Thursday 12th March, 2026

It is not possible to predict who will emerge victorious in the ongoing war in the Middle East or whether the conflict will end without a clear winner though US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu would have the world believe that they will surely be the winners. The US-Israel military power is doubtlessly far superior to that of Iran, but in a war of this nature, military might alone does not guarantee a clear victory.

Difficult as it may be to predict who will win in the current Gulf conflict, the overall loser is already known; it is the world economy. Global markets are heavily reliant on President Trump’s assurance that the war will not last long, and the release of the G7 strategic oil reserves to stabilise the world oil supply. But Trump’s most intense airstrikes on Tuesday have not yielded the desired results. Iran remains defiant and has raised the stakes for the global economy by threatening to bring oil exports from the region through the Strait of Hormuz to a complete halt unless the US and Israel stop attacks. It continues to fire missiles and carry out drone attacks on US interests in the region. Trump has announced that the US will seriously consider providing security to the ships sailing through the Hormuz Strait, but whether the US is equal to the task is the question. It is being argued in some quarters that Trump and Netanyahu have already bitten off more than they can chew.

There is reason to believe that Trump went to war with Iran without a proper assessment of the ground situation. His plan was to make short work of the current Iranian regime with shock-and-awe aerial bombardments and the assassination of Iranian Supreme Leader Ayatollah Ali Khamenei, but his plan has apparently gone awry. The slain Iranian leader’s son has been elected the Supreme Leader. Trump may have expected the Iranian anti-government protesters to make the most of the ongoing bombing spree, come out in their millions and bring down their embattled regime, but they are silent today. Perhaps, they are too scared to challenge the beleaguered regime, which has warned that ‘every soldier has his finger on the trigger’ and protesters will be treated as traitors. It is also possible that the protesters are now disillusioned with the US after realising that Washington has sought to use them as a cat’s paw in its efforts to grab Iran’s oil resources.

Has the US made, in Iran, a military miscalculation similar to the one in Afghanistan? The US Intelligence community and the military estimated that Kabul was resilient enough to hold out for several months after the withdrawal of the US troops in 2021. But that city fell to the Taliban in days, causing the then US President Joe Biden to admit that the collapse had happened “more quickly than the US had anticipated”.

Iran may not have anticipated a joint US-Israel military operation of this magnitude. It remains to be seen whether Iran can sustain its missile and drone attacks vis-à-vis the US-Israeli air strikes on its arms stockpiles and military installations. However, what one gathers from the views of military analysts is that it is very unlikely that President Trump will go so far as to deploy ground troops in Iran, with about 59% of Americans opposing his war, according to opinion surveys. In its war for oil in Iraq, the US had the backing of a much broader international coalition.

Nothing could be more humiliating to the US than Washington’s call for help from Ukraine to deal with the Iranian drones. Ukrainian President Volodymyr Zelensky, whom President Trump once showed the door during a White House meeting, has confirmed that the US sought his help to defend its allies in the Persian Gulf against the Iranian drones. Did Trump start a war without a proper assessment of the enemy’s drone capability?

The enormous economic cost of the Middle East conflict will have to be borne by not only the parties thereto but also by the entire world. Trump’s assurances and the G7 responses have prevented panic in global markets, but unless the US and Israel end the war soon and take steps to keep the Strait of Hormuz functional, oil prices will soar again, pushing the world closer to a global recession. If Trump and Netanyahu stop their war midway, they will face a domestic political backlash. Trump and Netanyahu have the Epstein files and corruption charges to contend with, respectively. The Trump administration is facing midterm elections in November. Politically speaking, Trump and Netanyahu are on a tiger ride in the Middle East.

The biggest challenge before the US and Israel in the ongoing conflict is to prevent Iran from shifting the war to the economic front, and make the global economy scream.

Wednesday 11th March, 2026

There can be no bigger affront to Karl Marx’s legacy than the JVP’s claim that it espouses Marxism. Marx envisioned the creation of a future society free from exploitation. The latest fuel price hikes announced by the JVP-led NPP run counter to the Marxist principle of freedom from exploitation.

The sudden fuel price hikes, which have come close on the heels of the monthly fuel price revision announced on 28 February, cannot be considered legal, for they are not consistent with the Cabinet-approved fuel pricing formula. The government insisted during the recent panic buying and hoarding of fuel that the existing petroleum stocks were sufficient for more than one month, and there was no need for the public to queue up outside filling stations.

Chairman of the Ceylon Petroleum Corporation (CPC) D. J. Rajakaruna, flanked by Cabinet Spokesman Dr. Nalinda Jayatissa, gave an assurance, at a recent post-Cabinet media briefing, that the local fuel prices would not be increased in view of the global situation at least for another month or two. The fuel price revision on 28 February is proof that neither the CPC nor the Indian Oil Company (IOC) nor Sinopec purchased fuel at the current world market prices. Minister Jayatissa has reportedly claimed that fuel consumption has risen sharply over the past several days, leading to a drop in the existing reserves, and fuel had to be procured at higher global market prices. There is no way the government can justify jacking up fuel prices because the CPC prices revised on 28 February were cost reflective, and fuel stocks currently being released to the market were procured at much lower prices. Therefore, the latest fuel price increases are nothing but unfair and irrational. The motive of the government is to maximise profit at the expense of the public.

