Iran War Costs U.S. $11 Billion in First Six Days

Posted on March 12, 2026 by Ignacio Teson

The war involving the United States and Iran cost more than $11.3 billion in its first six days, according to officials from the United States Department of Defense, commonly known as the Pentagon.

The US military may be ending the fight in Iran soon, and investors are hopeful.

Sources close to United States Congress said the estimate was shared with lawmakers during a closed-door briefing at the United States Capitol on Tuesday. Three people familiar with the meeting confirmed the figure.

However, the estimate does not include several operational costs, such as the buildup of military equipment and personnel before the first strikes. Lawmakers therefore expect the total cost to rise significantly as the conflict continues.

Other estimates of the war’s cost

While the Pentagon’s figure is considered the most official estimate so far, other institutions have produced their own calculations.

The Center for Strategic and International Studies estimated that the first 100 hours of the operation cost about $3.7 billion, or roughly $891.4 million per day. The think tank expects the daily cost to decline over time as the U.S. shifts to less expensive munitions and as Iranian drone and missile attacks decrease.

In line with that approach, the U.S. military has announced plans to rely more heavily on Joint Direct Attack Munition bombs, which are significantly cheaper than some of the precision weapons used at the start of the conflict.

This strategy contrasts with the position of Mitch McConnell, the senator from Kentucky who chairs the Senate subcommittee responsible for Pentagon funding and has repeatedly urged the U.S. government to increase spending on ammunition production.

Meanwhile, reports by The New York Times and The Washington Post cited defense officials telling Congress that the U.S. military spent $5.6 billion on munitions in just the first two days of the war.

Morgan Stanley Expects Fed to Delay Rate Cuts Amid Oil Shock

Posted on March 12, 2026 by Ignacio Teson

Morgan Stanley expects the Federal Reserve to delay the start of its interest-rate cutting cycle as the surge in oil prices triggered by the conflict with Iran adds new uncertainty to the inflation outlook.

The bank still forecasts two quarter-point rate cuts in 2026, likely at the Fed’s June and September meetings, but warns that the recent energy shock could push the timeline back. Under that scenario, the first cut could be postponed until September or even December, with the following move potentially slipping into 2027.

“If the Fed follows its historical behavior and chooses to look through oil-driven inflation pressures, we believe it could still begin easing sooner than the market currently expects,” said Michael Gapen in a report published Wednesday.

Oil shock complicates the outlook

The conflict involving the United States, Israel, and Iran has driven a sharp increase in oil prices and rattled financial markets, raising doubts about the timing of rate cuts.

For now, futures markets are pricing in only one 25-basis-point rate reduction this year, likely around the October meeting.

Although Donald Trump recently said the conflict could end “soon,” and the International Energy Agency announced an extraordinary release of 400 million barrels from strategic reserves, crude prices remain elevated. Brent Crude is trading around $90 per barrel, well above the roughly $70 level seen before the conflict began.

Inflation risks remain

According to Morgan Stanley, if oil prices fail to return to pre-war levels, the impact on headline inflation could become more pronounced in 2026. The bank also expects the U.S. unemployment rate to remain moderately higher through late 2028.

In that scenario, the Federal Reserve may need to balance its dual mandate—controlling inflation while supporting employment—while maintaining a more cautious and flexible monetary policy stance.

For the bank’s economists, current market pricing largely reflects uncertainty about the duration of the conflict and the difficulty of predicting how the Fed will respond until there is greater clarity in both economic data and geopolitical developments.

Mexican Peso Falls Against Safe-Haven Dollar as Oil Prices Surge

Posted on March 12, 2026 by Ignacio Teson

The Mexican peso weakened against the US dollar in midweek trading as markets turned more cautious amid the war in the Middle East and Iran’s blockade of the Strait of Hormuz, a key chokepoint for global oil shipments.

The exchange rate closed the session at 17.6698 pesos per dollar, compared with 17.5903 the previous day, according to official data from Bank of Mexico. The move represented a loss of 7.95 centavos, or 0.45%, for the Mexican currency.

