LNG imports, with Russia second at 17.3%. Europe’s retreat from Russian pipeline gas had been accompanied by a US-European policy effort to expand American supply, while Russian LNG retained a substantial place in the same market.
Dependence became leverage
Europe’s reliance on American supplies extended beyond LNG, giving Washington leverage over another essential fuel when the Trump administration asked the EU to release 120 million barrels of emergency diesel over six months. Washington presented reserve releases as an alternative to restricting American diesel exports, a threat with considerable force because the United States supplied around half of the EU’s diesel imports in August 2026.
Washington was pressing Europe to release finished diesel that could reach consumers without further refining, while its own emergency contribution consisted of crude offered to companies under loan arrangements requiring repayment in oil with additional barrels. The US Department of Energy’s September solicitation explicitly built replenishment into those contracts, leaving Europe under pressure to draw on immediately usable fuel while American releases carried a contractual obligation to restore its crude reserves.
The pressure was followed by a G7 agreement on 2 October 2026 to coordinate the release of 100 million barrels over four months, with a substantial diesel release brought forward into the first 20 days. G7 leaders also reaffirmed their commitment to refrain from energy export restrictions against one another, placing continued access to supplies alongside the agreement to draw down emergency stocks.
Washington had helped build a larger European market for American energy as part of the effort to reduce dependence on Russia, then used the prospect of restricting diesel exports to press European governments to release their reserves. Europe’s reliance on an allied supplier had left it exposed to pressure over access to fuel, with emergency stocks becoming part of the negotiation over keeping those supplies flowing.
A credibility crisis
European leaders need to explain how their effort to cut Russia’s energy revenues can be reconciled with rising Yamal deliveries to EU ports and European traders earning income from the cargoes. TotalEnergies’ disclosure of about $400 million in annual income makes continued trade harder to present solely as an unwanted contractual obligation, when the same agreement also sustained a valuable business. Compliance with the sanctions timetable does not resolve the political contradiction; it shows how much commerce that timetable allowed to continue.
Whose interests are being served when Europe distances itself from Russian pipeline supplies, remains a paying customer for Russian LNG and becomes more exposed to American pressure?
European leaders owe their citizens an explanation of why Russia remained an acceptable supplier for profitable LNG contracts while economic separation was presented as a strategic necessity. They must also explain whose interests were served by replacing that dependence with greater exposure to Washington.
Exclusive: Douglas Alexander, on trade delegation to India, talks up economic benefits of joint trading arrangements with Europe
Britain will benefit from much closer trading relations with the EU even if that means giving up its ability to negotiate free trade agreements, the Scotland secretary has said.
Douglas Alexander helped negotiate deals with India and the US when he was a trade minister under Keir Starmer.
Ola Källenius says it will ‘weaken the industry on both sides’ ahead of act intended to counter non-EU competition
Locking the UK out of the EU’s flagship industrial “Made in Europe” legislation would amount to a “deliberate choice” by EU leaders to “hurt” the car industry across the bloc, the head of Mercedes-Benz has said.
Speaking in his capacity as president of the European Automobile Manufacturers’ Association (ACEA), Ola Källenius said such a move would “weaken the industry on both sides”.
Days after Donald Trump announced a deal to import Russian diesel into the US in an effort to lower soaring pump prices, the world’s energy watchdog has warned that the global fuel shortage will drag into 2027.
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For years, Washington insisted that economic relations with Russia should remain restricted until Moscow changed its policies towards Ukraine. On 9 October, the White House found a reason to make an exception. Following a conversation with President Vladimir Putin, Donald Trump announced that Russia would supply more than 300,000 tonnes of diesel to American and […]
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Robert E. Hall, the Robert and Carole McNeil Endowed Professor in Economics and Senior Fellow at the Hoover Institution, Emeritus, and emeritus professor of economics in the School of Humanities and Sciences, is the recipient of the 2026 Nobel Memorial Prize in Economic Sciences.
Hall was recognized with the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his contributions to the "microeconomic foundations of macroeconomic stabilization," alongside economist Michael Woodford, with whom he will share the approximately $1.2 million prize.
"Robert E. Hall and Michael Woodford are awarded this year's prize in economic sciences for demonstrating how economic models could be reconstructed to revitalise stabilisation policy," according to an announcement from the Nobel Committee. "Rather than basing the models on statistical links between macroeconomic variables, such as inflation, production and consumption, they chose to build them on a microeconomic foundation. This encompasses an understanding for how the total mass of individual households and businesses affect the economy through their actions."
"This is a wonderful surprise," Hall said on Monday morning. "I've spent my career trying to understand how the economy works, following interesting questions wherever they led. When I thought I had a new idea, the next step was to find out whether it was actually new, whether it was right, and whether it mattered. I've been fortunate to have extraordinary colleagues and coauthors to help me sort that out, and working with them has been the greatest pleasure of my career."