A CPC Director also made a vain attempt yesterday to justify the fuel price hikes. He said that by increasing the prices of the existing petroleum stocks, the government had sought to prevent a massive price hike upon the arrival of new fuel shipments. His flawed logic is an insult to the intelligence of the public. It is doubtful whether he was aware that oil had dropped to USD 90 per barrel from USD 119 per barrel in the world market overnight as US President Donald Trump predicted that his war with Iran was nearing its end, and G7 countries took steps to release strategic petroleum reserves to stabilise the market.

It is being argued in some quarters that fuel price increases will help reduce fuel consumption. There is no gainsaying that fuel consumption has to be curtailed during a global crisis, but that objective can be achieved with the help of QR-based fuel rationing. Huge increases in fuel prices are bound to push inflation up, with the prices of all essentials soaring. Private bus owners and trishaw operators have already demanded fare revisions. Even those who have no knowledge of Keynesian macroeconomic theory are familiar with the concept of sticky prices. Price increases are not followed by corrections in this country, and the Consumer Affairs Authority is a paper tiger.

The Opposition is of the view that the government has increased fuel prices to meet the cost of additional thermal power to be produced to overcome a generation shortfall caused by low-grade coal imports. This argument is tenable.

Meanwhile, fuel prices have an embedded debt-recovery levy that helps the CPC pass its legacy debt on to the public. This levy has enabled the IOC and Sinopec to make excessive profits, as they are not required to transfer the proceeds therefrom to the Treasury, according to a former petroleum minister. If so, the solution is to convert the debt-recovery levy into a special-purpose tax, which can be imposed on fuel marketed by IOC and Sinopec as well. It may also be possible to reduce the rate of the levy significantly by widening its application.

The unconscionable profits made from the sudden fuel price hikes are against the legal maxim that “no one should be enriched to the detriment of another”. The JVP-NPP government should be ashamed of fishing in troubled waters. It must stop exploiting the people who are struggling to make ends meet.

Tuesday 10th March, 2026

US President Donald Trump’s Epic Fury has left the world gnashing, with a global fuel shortage looming large. Oil prices have already surged past USD 100 a barrel amidst rising tensions in the Middle East. They are set to climb higher. The US-Israeli air strikes on Iran and retaliatory attacks are not likely to end any time soon. Both sides are targeting oil fields and storage facilities, sending shockwaves across the world.

Trump’s re-election led to euphoria in business circles, which mistakenly thought that he would not resort to anything that would adversely impact the global economy. But he has proved that he is not worried about the world economy at all. When Reuters recently asked him about the surging oil prices, he audaciously claimed: “They’ll drop very rapidly when this [the war on Iran] is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit.” Contrary to his prognosis, gasoline prices in the US rose from USD 2.92 a gallon, the lowest since 2020 to USD 3.40 a gallon. Trump’s plan to make short work of Iran has gone awry for all intents and purposes, and all signs are that the war will drag on indefinitely. It will be a huge gamble for the US to deploy ground troops in Iran. The Republican thinking, according to the likes of

hawkish Senator Lindsey Graham is now that Venezuela has fallen in line, the US may be able to gain control over about 30 percent of the global oil production if it defeats Iran and installs a puppet regime in Tehran. Hope is said to spring eternal.

Iran is apparently shifting the war to the economic front by closing the Strait of Hormuz, and doing everything possible to cause disruptions to the global oil supply. Worse, the intensifying conflict in the Middle East has raised significant concerns about a potential global recession due to energy supply shocks and crippled shipping routes. The region is a critical chokepoint, accounting for roughly 20% of global oil and liquefied natural gas shipments, and supply disruptions threaten to spike inflation and slow global growth.

Managing Director of the International Monetary Fund, Kristalina Georgieva, has warned about worldwide inflation risks arising from the conflict in the Middle East, pointing out that every 10% increase in oil prices, if sustained for most of the year, could lead to a 40-basis point rise in global inflation. This is an unnerving proposition, especially for vulnerable economies, such as Sri Lanka, which is emerging from a crippling economic crisis. The developing nations are without sufficient foreign currency reserves to withstand long-term shocks from a protracted Middle East conflict.

Bangladesh has reportedly been compelled to close its universities as part of a strategy to weather energy supply disruptions due to the Middle East conflagration and the closure of the Hormuz Strait. Other countries in this region and elsewhere may have to adopt such drastic measures to overcome possible fuel supply shortfalls. Bangladesh is reported to have posed daily limits on fuel sales due to panic buying and hoarding.

A trade unionist representing the Opposition in this country has warned of a possible fuel shortage despite the government’s assurances that there are sufficient petroleum stocks. He has urged the government to keep the public informed of fuel availability regularly. He may have issued that warning in good faith, but it is fraught with the danger of triggering another panic buying spree. It was with the greatest difficulty that the government brought fuel panic buying and hoarding under control a few days ago. Everyone ought to act responsibly at this juncture.

There is no need to hit the panic button yet, but urgent action is called for to prevent a possible fuel crisis. The available fuel stocks must be properly managed as the possibility of suppliers invoking the force majeure clause in agreements due to the worsening Middle East crisis and the resultant supply disruptions cannot be ruled out. It will be extremely difficult to replenish fuel supplies in such an eventuality. Prudence demands that the QR-based fuel distribution be reintroduced at the first sign of trouble. There’s no shame in rationing fuel during a global crisis.