US and Iran Clash Near Hormuz Even as Both Tout Talks Progress
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US and Iranian forces clashed near the Strait of Hormuz overnight, highlighting the tension between the two sides even as they tout progress toward an interim peace deal.
After President Donald Trump announced Saturday that an Iran peace deal was within reach, “hawkish Republicans” targeted the president with a campaign designed to convince him he would "look foolish and weak" for pursuing it – a pressure campaign that appears to have worked following fresh U.S. strikes on Iran Monday, Zeteo reported Tuesday.“Two sources with knowledge of the situation told [Zeteo] that hawkish Republicans flagged for the White House media coverage, social media posts, and other material arguing that reported peace terms would hand the Iranians victory and make Trump look foolish and weak,” Zeteo’s Martin Pengelly wrote in the outlet’s report. “And then came the apparently inevitable news: reports of renewed violence. And so, Trump’s Iran fiasco continues.”Trump’s announcement on Saturday was met with a wave of criticism from right-wing figures, with the president lashing out at said critics on Sunday as “losers” who knew “nothing” about the ongoing negotiations. Whether motivated by the “extreme internal pressure” he’s reportedly under or other factors, Trump did ultimately authorize strikes on targets in southern Iran on Monday, sinking two boats and attacking a missile launch site.Bloomberg has previously reported that the president has also been under extreme “outside” pressure to resume the Iran war as well, notably from Israeli Prime Minister Benjamin Netanyahu and billionaire media mogul Rupert Murdoch.
Trump said he would be “mandatorily requesting” several Muslim nations sign the Abraham Accords and recognize Israel as part of any peace deal with Iran.
This will be the most important Deal that any of these Great, but always in Conflict Countries, will ever sign. Nothing in the past, or in the future, will surpass it.
With a U.S.-Iran deal (maybe?) taking shape in coming days, the oil market that follows will look different than what preceded the war.Why it matters: The emerging deal — which would re-open the Strait of Hormuz while nuclear talks proceed — could return large amounts of barrels to the market.It's not a moment too soon as global oil stockpiles, which have somewhat tempered the crisis, are drawn down at record pace.Reality check: Things won't be normal for a long time, and the postwar definition of normal is fluid, too.A few near-term and long-term things to watch...😨 Confidence: In the near term, "It's all about whether vessel owners and crews feel safe transiting the Strait of Hormuz," said oil analyst Ben Cahill of UT-Austin.He notes confusion about whether Iran will imposes some kind of fees, safety, insurance rates and more."It could be a stop-and-start process as risk-averse shippers work through these uncertainties," he tells me via email.🕰️ Timelines: "Following the clearance of any mines, a minimum of two to three months will likely be required to re‑establish steady export operations," the International Energy Agency said in its mid-May oil market report.And Persian Gulf countries need time to resume production that declined after the main export route was cut off.📜 Definitions: What "open" means for the world's most important energy shipping lane is unsettled.Iran may not call it a toll, but Iranian officials are floating new fees on tankers.This could be a boon to Iran even if the fee is relatively small, said Edward Fishman, a former State Department aide now with the Council on Foreign Relations.Fishman — speaking on oil analyst Rory Johnston's essential Oil Ground Up podcast — sees vessels paying tens of billions of dollars per year, even $100 billion."If you look at it from the perspective of market participants, whether it's oil traders or shippers, even if you're paying $2 million a pop for a VLCC [Very Large Crude Carrier], that's $1 a barrel, that's actually not that economically significant," he said."I think that the private sector, if this is the cost of getting ships through the Strait, is going to pay the toll," he said.⚠️ Vibes and market risk: Before the crisis that throttled supplies, there was debate in oil circles about whether markets were blasé about threats to infrastructure or shipping.Even once the current crisis is in the rearview, watch the level of "geopolitical risk premium" — the market's willingness to preemptively price in risk — that elevates prices.It could be higher now, especially with Iran's newly assertive posture in the Strait."There will be a permanent price premium attached to a permanently more risky operating environment," Clayton Seigle, an oil analyst withe Center for Strategic and International Studies, said via email.🚧 Pipeline infrastructure: There are already efforts to at least somewhat ease the Strait's importance by building pipelines to bypass it.The United Arab Emirates said in mid-May that it's speeding construction of a major pipeline that will double its export capacity through the port of Fujairah. CNBC has more.🇺🇸 U.S. oil production: Higher prices are likely to encourage producers to boost their output as they see opportunities from a market that went from soft to tight.Before the war, the U.S. Energy Information Administration projected domestic production dipping from 13.6 million barrels per day this year to 13.3 million barrels per day in 2027.Its latest outlook, in mid-May, now sees production rising to 14.1 million next year.Publicly listed U.S. shale producers have increased 2026 capital spending plans by $490 million compared to pre-war guidance, the energy research and consulting firm Enverus tells the FT.
Global prices are approaching a tipping point that could trigger inflation, shortages and, over time, recessionIf a US-Iran deal is about to be reached, three months on from the launch of Donald Trump’s Operation Epic Fury, it will not be a day too soon for oil markets, which are approaching a dangerous tipping point.The cost of a barrel of crude on the spot market – for immediate purchase, effectively – has bounced about $100 since Iran predictably responded to the onslaught from the US and Israel by closing the strait of Hormuz. Continue reading...
Vote is latest test of President’s grip over party and ability to punish Republicans he sees as insufficiently loyalHello and welcome to the US politics live blog.Texans are voting for a Republican nominee for US Senate in Tuesday’s runoff election, following Donald Trump’s late bid to influence the race in his latest effort to rid the GOP of less devoted leaders.Iran has poured cold water on suggestions that a deal with the US is imminent, pointing to the confusion in US positions and Israeli interference as reasons why an agreement is proving difficult to secure. Speaking at the weekly foreign ministry press briefing, Esmail Baghaei, the spokesperson for Iran’s negotiating team, also said future management of the strait of Hormuz was a matter for Oman and Iran to agree on, and that it was not tolls that were being proposed but “fees for navigational services”.By contrast, the US secretary of state, Marco Rubio, said that a deal was still possible, adding that the strait of Hormuz would open “one way or another”. “There were some talks going on in Qatar today, so we’ll see if we can make progress. I think it’s a lot of talking back and forth going on about specific language in the initial document,” Rubio told reporters in Jaipur during an official visit to India.A Trump Tower planned for the Georgian capital, Tbilisi, is to be built on land currently part-owned by the son of the US-sanctioned leader of the country, according to official records. The proposed skyscraper, a joint venture between a local consortium and the Trump Organization, which is managed by the US president’s sons, Donald Trump Jr and Eric Trump, will be on a plot whose current registered owner is the International Charity Fund Cartu.Mexico’s president, Claudia Sheinbaum, said on Monday her government agreed to allow the Iranian national football team to stay in Mexico during the World Cup, adding that the United States did not want to host the team. Sheinbaum said football’s governing body Fifa approached her government after the US said it did not want Iran’s squad to stay in the country throughout the tournament, despite Iran playing all three of its group matches there. Continue reading...
U.S. Central Command (Centcom) on Monday said U.S. forces fired “defensive strikes” in southern Iran amid discussions to bring the U.S.-Israeli conflict with Tehran to an end. These strikes were intended “to protect our troops from threats posed by Iranian forces” — specifically boats attempting to lay mines and missile launch sites, Navy Capt. Tim…