Robert E. Hall, 83, is a member of the National Academy of Sciences and a fellow of the American Academy of Arts and Sciences, the Econometric Society and the Society of Labor Economists. Hall is an applied economist with interests in technology, competition, employment issues, and economic policy. He is a frequent contributor to discussions of national economic policy, including monetary policy, fiscal policy, and competition policy. Hall's research focuses on levels of activity and stock market valuations in market economies and on the economics of high technology, particularly the Internet.
Bob Hall is one of the most distinguished economists of his generation, whose work has profoundly shaped our understanding of economic growth, employment, and the forces that drive the American economy," said Hoover Institution Director Condoleezza Rice. "He has been instrumental in the way policy leaders think about the free market economy. This great honor is a well deserved recognition of a remarkable career, and we at Hoover are proud to call him a colleague.
"Bob Hall's creative and impactful work illuminates the connections between how households and firms behave and the outcomes of the economy as a whole, said Stanford President Jonathan Levin. "His insights have changed how governments and central banks respond to economic volatility. I'm thrilled that he has been honored with this year's Nobel Prize in Economics."
"Hall has made pioneering contributions to our understanding of household consumption, employment fluctuations, and market power," said Debra Satz, the Vernon R. and Lysbeth Warren Anderson Dean of the School of Humanities and Sciences. "It is wonderful to see his lifetime of work in applied economics recognized by the Nobel committee."
Along with Hoover colleague Alvin Rabushka, Hall is an active proponent of the flat tax. Their article in the Wall Street Journal in December 1981 was the starting point of an upsurge of interest in the flat tax. This led to their book, The Flat Tax. The pair was recognized in Money magazine's Money Hall of Fame for their contributions to financial innovation over the past twenty years.
Hall also serves as director of the research program on economic fluctuations and growth of the National Bureau of Economic Research, an interuniversity research organization. He is chairman of the bureau's Committee on Business Cycle Dating, which maintains the semiofficial chronology of the US business cycle.
Hall has advised a number of government agencies on national economic policy, including the Justice Department, the Treasury Department, and the Federal Reserve Board. He served on President-elect Ronald Reagan's Task Force on Inflation Policy and was a member of the National Presidential Advisory Committee on Productivity. He has testified on numerous occasions before congressional committees concerning national economic policy. He presented the Ely Lecture to the American Economic Association in 2001.
Before coming to Stanford, Hall was a professor of economics at the Massachusetts Institute of Technology and an assistant professor at the University of California at Berkeley.
Born in Palo Alto, California, he attended school in Palo Alto and Los Angeles, received his BA from the University of California at Berkeley and his PhD from the Massachusetts Institute of Technology. Hall is married to economist Susan Woodward and lives in Menlo Park, California.
"Stanford's Economics Department and the Hoover Institution gave me a dream job: the freedom and time to do the research I wanted to do," Hall said. "The taxpayers of California gave me an excellent education in the public schools and at Berkeley, and the federal government paid for my graduate education at MIT. I hope they will regard this as a satisfactory return on their investment. I thank my family, especially my wonderful wife and coauthor, Susan, and congratulate Michael Woodford, whose work has taught me a great deal."
They have developed models that have significantly improved the ability to implement effective stabilization policies.
On Monday, the Royal Swedish Academy of Sciences announced that the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Robert E. Hall and Michael Woodford for “microeconomic foundations of macroeconomic stabilization.”
The academy said the laureates have developed macroeconomic models that have significantly improved the ability to implement effective stabilization policies. Based on these models, well-timed fiscal and monetary policy measures can help smooth economic fluctuations.
Hall and Woodford developed macroeconomic models built upon the behavior of households, firms, and workers. Rather than relying solely on statistical relationships between variables such as inflation, output, and consumption, their approach explains how individual decisions shape the outcomes of the economy as a whole.
“This research sparked a paradigm shift in stabilization policy. The so-called New Keynesian models, derived from the work of both economists, make it possible to explain and quantify how economic policy measures affect cycles of expansion and recession,” reported BSB Revista.
Currently, these models are used by monetary and fiscal authorities worldwide to guide decisions regarding interest rates, public spending, and taxes. Their models help determine the timing and intensity of fiscal and monetary policies capable of mitigating the effects of economic shocks.
🏆 BREAKING: The 2026 Nobel Prize in Economic Sciences goes to Robert E. Hall and Michael Woodford! Recognized for their work on the microeconomic foundations of macroeconomic stabilisation, the two economists join a remarkable history spanning 58 awards and 101 laureates. Hall… pic.twitter.com/rLaLLpdUBM
“This includes energy crises, sudden shifts in household consumption, and other disruptions that can exacerbate recessions or inflationary pressures,” the Brazilian outlet commented.
The Academy highlighted that the work of both researchers contributed to “smoothing out the peaks and valleys” of the economy—that is, reducing the intensity of fluctuations between rapid growth and contraction.
Robert E. Hall, a professor at Stanford University in California, earned his bachelor’s degree in Economics from the University of California, Berkeley, and his doctorate from the Massachusetts Institute of Technology (MIT).
Michael Woodford, a professor of political economy at Columbia University in New York, studied at the University of Chicago, earned a law degree from Yale Law School, and also obtained a doctorate in Economics from MIT.
