Question for those who think Trump will TACO on Iran: what exactly does that look like? Declare victory and pull out? Then what? Iran walks away with de facto control over the Strait of Hormuz — the world’s most important energy chokepoint. That is not peace. That is Tehran holding a veto over the global economy. They would have the power to disrupt flows, keep oil prices elevated, punish the West, and extract concessions. And once you TACO under those conditions, the risk of a wider regional war probably goes up, not down, because Iran’s neighbors will not accept that new reality. If you want markets to recover and crude to settle down, the answer is not a face-saving exit. It is taking away Iran’s ability to coerce traffic through Hormuz. Until that changes, the risk premium stays.