During the session, the dollar traded in a range between 17.7098 and 17.5273 pesos. Meanwhile, the US Dollar Index, which tracks the greenback against a basket of major currencies and is calculated by Intercontinental Exchange, rose 0.35% to 99.28 points.

[[USD/MXN-graph]]

Oil prices back in focus

Iranian forces continue to maintain a blockade in the Strait of Hormuz, a strategic passage for global crude flows. Iranian officials warned that oil prices could climb to $200 per barrel if the United States does not halt hostilities.

The US dollar strengthened as a safe-haven asset, as markets increasingly doubt the projection by Donald Trump that the conflict could end sooner than expected.

At the same time, West Texas Intermediate crude rose nearly 6% to $88.42 per barrel, highlighting the growing pressure in global energy markets.

The exchange rate was also pressured by uncertainty in the energy sector following the closure of the Strait of Hormuz. Technically, analysts point to support around 17.50 pesos per dollar and short-term resistance near 17.70.

Inflation concerns in the U.S.

In the United States, the Consumer Price Index remained stable last month, with annual inflation at 2.4%, in line with expectations.

However, the data still does not reflect the potential impact of the war with Iran, meaning inflation could accelerate in March if energy prices continue rising.

Oil Heats Up: Brent Approaches $100 Again

Posted on March 12, 2026 by Ignacio Teson

Crude oil prices surged again on Wednesday evening in international markets amid escalating geopolitical tensions in the Middle East and growing fears of disruptions to global supply.

The price of Brent Crude rose 6.75% to $99.28 per barrel, while West Texas Intermediate (WTI) climbed 7.6% to $93.88, bringing both benchmarks close to their highest levels of the past year.

The rally came despite an announcement from the United States that it will release 172 million barrels from its Strategic Petroleum Reserve in an effort to stabilize global oil supply.

The decision is part of a coordinated effort among members of the International Energy Agency, which agreed to release up to 400 million barrels collectively to offset potential supply disruptions, particularly following the effective closure of the Strait of Hormuz, one of the world’s most critical energy corridors.

U.S. Energy Secretary Chris Wright confirmed that President Donald Trump authorized the release beginning next week. According to Wright, the drawdown will occur gradually over roughly 120 days.

[[USOIL-graph]]

The announced volume represents a significant portion of the U.S. reserve, which currently holds about 415 million barrels.

Wright also said the plan includes replenishing roughly 200 million barrels next year to rebuild part of the released stockpile, stressing that the operation will not impose additional costs on taxpayers.

However, the announcement failed to calm energy markets, which continue to reflect investor concerns about the potential impact of the Middle East conflict on global crude supplies.

Iran warns oil could reach $200

Officials in Iran warned that oil prices cannot be contained through what they called “artificial measures,” following the record release of strategic reserves coordinated by the IEA.

The warning came from Ebrahim Zolfagari, spokesperson for the Khatam al-Anbia Central Headquarters, the body coordinating operations between Iran’s regular army and the Islamic Revolutionary Guard Corps.

Zolfagari said the price of crude could climb as high as $200 per barrel if security conditions in the region continue to deteriorate.

“With the expansion of the war, you can expect a $200 barrel of oil. Oil prices depend on regional security, and you are the source of that insecurity,” he said in a video distributed by the state news agency Tasnim News Agency, referring to the conflict with the United States and Israel.

He also warned that Iran will not allow “a single liter of oil” to pass through the Strait of Hormuz for the benefit of Washington, Tel Aviv, or their allies, underscoring the growing military tensions in the region.

Goldman Sachs Forecasts “Extreme” Rebound in U.S. Stocks

Posted on March 11, 2026 by Ignacio Teson

According to Goldman Sachs, the current positioning of investors on S&P 500–linked markets could trigger an “extreme” upward move in U.S. equities if positive news emerges on the macroeconomic or geopolitical front.

John Flood, one of the bank’s leading trading specialists, warned that markets are currently navigating a period of heightened uncertainty driven by factors such as tensions in the Middle East, credit concerns, and questions about the economic impact of artificial intelligence.

Against this backdrop, many hedge funds have adopted defensive strategies that could end up amplifying market movements.