“The laureates’ work has provided us with a stable theoretical foundation for the models that are now used by central banks and governments around the world. With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume,” said John Hassler, chair of the Committee for the Prize in Economic Sciences.
The European Union is witnessing a full-blown social revolt. Governing political parties and their economic policies are held in open contempt as public protests and strikes escalate across multiple countries.
Protests, mass marches, and industrial strikes are spreading across the EU in France, Belgium, Spain, Italy, Germany, Ireland, Portugal, and other countries. The grievances are various, from students and teachers over woeful education services, to healthcare professionals and transportation workers denouncing crumby wages and pension cuts.
But at the core is a warmongering, dehumanizing system of capitalist inequality.
Unbearable living costs for basic needs, from food to housing, are driving millions onto the streets in desperation and anger at the lack of adequate political response to their concerns. As one French student said: “Too young to be listened to, old enough to be tear-gassed.”
The entire political system is being brought into disrepute for its dysfunction and indifference towards meeting rudimentary human needs. Then, infuriating all the more, are lies from the elite rulers and their propaganda media about “national defense and threat of war from Russia.”
In Spain this week, an 87-year-old frail woman known as Maricarmen died in hospital after she was evicted from her Madrid home because she could not pay the extortionate rent increase. Her plight has come to galvanize a nationwide protest against Spain’s housing crisis, a crisis that is repeated across every European country. Protesters shouted furiously that the pitiful old woman was “murdered by the state and corporations.”
In France, the brutality of police against student protests has shocked the nation and the world. Nearly 7,000 young people have been arrested, as riot police tear gas and shoot at largely peaceful rallies. Students gathering at the Place de la Bastille in Paris and other cities vow that they will not back down. One student had his hand blown off by a police stun grenade while another teenager lost an eye from a rubber bullet fired at close range.
The Place de la Bastille is where the French Revolution manifested in 1798 against a hated aristocracy amid abject misery. Today, the tensions are boiling towards another momentous rebellion, this time inspiring again similar movements across Europe.
These protests and the inhumane suffering that underlie them are channeling uprisings all over the EU.
There is a palpable sense that populations en masse have had enough of decades of inequality and chronic deprivation inflicted by capitalist policies that enrich a few and are enforced by governments slavishly serving the interests of capital over the needs of the citizen majority.
Western media reports talk about “cash-strapped” governments under pressure from bond markets to reduce record debt levels while workers, students and pensioners demand more public investment and relief from economic hardship.
That is a misleading partial portrayal of the problem. Omitted is the crucial backdrop that European governments are directing vast economic resources towards militarism and the proxy war in Ukraine against Russia. That is what is causing the “cash-strapped governments.” In other words, their declared fiscal straits are a policy choice, not some mysterious dilemma.
The social crisis sweeping across Europe is also seen in the United States and other Western-aligned nations. The background is a failed economic system that no longer provides a modicum of acceptable living conditions. The problem has been decades in the making from growing inequality and diminishing political representation. Today it is even questionable if Western states are democracies, controlled as they are by corporate oligarchies.
Nevertheless, the social crisis that is unfolding across Europe has been intensified and amplified by European political rulers operating in a relentless war mode against Russia.
The European Union has pumped hundreds of billions of euros into Ukraine over the past four years to prop up a NeoNazi regime run by a corrupt dictatorship – all for the objective of defeating Russia. The EU leaders – many of them unelected, like Ursula von der Leyen, Kaja Kallas and António Costa – are driven by an obsessive Russophobia. But that is only part of the explanation.
Other elected leaders and parties like France’s Macron and Germany’s Merz are also despised for their elitism and delusions of grandeur. Merz declares that he wants to make Germany the strongest military in Europe, in total tin-ear deafness to his nation’s economic and social problems and the sinister historical connotations of resurrecting Nazi Germany. Meanwhile, as his government suffers electoral defeat after defeat, European elites deprecate German voters as being blind because they dare to choose parties that are opposed to war with Russia.
There are many grounds for the Europe-wide contempt of ruling parties. Inequality, poverty, unemployment, soaring living costs, declining wages, deteriorating public services. Uncontrolled immigration amid the pressure on inadequate public resources is another cause for grievance. Europe’s complicity in the Israeli genocidal war on Palestinians, and Europe’s complicity in Trump’s aggression towards Iran, Yemen, Cuba, and so on, are other factors.
However, the bogus narrative that governments are “cash-strapped” is a cause for immense public disgust. There are plenty of economic resources to meet public needs. It’s a question of those resources not being permitted to create just and humane societies under the prevailing capitalist system with its priority of enriching a tiny elite class.
The conditions of “tight budgets” and “austerity for the masses” are created by deliberate policies of militarism and fuelling a proxy war in Ukraine.
