Simon Harvey

Good morning from Dubai 51 days since the Iran war started - Chaos on the Strait. It’s not open. Vessels are u-turning and there have been reported incidents of gunfire - Late Saturday, Iran’s Parliament Speaker Mohammad Ghalibaf said a continued US naval blockade is the reason behind restricted transit through the Hormuz - WSJ reporting that the US military is preparing to board Iran-linked oil tankers and seize commercial ships in international waters in coming days - Lebanon ceasefire is fraying: On Saturday, Israel struck what it called a “terrorist cell” in south Lebanon. President Emmanuel Macron also said a French soldier was killed in an attack on UN peacekeepers in Lebanon and suggested Hezbollah was to blame. Hezbollah have denied. Pro-Hezbollah groups continue to criticize Lebanese government decision to engage in direct talks with Israel. - no confirmation of round 2 of Iran US talks though intense Pakistani mediation efforts continue - Iran’s FM spokesman told state television that enriched uranium “is as sacred to us as Iran’s soil, and it won’t be transferred anywhere under any circumstances.”

Iran is broadcasting this VHF message to ships: "Attention all ships, ​regarding the failure ⁠of the U.S. government to fulfil its commitment in the negotiation, Iran declares the Strait of Hormuz completely ​closed again. No vessel of any type or nationality ​is allowed ⁠to pass through the Strait of Hormuz.” - Reuters

Schrödinger's Strait! Current state of play means a reopening, return to lock-in, and a resumption of kinetic warfare are all on the table for Monday's open.

Everyone tried to exit and got fkn blocked by the IRGC. Good god.

More than oil, the chart below is crucial for the ECB / BoE. The cost of natural gas (and with it, electricity) is back to pre-war levels; lower than it was in 1Q 2025.

@MrMBrown Lunch time pints, lovely!

Weekend. 🍻

@ClausVistesen Question is, what publicly listed company benefits from new pipelines 😉

@_SimonHarvey Exactly, t was always unsustainable to expect the US navy to sit around there and make a difference for any length of time ... the Strait has been semi-militarised ... time to diversify.

*IRAN TO CLOSE STRAIT OF HORMUZ IF US BLOCKADE PERSISTS: FARS To my point...the Iranian's have shown Trump the "win" he craves in the stock market, and one he has already started to claim, meaning the US is stuck at the negotiating table.

@ClausVistesen And here we know he is constrained by mid-terms, markets etc etc. Claim the “win”, move on. For Gulf states, bitter pill to swallow, but time to diversify export infrastructure and spend on regional defense - US shield has been exposed.

@ClausVistesen Yeah I think they open, the market pressure is too much and as you say he needs this. If Iran requires reparations via “dust” money or tolls, so be it, the cost of ravaging war and you can just find ways around anyway. If this doesn’t work, he gets dragged into war of attrition.

Congratulations to the Islamic Republic of Iran for understanding game theory. Eventually, you have to cash in on your leverage. Otherwise, it can be lost.

Iran reopening the Strait on the condition the ceasefire is upheld puts pressure back on the US, knowing how much the Trump administration likes to tout stock market gains and will now be at pains to re-escalate.

In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran.

So we're all scooping up European industrials?

*ARAGHCHI: PASSAGE FOR ALL COMMERCIAL SHIPS THROUGH HORMUZ OPEN Axios also reporting US-Iran talks to resume Sunday. The reopening of the Strait, even at a cost, and a ceasefire extension were the requirements for stocks to climb further, and now you have it.

China buys oil. The US steals oil. The US threatens to sanction China because China doesn’t want to be a part of American terrorism. They are crazy.

3% is the new 2%.

With energy markets starting to stabilise, albeit at higher levels than pre-war, this has enabled BoE policymakers to turn more prudent in their messaging on rate hikes (Mann, then Greene and Bailey), even as a stronger growth rate prior to the shock suggests otherwise.

Two mitigating factors when considering today's "strong" UK Feb GDP growth number: 1) GDP level revised down to Jan (~-0.15pp) 2) Seasonality continues to give a false dawn effect

@MrMBrown In fairness, the FX market never really got going to begin with

JPM's metric of G7 FX implied vol now sits at its lowest since late-Jan...not only the stock market that's moving past geopolitical events...