Marginal Thinking

An Iranian official has spoken to Reuters regarding the potential interim deal with the US, indicating some of what has been agreed to, including: -Fully opening the Strait of Hormuz immediately -U.S. to lift naval blockade within 30 days -No new sanctions imposed while negotiations continue -The U.S. will suspend current sanctions, allowing Iranian oil to be openly sold -$25 billion in Iranian assets to be unfrozen, including direct cash transfers -Formation of an economic development and reconstruction plan -Iran agrees it will neither produce nor acquire nuclear weapons -Fate of the nuclear program, including stockpile of highly enriched uranium, to be negotiated and finalized within 60 days -Full sanctions relief following a final agreement in 60 days

📉 JPMorgan: “Schrödinger’s Strait” Is Both Open and Closed In a new note, JPMorgan’s commodities team says the Strait of Hormuz exists in a paradox, simultaneously “open” and “closed,” much like the cat in the famous thought experiment. Since March 1, the strait has been seen as effectively closed, with commercial shipping disrupted, insurers withdrawing coverage, tanker traffic collapsing, and Persian Gulf exports falling sharply. Yet oil is quietly finding its way out. The bank estimates flows are recovering, but still far from normal: 🔸 JPMorgan estimates oil flows through Hormuz are running at 5.1 million barrels per day in June, up from 2.9 mb/d in May, but still only about 25% of pre-war levels. 🔸 Total Persian Gulf exports reached nearly 8.9 mb/d, the highest since the war began, as oil increasingly finds alternative routes out of the Gulf, though that remains well below the 2025 baseline of 18.8 mb/d. 🔸 Roughly 0.8 mb/d is labeled as Iranian crude, but JPMorgan says those cargoes appear to pause in Omani waters and may not represent “true” Hormuz transits, likely turning back under the U.S. Navy blockade. JPMorgan’s Natasha Kaneva writes that the box (the Strait) is “starting to creak open,” but with flows still at only about a quarter of pre-war levels, it cautions against interpreting the recent rebound as a return to normal.

Lost in the noise about deal terms, and the underappreciation of the current level of U.S. leverage, is the most important piece of context: President Trump has achieved what 45 years of U.S. policy could not. The regime's military leadership is decimated, its economy is in freefall, and it is diplomatically isolated more than ever. Just a couple years ago Iran was building drone manufacturing in the U.S. backyard, Venezuela.

(Reuters) - Roughly 7 million barrels a day of oil are getting ​out of the Persian Gulf with U.S. military ‌help, Energy Secretary Chris Wright said on Friday at an event in Houston.

Reuters: The United Arab Emirates has agreed to unlock billions of dollars for Iran, four sources said, ​in a tactical shift after weeks of Iranian attacks on the wealthy Gulf Arab state. Sources claim the total funds involved are between $10-20 billion with the first tranche of 3$ billion already been made available in return for an end of Iranian attacks on the UAE.