European “leaders” and their NATO lobbyists like Mark Rutte demand hundreds of billions of euros to boost military industries while at the same time calling for draconian cuts in public spending and social welfare in order to pay for this reckless militarism. The EU is “lending” an additional €90 billion over the next two years alone just to prop up the corrupt regime in Kiev so that it can keep fighting a futile war with Russia. The perverse priority is driven by the military-industrial complex and its corporate investors. It is also driven by an ideological, propagandized mindset that demonizes Russia as an enemy. President Putin and other Russian voices have repeatedly stated that they do not want war with Europe. They say the conflict in Ukraine has root causes that can be resolved through diplomatic engagement. Why are European politicians implacably opposed to peace?
A major factor is covering for internal political and economic failure of the European system. The EU’s economies, as with those in the U.S. and other Western states, are bankrupt dystopias in terms of delivering on social and democratic needs. The failure has been compounded by the costs of war in Ukraine.
That failure is criminal and fatal for the politicians and governments who have overseen the policies. Thus, the political class, including the propaganda news media, cannot admit their criminal policies.
In the face of their own internal contradictions, the European political elites are seeking a solution by externalizing Russia as an enemy. This is the same modus operandi that European rulers have used for the past century and more, unleashing two world wars as a result.
These criminal politicians and their dysfunctional economic system are again pushing war as their escape plan for survival at the expense of millions of lives and at the risk of starting a third world war, one that this time around could involve catastrophic nuclear nemesis.
It is damning of virtually every European government, including primarily the British, that there are no calls for diplomacy and political settlement with Russia. They are committed to waging war on Russia to absolve themselves from the social devastation they are responsible for.
One positive thing, though, is that increasing numbers of people can see through the chicanery and lies. A German student placard summed it up: “We won’t fight your wars… Education not bombs!”
A day of reckoning is imminent. Criminal political leaders and their warmongering system are exposed like never before and in a way that demands total revolt as a proper solution. The consequences are not to be externalized this time. Chickens are coming home to roost, as Malcom X once said.
The recent phone conversation between Vladimir Putin and Donald Trump, and the diesel deal they struck, are the most important events in the US-Russia relations since the summit in Anchorage, Dmitry Suslov, deputy director of the Center for European and International Studies at Russia’s Higher School of Economics, tells Sputnik.
The diesel deal marks an important shift in the US’ stance on the Ukrainian conflict. “Until now, the Trump administration maintained that any sanctions removal and any practical cooperation with Russia, including cooperation on energy, is only possible after the Ukrainian conflict is resolved or after a ceasefire is achieved. And now we see that the Trump administration deviated from this stance.”
“The sanctions are waived for a long time, until April 7, and the US will commence mass importing of Russian diesel unrelated to the resolution of the conflict in Ukraine.”
The diesel deal is not related in any way to the energy and port ceasefire that Volodymyr Zelensky and his EU backers desperately seek, which is highlighted by Zelensky’s hysterical reaction to this agreement.
The deal may be the beginning of a broader pressure campaign by the Trump administration on the Ukrainian regime, to ensure that Ukraine agrees to Russia’s conditions for ceasefire.
Given the anonymous US officials warnings that the US may halt intelligence support to Ukraine if the latter continues hitting Russian oil refineries, it appears that the Trump administration is becoming increasingly upset with Zelensky.
“We are witnessing the confirmation of Western media reports about Trump being angry at Zelensky whom he asked six times to halt strikes against Russian refineries, only for Zelensky to refuse him each time. And now Trump makes this diesel deal with Vladimir Putin.”
The Trump administration apparently realized that Zelensky’s long-range strikes campaign against Russia backfired. “It drastically improved Russia’s situation and damaged Ukraine’s resilience due to the scale of Russia’s retaliation”.
Suslov also suggests that Zelensky seems to be banking on US Democrats winning the midterms, thus turning Trump into a ‘lame duck.’
However, even though Zelensky may feel himself safe hurling insults at Trump, it may have serious consequences as the POTUS will still be in charge of matters such as further arms sales to Ukraine.
“So if Zelensky enters into a serious clinch with him, Trump will be making such decisions not in Zelensky’s favo
In the classic martial arts film Enter the Dragon, Bruce Lee’s character is instructing a young, aspiring fighter. Irritated at the lack of progress his student is making, he points to the sky. “It’s like a finger pointing away to the moon,” he says as the student tries to focus on what his teacher is saying. “Don’t concentrate on the finger,” Lee says, slapping him on the head, “or you will miss all that heavenly glory.” The quote is derived from an old Buddhist text called the Śūraṅgama Sūtra, and the point is clear: Sometimes if you focus on what is immediately in front of you, you can miss the point entirely.
Something like this is happening in Washington, DC, right now. For almost two weeks, the debate around the progress or lack thereof in the Iran War has been focused on activity in the Strait of Hormuz. A whole host of maritime experts have emerged suddenly to inform us that the Trump administration has succeeded in reopening the crucial waterway to shipping. Maximalists are claiming that this means the United States has effectively won the war in the Middle East. Others are making the more modest claim that this reopening of the Strait will solve the looming energy crisis.