Why Goldman Sachs sees upside risk for equities

According to data from the bank’s prime brokerage team, hedge funds remain bullish on individual stocks but have simultaneously increased bearish hedges by shorting macro instruments such as exchange-traded funds and stock index futures.

Short positioning in these broad market instruments has reached its highest level since September 2022.

This positioning reflects investor caution amid global uncertainty. However, it also creates a potentially explosive scenario: if a favorable headline appears—such as geopolitical de-escalation—many traders could be forced to quickly close their short positions, triggering a sharp rally in stock indexes.

Flood noted that a positive development, such as signs of a resolution to the conflict with Iran, could drive an immediate 2% to 3% jump in equity indexes, largely fueled by short covering in macro products.

Goldman Sachs also highlighted that total hedge fund exposure—a metric combining long and short positions—is close to record levels at around 307%, suggesting that markets are highly leveraged and sensitive to shifts in investor sentiment.

A market with limited liquidity

Another factor that could magnify market swings is declining liquidity.

While daily trading volumes exceed 20 billion shares, overall market depth has fallen significantly. In S&P 500 futures, the volume available at the best bid-ask levels is currently around $4 million, well below the historical average of roughly $14 million.

According to Flood, the combination of high leverage and thinner liquidity means that even a single institutional trade can cause sharper price fluctuations.

For now, many traditional asset managers remain cautious and prefer to wait for greater clarity on the macroeconomic outlook. Still, the strategist noted that markets are hoping for signs of easing geopolitical tensions in the coming weeks.

Two Major U.S. Oil Companies Near Deal with Venezuela

Posted on March 11, 2026 by Ignacio Teson

Chevron and Shell move closer to securing rights to develop oil- and gas-rich areas as they seek to expand production. The potential deals come amid growing pressure on the global hydrocarbons market.

Chevron and Shell are close to signing the first major oil production agreements with Venezuela since the United States captured former leader Nicolás Maduro on January 3. The partnerships would allow the oil majors to explore highly sought-after areas within the country, at a time when tensions in the Middle East are disrupting global energy trade.

The talks follow a sweeping reform of Venezuela’s main hydrocarbons law, approved by the National Assembly in late January. The legislation grants foreign companies greater autonomy to operate, export, and sell Venezuelan crude—even if they hold minority stakes in the state-owned oil company PDVSA.

In February, Venezuela launched a review of all oil and gas projects in the country. Officials from the Ministry of Petroleum warned energy executives that contracts could be revoked for projects that remain inactive or fail to meet investment commitments.

Chevron and Shell move toward an agreement

Chevron and Venezuelan energy authorities have agreed on terms to expand the company’s largest project in the country, Petropiar, located in the Orinoco Belt. The deal would also grant production rights over the Ayacucho 8 block, south of the existing project area. If finalized, it would become Chevron’s fifth oil block in Venezuela and could make the company the largest private producer in the Orinoco region, which holds more than three-quarters of the country’s crude reserves.

Last month, Chevron and PDVSA produced roughly 90,000 barrels per day of upgraded Hamaca crude and 20,000 barrels per day of vacuum gas oil at the Petropiar facility.

Meanwhile, Shell is also advancing preliminary oil and gas agreements during the visit of U.S. Interior Secretary Doug Burgum to Caracas. According to Reuters, the company is seeking to develop the Carito and Pirital fields in the northern Monagas region, a prized area in eastern Venezuela.

These fields can produce light and medium crude as well as natural gas—both valuable resources that are relatively scarce in Venezuela’s heavily weighted portfolio of extra-heavy oil.

The Punta de Mata area, which includes Pirital, Carito, and the nearby El Furrial field, produced around 94,000 barrels per day of crude and about 1.03 billion cubic feet of natural gas per day last month, according to independent estimates. Of that volume, roughly 350 million cubic feet per day was flared.

Calm Returns to Global Markets as Oil Plunges

Posted on March 11, 2026 by Ignacio Teson

U.S. stocks closed with slight moves on Tuesday while oil prices dropped sharply, following the extreme volatility seen since the start of the conflict involving Iran.

