Two reports just crossed on Iran:
1) A Fox News reporter says the US military carried out airstrikes today, hitting several empty tankers trying to break the US blockade of Iran. “These were Very Large Crude Carriers (VLCC) …. massive, empty ships trying to make it back to Iran … attempted to run the blockde…”
2) An explosion was heared in Iran’s Sirik, near the Straight of Hormuz
The US is insisting that the strikes earlier aren’t a resumption of Operation Epic Fury and don’t break the ceasefire. We’re also waiting for the latest Iran response to the latest US war proposal.
From what’s been reported, the sides still seem miles apart but the question is whether they can get close enough together to open up Hormuz and negotiate the rest of the issues. It’s tough to make a call as Trump seems to be trying to will a peace deal into existence, partly in order to calm markets.
Iran has repeatedly talked about the need for trust and I can’t imagine they’re feeling better about trust with more strikes. Hitting tankers with airstrikes is also not the kind of thing you do if you’re expecting a peace deal in the coming days.
WTI crude oil is up 39-cents to $95.20 today.
Bloomberg reports that state-owned Chinese oil firms have resold some of their oil cargoes to European and Asian rivals. That’s an odd move during a supply shortage. The shift has not only capped benchmark oil prices, but also triggered a trading premia collapse. It’s unclear if Chinese firms are just trying to capitalize on higher oil prices or they’ve been told to unload excess inventories ahead of an expected peace. Further, they could be simply trying to keep the global economy strong and build bridges with other countries.
Also just now, Iran’s Revolutionary Guard navy ordered vessels to maintain a minimum 10-mile distance from US warships in the Strait of Hormuz, threatening to deliver a lesson to the “Yankees” using missiles and drones. The directive came after overnight skirmishes and reports of heavy gunfire in the waterway. Vessel traffic through the Strait has dropped sharply, and the UK Maritime Trade Operations agency has designated the area as “high risk.”
Iran is expected to respond to the latest US proposal to end the war today but hasn’t yet.