These were the two perspectives that most people who were not deeply involved in the debate heard. There was, however, a small but vocal minority who questioned whether the Strait had been opened at all. If Iran had effective fire control over the Strait in spring and summer, they asked, then why would they suddenly lose it now? Almost immediately after this question was raised, Iran settled the debate by striking an enormous number of ships: 12 and counting in less than a week.
To those of us who were paying attention, the whole exercise felt like looking at Lee’s finger as he points to the moon. As these debates unfolded, the market for U.S. Treasury debt continued an epic sell-off. Bloomberg quoted an investment banker who stated that Treasuries were “trading like a meme stock.” U.S. Treasury bonds have now experienced their worst long-run returns in history.
Treasury bonds are not just any old asset. For one, they are the debt of the U.S. government. If they become uninvestable, the capacity for Washington to live beyond its means through debt issuance is open to question. Treasuries are also the benchmark asset for the entire global dollar system that has allowed the U.S. to run enormous deficits for decades. If this asset starts “trading like a meme stock” and generating awful returns, foreigners will opt for something else. This week, the president of the German central bank stated that “the case for further diversification into gold remains significant.” People are talking.
In mid-September, the speaker of the Iranian parliament, Mohammed Bagher Ghalibaf, posted an equation on X. Unusually for an obscure piece of algebra, the post garnered nearly 7 million views. The equation was a modified version of what economists call the “Taylor Rule,” a method that economists and central bankers use when setting central bank interest rates. In normal times, the equation factors in expected future inflation and how much slack is in the economy. But Ghalibaf’s equation—which he called the “Straits Taylor Rule” —included two new variables: the Strait of Hormuz and the Bab el-Mandeb, the two waterways currently under fire from Iran and the Houthis in Yemen, respectively.
The equation is a stripped-down representation of Iran’s strategy. By controlling these waterways, Iran and its allied groups have gained control over the global energy market. By squeezing these chokepoints, Iran can assert de facto control over America’s financial markets by pushing up expected inflation. Central banks like the Federal Reserve realize that this is no mere bluff and have already started raising interest rates. Ghalibaf’s equation explains, to a very large extent, why American government debt is currently trading like a meme stock.
Meanwhile, at the same time as these pressures are felt in American financial markets, the real economy is undergoing a squeeze too. Recent reports from the Energy Information Agency suggest that American heating-oil bills are expected to rise by 21 percent this winter. Diesel markets are entering into a genuine crisis, with President Donald Trump floating the prospect of banning diesel exports to ensure that there are no shortages. Diesel is the lifeblood of the American logistics chain. If there are shortages, trains and trucks will not run and goods will not be delivered to shelves. Trump has walked back the diesel export ban for now, after strong-arming the Europeans to dump their oil and diesel reserves, but there is every chance that this option appears back on the table as the crisis worsens. Food prices are rising too, with sugar prices looking particularly worrisome.
Once again, Ghalibaf outlined how this is part of Iran’s overall strategy. In an X post this week, the speaker published a rudimentary graph—coupled with a haunting image of a ghost—showing rising commodity prices and interest rates on one side, and falling consumer confidence, foreign interest in U.S. Treasuries, hyperscaler investment, and housing affordability on the other. The Iranians are not just trying to squeeze the American financial system—they are aiming to put extreme stress on the entire economy—and it looks increasingly like they intend on making this pressure felt before American voters go to the polls on November 3.
The Trump administration has become fixated on the Strait of Hormuz, seeing it as a decisive battlefield on which the U.S. can win the war. But the Strait is merely a means to an end. For Iran, that end is to slowly demolish the American economy and financial system until the pressure becomes too much and the U.S. backs off. The idea that you can “win” such a battle is delusional.
The Strait is merely the finger in Lee’s analogy. It is Iran’s overall economic strategy—the moon—that we should focus on. And when we do, we come to the worrying conclusion that by the time the Trump administration cries uncle, the damage done to the American economy and financial system will be so severe that it could take many, many years to recover.
US President Donald Trump says he reached an agreement with Russian President Vladimir Putin during a phone call for Russia to supply diesel fuel to American and global markets.
Russia will deliver more than 300,000 tons immediately, followed by 500,000 tons in November and another 1 million tons shortly afterward, he wrote on Truth Social.
Trump also announced plans for an additional 3 million tons of Russian diesel, depending on the condition of Russia’s refineries, claiming the agreement would help bring down fuel prices in the US and worldwide.
Following the announcement, the US Treasury’s Office of Foreign Assets Control (OFAC) announced a temporary general license allowing Russian diesel supplies to global markets, effective immediately at Trump’s direction.
Trump believes the deliveries would help bring down diesel prices in the US and worldwide amid rising fuel costs and disruptions to global energy markets.
Andy Burnham's vision of the "common good" – with Net Zero at its heart – is just reheated Fabian socialism, says Dr Tilak Doshi – and the fingerprints of Left-wing economist Mariana Mazzucato are all over it.
The European Commission has now declared enlargement a “geopolitical imperative” – with important implications.
The bloc has just presented a package of reforms designed to prepare the Union for new members – with Ukraine and Moldova at the center of the effort, alongside Albania and Montenegro.
