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Iran War: Omani Route Tests Iran Control of Strait of Hormuz as Rubio, GCC States Reject Iran Management; Iran Yet to Respond to Israel Ceasefire Violations, Intent to Stay in Lebanon; More Doubts About $300 Billion Fund

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[Today’s Iran war post fired before finished. Please return at 8:00 AM EDT for a completed version]

Iran is facing a test of its skill and resolve. It is now an open question as to whether Iran will be able to assert control over the Strait of Hormuz in peacetime conditions. We pointed out repeatedly that Oman, unlike Iran, was a signatory to UNCLOS, which binds Oman to allowing transit of vessels through its territorial waters to states beyond. We noted that Oman had publicly remained silent in the face of repeated statements of Iran intent, and some outreach, of the Iran plan that Iran and Oman would manage the Strait of Hormuz.

If Oman does not cooperate, and it is not cooperating, it fatally undermines Iran’s ongoing leverage. Oman does not house US airbases its pointed neutrality meant Iran did not target Oman during the war. So unless the war heats back up, it is not clear how Iran could exploit that to interfere with vessels in Oman waters.

Recall that on June 24, Oman announced the establishment of a shipping transit corridor in the Strait of Hormuz, in coordination with the International Maritime Organization, as in not with Iran.

Oman has affirmed its implicit position:

A confirmation of what we have worked out:

Note the umbrage at the idea of establishing a new Strait of Hormuz regime. From Aljazeera’s live feed:

Arab Gulf states reject ‘new geopolitical facts’ born from aggression: UAE presidential adviser

New “geopolitical facts” cannot be imposed on the Arab Gulf states as a result of a “treacherous aggression against them”, the UAE’s presidential adviser Anwar Gargash says.

The Oman side is a viable traffic route:

And:

I have seen comments in Twitter which I have not attempted to verify, that very large crude carriers cannot use the Omani side because it is too shallow. But the fallback is to load fuel onto smaller carriers and transfer it to bigger ships, either at sea or in a nearby port.

Per Iran International, Oman has rejected transit fees:

Oman said future arrangements for the Strait of Hormuz would not include transit fees, as it backed a memorandum of understanding between the United States and Iran.

Oman’s foreign minister made the remarks at a joint ministerial meeting between the Gulf Cooperation Council and the United States in Bahrain, Oman News Agency said.

He said Oman, as a state bordering the Strait of Hormuz, had a special responsibility to support international efforts to secure maritime navigation under international law and the UN Convention on the Law of the Sea.

Oman also called for the restoration of freedom of navigation and safe shipping through the strait, and said the US-Iran MoU should achieve its objectives to help deliver peace.

Iran is objecting vigorously to the use of the Oman route. From Aljazeera in Iran warns against Hormuz crossings without authorisation:

Iran’s Revolutionary Guards (IRGC) have warned against any crossings of the Strait of Hormuz without authorisation, saying vessels not complying “will be dealt with” and criticising a new route through the waterway.

The future of the strait, a vital route for energy shipments that was effectively blocked by Iran during the more than 100-day war between the United States and Iran, is a key sticking point in negotiations between the sides….

“The only authorised route for passage through the Strait of Hormuz is the route announced by the Islamic Republic of Iran,” the Revolutionary Guards, the ideological arm of Iran’s military, said on Thursday.

Any crossing without authorisation is “unacceptable and extremely dangerous”, they warned in a statement.

They also denounced what they said was a new route through the waterway announced by “certain authorities”, without elaborating.

Keep in mind that there have been splits between the IRCG and the political leadership before, as in at least one occasion I can recall when the IRCG declared the Strait of Hormuz to be closed and the officialdom then involved in negotiations denied that. In the recent declarations of Strait of Hormuz closure, the IRCG does not appear to have backed that up with action, such as sending vessels or firing shots near non-compliant ships.

The opening of the just-started meeting between the US and GCC states had the President of Bahrain, presumably voicing a shared position, and later Secretary of State Rubio, both state that the Strait of Hormuz would have free passage:

If Bahrain’s statement indeed reflects a consensus view in the Gulf, that means Iran’s hope of securing GCC cooperation with its navigation control/fee plan is toast, ex a kinetic war flareup that leads them to relent in the face of new realities. As things stand, it does not appear that Oman will join Iran in asserting control over the Strait of Hormuz in the face of opposition from most (all?) GCC members.

