By Michael Every of Rabobank
In response to Iranian strikes on ships using the Omani route in Hormuz, the US has struck Iranian air defense, missile, and drone sites in the Strait and suspended its oil sanctions waiver. These are clear breaches of the MoU, and we will now see if Iran escalates --it says it will take “decisive” action-- with the risk of war if the US is also prepared to go that route. We suspect the US will try to step back for now. Even so, it should be clear why our base case is that more war is likely after the midterms. Obviously, oil prices are up today on this news; but crack spreads are already so wide that hardly matters.
Elsewhere in the Middle East, Secretary of War Hegseth is to visit Israel today as PM Netanyahu reiterates that he and Trump align on ”the big things” over Iran; bomb attacks rocked Damascus as France’s Macron visited; Lebanon’s president is to get his first White House visit; and the FT reports Saudi Arabia is blocking private sector payments to Dubai – a sign of rising tensions between those two GCC economies.
At the Ankara NATO summit, Trump struck a friendlier tone towards Turkey than many in Europe, removed sanctions over its purchase of the S-400 Russian antiaircraft system, and saying he’ll “certainly consider” selling them F-35s – setting off alarms in Jerusalem and Athens.
The summit has already seen Secretary General Rutte say, “READ MORE AT SOURCE »
« Back to The Culture War