Commission President Ursula von der Leyen stated that “Europe’s future depends on the choices we make today,” framing expansion as essential to making the bloc “more resilient” and better able to shape its own destiny.
Candidate countries are already advancing: Ukraine and Moldova opened their first negotiating cluster in June 2026, and in July, opened Cluster 6 on external relations, foreign policy, security and, importantly, defense. In the words of Vessela Cherneva: “Currently, EU membership is the only way to integrate Ukraine’s and Europe’s security systems.”
The Commission plans “indicative roadmaps” for these four frontrunners (Ukraine, Moldova, Montenegro, and Albania) in its 2026 Enlargement Package, provided reform momentum continues. Gradual integration into strategic sectors such as energy, transport, digital networks and defense is explicitly on the table
This is no longer presented as a purely technical or economic process. Again, Brussels itself now describes enlargement as a “geopolitical” tool linked to European safety, prosperity and security. One may recall that earlier enlargement rounds were often framed in terms of shared values and market access.
Political scientist John Mearsheimer has long argued that the West’s “triple package” of policies – NATO enlargement, EU expansion and Western-style democracy promotion – added fuel to a fire waiting to ignite – meaning the Ukrainian crisis since 2014.
Actually, in his view, the trouble over Ukraine began in earnest at NATO’s 2008 Bucharest summit, when the alliance announced that Ukraine and Georgia “will become members”.
Russian leaders treated this as an existential threat. Washington ignored the red line and continued to push Ukraine toward Western institutions, including closer ties with the EU.
Back in his 2014 analysis Mearsheimer noted that the Union’s eastward march and the Eastern Partnership initiative were viewed in Moscow as hostile enough. “In the eyes of Russian leaders, EU expansion is a stalking horse for NATO expansion,” he wrote.
In this framework, the West’s efforts to promote “democracy” and “peel Ukraine away” from Russia completed the package. When Yanukovych rejected an EU deal in 2013, the “spark”, as Mearsheimer puts it, came. The result was crisis, then war. If one applies that framework consistently today, the resulting picture is quite straightforward.
To be clear, EU membership is not identical to NATO membership. Yet from a Russian great-power perspective the distinction becomes less meaningful when the two institutions are moving in the same geographical direction.
EU accession after all entails progressive alignment on law, foreign-policy positions, sanctions, energy, borders and increasingly elements of security and defense cooperation. The point is that an EU-member Ukraine would be economically, legally, institutionally and politically embedded in a Western bloc – and the same applies to the other Eastern European states. That, in broad terms, is precisely the structural transformation process Mearsheimer argued helped fuel the 2014 and then the 2022 crisis.
Ukraine remains the clearest case in point: before 2014 it functioned as a contested buffer. Mearsheimer (as well as specialists of the caliber of Henry Kissinger and Stephen Walt) argued a neutral Ukraine would be preferable, from a Western perspective – akin to Austria during the Cold War. In any case, the trajectory now points toward full Western institutional integration.
Moldova is arguably just as sensitive: it has a Russian military presence in Transnistria, occupies a strategic position between Ukraine and Romania – and is accelerating toward EU membership while deepening practical cooperation with Western militaries.
The recent Independence Day parade in Chișinău illustrated the point (without Soviet symbology, for the first time), as I’ve commented: Moldovan troops marched with Western weapons and vehicles; contingents from the Ukraine and eight NATO members, including the US, took part. NATO’s Political Committee had visited just days earlier, describing intensified cooperation.
Moldova for its part remains formally neutral, yet it is simultaneously negotiating EU accession – including the cluster on external relations and defense policy – and publicly displaying Euro-Atlantic partnerships.The Western center of gravity (post-USAID) in Moldova is shifting toward Brussels, which has stepped in with a large Reform and Growth Facility.
From Moscow’s point of view, the cumulative process looks like progressive incorporation of its western strategic environment into a Western political-security system.
Historically, great powers care intensely about the direction of strategic change in their immediate neighborhood. They typically do not wait until the process is complete before reacting – as seen in 2022.
In any case, the EU now frames enlargement itself as a geopolitical and security instrument. This language reinforces the very security dilemma Mearsheimer identified over a decade ago. The buffer zone between Russia and the Western institutional order continues to shrink. The risks of further escalation keep rising eastwards – adding to the tensions farther north, in the Baltic.
Uriel Araujo, Anthropology PhD, is a social scientist specializing in ethnic and religious conflicts, with extensive research on geopolitical dynamics and cultural interactions.
The EU’s difficulties in negotiating with China go beyond tariffs and quotas — structural economic differences, political fragmentation within Europe and broader geopolitical tensions reveal a fundamental misunderstanding of the China that Brussels is dealing with and the world in which it must compete. The Strategic Disconnect: Europe’s China Blindspot The fact that European negotiators […]
Iran’s economic adaptation over decades, marked by domestic production, regional trade and Asian partnerships, is on course to thwart Washington’s economic terrorism.
US Treasury Secretary Scott Bessent’s prediction that Iran’s economy would soon collapse underscores the depth of delusion within the current American leadership.