Needless to say, Trump reaffirmed his existing position that no way, now how will Iran levy Strait of Hormuz transit charges:

A more consequential item is that US digging in on its claim that Iran will not be allowed to charge fees on Strait of Hormuz transits. From Bloomberg in Hormuz Fees Branded ‘Unacceptable’ by Trump in Warning to Iran:

  • President Donald Trump said tolls on ships sailing in the Strait of Hormuz would be a red line issue for the US in negotiations with Iran.
  • Trump stated that it would be unacceptable to him if a final Iran deal included any service or shipping fees in the strait.
  • Iran has signaled that it plans to administer the strait, and has said that ships need its permission to cross the waterway and would require a mandatory insurance policy to do so.

Asked if he would reject a final Iran deal if it included any service or shipping fees in the strait, Trump said that he would.

“It would be unacceptable to me, because we have numerous strengths, and if you did that for them, you’d have to do it for other people,” the president told reporters at the White House on Wednesday. “It would be a game changer.”

Mind you, as tough as this sounds, recall that “unacceptable” is an admission of weakness. It seems unfathomable that the US would ever give the Persian Gulf Authority formal permission to charge fees. Any final pact merely needs to be silent on this issue.

But if Trump really means what he is saying, will Iran reject a final agreement? Given widespread opposition to Iran controlling the Strait, this would not be a great hill for Iran to die on, even if, as Robert Pape points out, the Strait of Hormuz is the mechanism by which Iran could become a fourth world great power. But the US is likely to fail to deliver on the MOU in enough other ways that the Strait of Hormuz becomes the mechanism for compliance, as opposed to a mere disputed point in the talks.

Ironically, Israel could allow Iran to again assert dominance over the Strait of Hormuz by force of arms if things get so ugly that Iran fires on locations in Israel that are supporting the Lebanon operation and Israel strikes back, either via bombing or assassinations. But it is still faced with how to maintain dominance on an ongoing basis.

I do not share the hope of many that Iran-Gulf state discussions per below will do more than come to an understanding about these nations restricting US use of their territory and airspace in return for Iran not shooting at them again:

The latest Israel-Lebanon ceasefire lasted only about 48 hours. Israel killed two men for the aggressive act of operating a bulldozer…in an area badly in need of rebuilding. More important, Israel is insisting no way, no how is it leaving southern Lebanon. Many commentators close to the negotiations, such as Trita Parsi, have said Iran regards the commitments in the first clause of the Memorandum of Understanding (MOU), which effectively includes Israel leaving Lebanon, as paramount. Iran so far has been silent about these violations. And it seems clear that mere stern words from Iran about Lebanon will not suffice. We’ll return to the state of play in Lebanon soon.

Israel is digging in on defying the MOU by insisting it will stay in Lebanon and violating the ceasefire. The Hareetz headline says it all: ‘Soldiers In, Residents Out’ Netanyahu: Israel Won’t Withdraw From Lebanon ‘As Long as I Am Prime Minister’

Not only is Israel doubling down on its insistence that it is staying put in Lebanon, Israel Defense Minister Katz says that the US has not asked Israel to leave:

From a lightly edited machine transcript:

Hindustan Times narrator: Israel’s Defense Minister Katz also defied Trump’s broader regional approach, insisting the IDF would remain in Lebanon.

Katz [translation in video clip] : The IDF is prepared in the yellow line, and we are not retreating. We announced that in any case, we are not withdrawing as of this moment. And this is a political achievement. There’s no American demand for Israel to withdraw from Lebanon.

Interviewer: There is no such demand?

Katz: There is no demand, and in any case, we will not withdraw.

Interviewer: Even if there is? Even if there is an American demand, we will not withdraw from southern Lebanon?

Katz: But there is no demand. We’ve made it clear. The Prime Minister to the President meet to Pete Hegseth, the Secretary of War, the IDF.

We are there to protect the residents of the north.

This Reason2Resist report shows Trump blowing off repeated questions from a reporter about what Trump will do about Israel saying it will not leave Lebanon (starting at 10:20):

An aside: Lascaris towards the end also provides a helpful discussion of the legal issues raised by Iran’s plan to regulate Strait of Hormuz traffic and later charge fees.1

Trump seems emboldened by the fact that oil prices are falling due to the inventory on ships bottled up in the Gulf getting out and the prospect of normalization. Thus if the US continues to disregard the MOU, most importantly via not using its considerable leverage over Israel to force the settler colony to exit Lebanon, Iran will have to take steps that threaten the flow of oil and goods. And mere statements that the Strait of Hormuz is closed, not backed up by action (at least of the “shot across the bow) may not suffice.