The S&P 500 slipped 0.2%, a day after reversing early losses to finish with solid gains. The Dow Jones Industrial Average edged down 0.1%, while the Nasdaq Composite was virtually unchanged, rising just 0.01%.

[[SPX-graph]]

Calm also returned to the oil market, which had been the main source of tension for financial markets due to fears of long-term supply disruptions linked to the conflict.

The international benchmark Brent Crude closed at $91.42 per barrel, 7.6% lower than its previous close, though much of that decline occurred before the end of Monday’s session. Meanwhile, West Texas Intermediate, the U.S. benchmark, traded around $88.57 per barrel.

Oil prices had plunged on Monday after reaching nearly $120 per barrel, their highest level since 2022, following comments from Donald Trump, who told CBS News that he believed “the war is very complete, practically.” The remarks fueled hopes that the conflict could end sooner than expected, allowing oil flows from the Middle East to normalize.

However, later comments from Trump were less clear about when the war might end. Meanwhile, Ali Mohammad Naini, a spokesperson for Islamic Revolutionary Guard Corps, said that Iran would determine when the war concludes. Iran launched new attacks on Tuesday against Israel and several Gulf Arab countries, keeping pressure on the region in a conflict initiated by Israel and the United States.

[[USOIL-graph]]

This uncertainty has left Wall Street waiting for clearer signals about the war’s duration. One point Trump emphasized was his determination to keep the Strait of Hormuz open. The conflict has caused disruptions in the strait off Iran’s coast, a passage through which roughly one-fifth of the world’s oil supply flows—one of the key drivers behind recent oil price swings.

In the bond market, the yield on the U.S. 10‑Year Treasury Note eased slightly to 4.11%, from 4.12% late Monday.

In Asia, investors also digested a series of positive macroeconomic indicators. China reported a record trade surplus of $213.62 billion for the combined period of January and February, far exceeding the $179.6 billion expected by the market.

Mexican Peso Gains Against Dollar on Expectations About Iran War Duration

Posted on March 10, 2026 by Ignacio Teson

The Mexican peso gained ground against the United States dollar on Tuesday, supported by improved market sentiment and extending the previous session’s rebound after comments from U.S. President Donald Trump regarding Iran.

The exchange rate closed the session at 17.5903 pesos per dollar. Compared with Monday’s close of 17.6711, according to official data from the Banco de México, the move represented an appreciation of 8.08 centavos, or 0.46%, for the Mexican currency.

During the session, the dollar traded within a range between 17.6993 and 17.4511 pesos. Meanwhile, the U.S. Dollar Index (DXY), which tracks the dollar against six major currencies, rose 0.21% to 98.94 points.

[[USD/MXN-graph]]

Higher risk appetite

Trump said on Monday that the war had already inflicted severe damage on Iran and predicted that the conflict could end earlier than the four weeks initially expected. Until now, the hostilities had been pushing oil prices higher and raising concerns about the global economy.

Analysts noted that the de-escalation narrative promoted by Trump, along with the Group of Seven willingness to release oil reserves, triggered a sharp drop in crude prices and contributed to a broader weakening of the dollar.

However, the rhetoric contrasts with developments on the ground in Iran, which experienced its most intense day of bombings since the war began more than a week ago. Iranian authorities have threatened to block oil shipments from the Middle East until U.S. attacks cease.

Oil remains the main source of tension for global markets, particularly due to risks to supply and to shipping flows through the Strait of Hormuz, a critical route for global crude trade.

Key data ahead

For Wednesday, investors will continue to monitor headlines about the conflict, but economic data will also take center stage with the release of the U.S. inflation report, a key indicator for the future path of interest rates set by the Federal Reserve.

China Bets on AI to Create Jobs and “Rejuvenate” its Economy

Posted on March 10, 2026 by Ignacio Teson

China is pushing the large-scale adoption of Artificial Intelligence as a central pillar of its economic agenda for the next five years, hoping the technology will offset the aging of its workforce and reverse the country’s long-term slowdown. The initiative comes as Beijing sets its lowest growth target since 1991.