“Iran is absolutely not sanctionable,” Deputy Economy Minister Mortaza Zamanian said this week as Tehran worked to keep trade flowing despite Washington’s latest sanctions campaign.
Zamanian cited Iran’s extensive borders, established commercial routes and longstanding trading relationships, saying that they make it impossible for external pressure simply to switch off the country’s economy.
His remarks came as Washington intensified its economic terrorism against Iranian oil, shipping, aviation, finance, technology and foreign companies supporting those sectors.
The new American campaign has been accompanied by extraordinary predictions from senior American officials, including Treasury Secretary Scott Bessent’s claim that Iran could have “nothing left to trade” within two weeks.
Speaking on September 27, Bessent claimed that Iran would probably make its final oil deliveries to China within two weeks, after which, he asserted, “they will have nothing.”
That prediction deserves comparison with history, because American administrations have imposed increasingly severe sanctions on Iran since 1979 while repeatedly expecting economic pressure eventually to produce collapse.
Yet the economy did not disappear, and Iran instead developed domestic industries, expanded regional commerce, strengthened trade with Asian powers and accumulated extensive experience operating outside Western financial channels.
The proposition that an economy which has absorbed American sanctions for almost half a century will suddenly disintegrate within two weeks therefore indicates the depth of delusion among the current US leadership.
Iran enters this confrontation possessing a large domestic market, extensive productive capacity, enormous energy resources and deeply established commercial relationships across Eurasia.
These are not temporary sanctions evasions assembled during the present crisis, but economic capabilities developed over decades through investment, industrial learning, regional integration and repeated adaptation to external restrictions.
The most important fact about Iran’s economic structure is its size, because a country with more than ninety million people possesses a domestic market capable of supporting extensive production independently of Western consumers.
The World Bank describes Iran as relatively diversified for an oil-exporting economy, with a substantial domestic market, a large workforce and significant activity across manufacturing, agriculture and services.
That domestic market sustains production across food, pharmaceuticals, construction materials, steel, petrochemicals, machinery, transportation, consumer goods and numerous intermediate industrial sectors serving Iranian households and companies.
Iran is therefore not an economy that must export continuously merely to keep its factories operating, because a substantial portion of its production already serves domestic consumption, investment and infrastructure.
That distinction becomes particularly important when external restrictions are designed around the assumption that cutting foreign trade will automatically paralyze domestic economic activity.
A country whose productive system is centered on domestic demand possesses an economic engine that continues operating even when international transactions become more complicated.
Iran has also spent decades building industrial capabilities specifically suited to its own resource base, population, infrastructure requirements and energy-intensive economy.
Steel production, petrochemicals, cement, refining, power generation, construction, food processing and pharmaceuticals represent substantial industrial ecosystems involving domestic engineering, manufacturing, logistics and skilled employment.
These capabilities have repeatedly expanded during periods when access to Western investment and technology was severely restricted, demonstrating that Iranian industrial development does not depend upon continuous Western participation.
Iran’s long exposure to sanctions has produced another asset that cannot be imposed or removed through a Treasury designation, namely a large body of accumulated technical and commercial experience.
When foreign manufacturers withdraw, Iranian companies have learned to redesign equipment, substitute components, develop domestic suppliers and work with companies from countries willing to maintain commercial relationships.
Academic research has documented this process in Iranian industries, including evidence that sanctions simultaneously restricted access to foreign technology while encouraging the development of domestic technological capabilities.
The resulting industrial knowledge extends beyond individual companies, because engineers, technicians, procurement specialists and managers have accumulated practical experience with restricted supply chains over successive decades.
A manufacturer that has operated under sanctions for years does not design its procurement system around the assumption that every international supplier will remain available indefinitely.
It develops alternatives as part of ordinary business planning, creating a commercial culture in which substitution, regional sourcing and domestic production are integrated into industrial decision-making.
This is one of the strongest reasons the prediction of sudden economic emptiness looks disconnected from Iran’s actual economic structure.
There is no single foreign supplier whose disappearance can remove Iran’s entire industrial capacity, because Iranian production is distributed across thousands of domestic enterprises and numerous regional supply relationships.
The system has been shaped by scarcity for so long that adaptation has become embedded within the operating methods of Iranian companies themselves.
Iran’s geographical position provides another form of economic strength that cannot be erased by financial sanctions, because the country physically connects several of the world’s most important commercial regions.
Iran borders Turkey, Iraq, Armenia, Azerbaijan, Turkmenistan, Afghanistan and Pakistan, while its southern coastline provides direct access to the Persian Gulf and Gulf of Oman.
Those borders connect Iranian commerce with the Caucasus, Central Asia, South Asia, the Persian Gulf, Turkey and Iraq, creating commercial possibilities extending in several directions simultaneously.
This geography gives Iran direct access to neighboring markets while also placing the country along important transportation corridors linking Russia, Central Asia and the Indian Ocean.
The significance of Zamanian’s argument is therefore practical rather than rhetorical, because no financial authority can relocate Iran away from its geographic position.
Goods can move through different borders, suppliers can be found in different countries and exporters can redirect shipments towards different markets when commercial conditions change.
Iran has consequently developed a regional trading system that does not depend upon one border, one port, one customer or one foreign economic relationship.
Its trade with Iraq, Turkey, the United Arab Emirates, Afghanistan, Pakistan, the Caucasus, Central Asia and China represents an extensive commercial geography developed through years of interaction.
The World Bank has documented precisely this shift, noting that Iranian trade has increasingly pivoted towards neighboring countries and China as sanctions have restricted conventional international economic relationships.
That transformation is now an established feature of Iran’s economy rather than an emergency measure invented after the latest American escalation.
China gives Iran’s economic system another dimension because it combines enormous industrial capacity with sustained demand for Iranian energy and other commodities.
In other words, Iran possesses access to a major global market even while facing comprehensive American restrictions on its oil industry.
China also supplies Iranian companies with machinery, manufactured products, electronics, industrial equipment and intermediate goods required across the domestic production system.
The relationship therefore operates in both directions, with Iran supplying commodities and China supplying industrial goods, creating a commercial relationship considerably broader than the simple sale of sanctioned oil.
Iran consequently does not need unrestricted access to every Western market when it possesses substantial trade relationships with China and numerous neighboring economies.
Iran’s energy resources provide perhaps the clearest demonstration of the country’s underlying economic strength.
It ranks second globally in proven natural-gas reserves and fourth in proven crude-oil reserves, giving the country extraordinary resource depth beneath its existing industrial economy.
These resources provide not merely potential export earnings but also abundant domestic energy and petrochemical feedstocks supporting Iran’s manufacturing, electricity generation, transportation and industrial production.
Iran has consequently developed an extensive downstream economy that converts hydrocarbons into refined products, petrochemicals and industrial inputs rather than relying exclusively upon crude-oil exports.
The World Bank has specifically noted that sanctions encouraged additional processing of crude oil and hydrocarbons into petrochemicals, illustrating how restrictions have contributed to changes within Iran’s economic structure.
The country’s resource base also gives it a durable position in Asian energy markets, where large industrial economies require reliable supplies of oil and petrochemical products.
That is why American attempts to eliminate Iranian oil revenue confront persistent commercial demand rather than an absence of buyers interested in Iranian resources.
The financial system represents another area where Iran has developed substantial independent capacity after decades of exclusion from conventional Western banking.
Iran’s economic ties span a broad network of foreign entities, reflecting its commercial reach across banking, shipping, logistics, commodities, and manufacturing.
Against this background, Bessent’s latest prediction appears less to be an independent economic forecast than an expectation based on what the American campaign is intended to achieve.
His claim that Iran will have nothing left to trade within two weeks assumes that removing one major source of oil revenue effectively removes the economic foundations supporting the entire Iranian system.
Iran’s actual economic structure is considerably broader, because oil exports represent one component of national economic activity alongside manufacturing, agriculture, services, domestic consumption and regional commerce.
The World Bank estimates that Iran’s economy contracted during the Iranian year ending March 2026, while simultaneously describing an economy that has adapted to sanctions through changing trade patterns and alternative payment mechanisms.
Those facts should not be confused with economic collapse, because contraction in a particular period is fundamentally different from the disappearance of productive capacity, markets and commercial institutions.
The historical record is even more significant, because American sanctions have been imposed repeatedly since 1979 and have been intensified dramatically during successive administrations.
The sanctions regime has targeted Iranian banking, oil exports, investment, technology, shipping and foreign companies, with especially severe measures introduced during the 2010s and after Washington abandoned the nuclear agreement.
Iran nevertheless retained its industrial base, rebuilt oil exports after earlier restrictions, expanded non-oil exports and redirected a growing share of trade towards neighboring countries and China.
The American expectation that economic pressure would eventually produce decisive Iranian economic capitulation has therefore been tested repeatedly against an economy that continued adapting.
Predicting that a strategy that failed to trigger economic collapse over half a century will suddenly achieve it within fourteen days merits no serious consideration, because it reveals the naivety of its proponents.
Washington now possesses powerful financial tools, but financial power does not eliminate Iran’s factories, oilfields, farms, engineers, consumers, borders, ports, regional markets or established commercial relationships.
Iran enters the current phase with an economic architecture extending from domestic manufacturing plants to Chinese refineries, from Persian Gulf shipping networks to northern Eurasian trade corridors.
Its domestic market provides magnitude and size, its industrial base provides production, its energy reserves provide commodities and its geography provides access to several major commercial regions.
In other words, Iran already possesses the domestic capabilities and international relationships required to keep its economy operating beyond the reach of any single American economic sabotage.
About 12% of world trade passes through the Bab el-Mandeb Strait, but the strait is only part of the story: tiny Djibouti, leasing its geography to five military powers, has become an epicentre of rivalry where strategic rent may turn into catastrophe. An Oil Crossroads Turned Battleground for Influence Approximately 12% of global trade and […]
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