The strategy was unveiled at the opening session of the National People’s Congress, where the government outlined plans to harness what it described as AI’s “job-creation effect.”

China’s Minister of Human Resources, Wang Xiaoping, said the country is working to “actively leverage” AI to create new jobs and expand employment opportunities for the 12.7 million university graduates expected to enter the labor market this year.

Rising youth unemployment

However, the government’s optimism contrasts with warnings from international institutions and academic research. The International Monetary Fund estimates that AI could affect about 40% of jobs worldwide, a figure that rises to 60% in advanced economies.

Similarly, researchers from Stanford University have identified a “significant and disproportionate” impact on workers just entering the U.S. labor market — a concern that recently echoed across Wall Street.

These concerns are particularly relevant given China’s challenging macroeconomic backdrop. The country has set a GDP growth target between 4.5% and 5%, the lowest since 1991, while youth unemployment remains elevated. At the same time, roughly 300 million people are expected to retire over the next decade, putting additional pressure on the pension system.

Industrial transformation and university reform

During the parliamentary sessions, executives from state-owned enterprises — historically associated with job stability — acknowledged that AI will drive significant internal restructuring.

Zhu Huarong, chairman of Changan Automobile, expressed optimism, predicting that technological expansion will transform the automotive industry into a “booming sector,” reversing its current decline.

In education, Chinese universities are already adapting their curricula. ShanghaiTech University has launched AI-focused “micro-specializations” aimed at developing skills that are harder to automate, including interdisciplinary learning, critical thinking, and creativity.

“We must train them to ask questions. If your thinking is not sharp, you won’t beat the robots,” said the university’s president, Yin Jie.

Paraguay to Launch State-Run Bitcoin Mining Using Seized Equipment

Posted on March 10, 2026 by Ignacio Teson

State-owned utility Administración Nacional de Electricidad (ANDE) has signed an agreement with Morphware to put 30,000 confiscated mining machines into operation. The initiative aims to monetize excess electricity from the Itaipu Dam and turn electricity theft into public revenue.

Mining activity from state-run companies is on the rise.

In an unprecedented move for public administration in South America, Paraguay is moving toward becoming the first country in the region to operate a state-managed mining infrastructure for Bitcoin. The initiative, led by ANDE, involves repurposing thousands of mining devices seized during crackdowns on illegal crypto mining farms.

Through a memorandum of understanding (MOU) with Morphware, the Paraguayan government plans to give productive use to roughly 30,000 processing units that had been sitting idle in government warehouses after being confiscated for operating illegally or through electricity theft.

Itaipú’s energy surplus as an economic driver

Paraguay’s strategy relies on its strongest competitive advantage: abundant and inexpensive hydroelectric energy generated by the Itaipú Dam. Historically, the country has exported much of its excess electricity at relatively low prices. Now, ANDE plans to redirect that underutilized power toward digital asset mining in order to capture more value domestically.

The pilot program includes several stages:

Initial phase: Installation of 1,500 units at ANDE-controlled sites located near electrical substations.
Infrastructure upgrades: Adaptation of facilities with ventilation systems, transformers, and high-precision metering equipment.
State oversight: ANDE will retain ownership and regulatory control of the facilities, while Morphware will provide technical guidance and staff training.

From illegal activity to state-run industry

Kenso Trabing, CEO of Morphware, described the agreement as a “transformational opportunity” for the country. By deploying the machines in regulated sites, Paraguay aims to convert a security problem—electricity theft by illegal miners—into a legitimate source of revenue.

“Unused electricity becomes income for Paraguay, serving both the Bitcoin network and the global AI economy,” the executive said.

If the pilot proves successful, it could pave the way for future expansions financed through financial products tied to Bitcoin production or artificial intelligence applications.

What happens to the mined assets?

Although no specific timeline has been announced for the start of operations, discussions within the Paraguayan government are focusing on how to manage the potential proceeds. Two main options are being considered:

Direct sale: Selling the mined bitcoins to finance public spending.
Strategic reserve: Holding part of the assets as a hedge against financial risks and to diversify national reserves.