And let us also keep in mind that any action by the Trump Administration against Israel is likely to be hesitant due to the clout of the Israel lobby (which is still a force even if the sweep of anti-Israel candidates in New York shows its power is now fiercely contested in the Democrat party) as well as Trump’s personal long-standing ties to Zionists, as demonstrated by their high representation in his inner circle. Expect the US to devise half-pregnant solutions for Lebanon which Iran is sure to reject. So the arm-wrestling over Lebanon could continue for a while, assuming Iran demands the US hold fast to its MOU commitment. But again, I don’t see how Iran has any hope of prevailing unless it shows it will again clamp down hard on Strait of Hormuz traffic.

True to form, Israel is engaging in what Chas Freeman has called a ceasefire with Israeli characteristics. From Elijah J. Magnier on Twitter:

For the second consecutive day, Israel violated the ceasefire under the cover of US consent, exposing the fragility of the agreement and the complicity of Washington.

After several months of fighting, many Lebanese remain buried under the rubble across different parts of southern Lebanon. For the Lebanese resistance who fought against the occupation forces, the priority now is not immediate retaliation for Israeli violations of the ceasefire, but the recovery and burial of its fallen fighters, the reorganisation of its ranks, and preparation for whatever comes next.

The time for a response, the resistance believes, will come in due course. For now, the movement is absorbing its losses, honouring its dead, and ensuring that its military structure remains intact and reinforced for the next confrontation.

And:

Aljazeera reported at around 2:00 AM EDT that an Israel soldier died in Lebanon. However, later reporting says this was an accident, os it may not lead to more Israel escalation.

The US side is pushing against Iran on other issues. A delicious statement of where things seem to be:

Continuing with the outtrades between the US side and Iran, the Middle East Eye live feed includes the entry: UN nuclear chief says inspections in Iran will go ahead despite Tehran’s caution:

The head of the International Atomic Energy Agency (IAEA) says the UN’s nuclear inspectors will visit Iran’s enrichment sites, despite Tehran indicating that any such inspections will only take place after a final agreement is reached.

“This is going to happen,” IAEA Director General Rafael Mariano Grossi said on Wednesday…

However, an Iranian diplomat said any visits by IAEA inspectors would only take place once a final deal has been concluded.

This is just silly. How many divisions does the IAEA have?

Since we expect this to come into focus at some point, we will not spend too much time on the barmy $300 billion fund idea, even though it is right there, as big as life, in the MOU. The Gulf states, which the US has tried to depict as the piggy bank for this scheme, are already mighty upset with the US. It is an awfully tall order to ask them to pay for Iran reconstruction when they haver their own to do and they are already hopping mad about not having been consulted during the talks. From CNN in Trump’s Gulf allies fear his Iran agreement is a ‘disastrous turning point’

Gulf states had opposed the 2015 Iran nuclear agreement reached under the Obama administration and cheered Trump when he tore it up in 2018 because it didn’t address their concerns. The emerging US-Iran pact is likely to generate even greater unease in Gulf capitals, not only because it leaves many of those concerns unresolved, but because it comes amid what Alhasan described as a “major loss of confidence in the US.” A senior Gulf diplomat told CNN the conflict showed that “Iran had a well-developed plan to target” Gulf states….

The pact also requires Gulf buy-in because it includes a $300 billion reconstruction fund for Iran. Trump committed Gulf funding to the initiative, but there is little evidence that Gulf states have done the same. Saudi Arabia has said it has “no details” about the proposal, while Qatar has expressed interest without formally signing on.

Rubio said he would not be asking allies for monetary help with the $300 billion Iran reconstruction fund during his trip, calling that “far down the road.”

BWAHAHA. That is out of line with the text of the MOU:

The United States of America undertakes with regional partners to develop a definitive, mutually agreed plan with at least USD $300 billion for the reconstruction and economic development of the Islamic Republic of Iran. The mechanism for the implementation of this plan will be finalized as part of a final deal within 60 days.

So Rubio looks to be admitting that the US expects to renege on this part of the deal…or push reaching a final pact way way off.

Rory Johnson provides a generally informative discussion with Mario Nawfal on the present status of Strait of Hormuz transit, with one caveat: he seems completely unaware of the role that the oil cliff play in Trump suddenly deciding to capitulate to Iranian demands. However, describes how (as we anticipated) that even though the oil flow coming out now is significant, it still consists largely of loaded tankers that had been trapped in the Gulf exiting. Energy and other supplies will not reach stable levels until there are two-way transits, or as Johnson puts it, that there are loadings talking place in the Gulf.

Sal Mercogliano describes how shipping, even though up in the Strait, is still tentative, with a lot of vessels running with transponders off. Mercogliano seemed a bit surprised that the US blockade is off; one could read that as implying that the US had cut its naval force presence, but a new report on Hindustan Times cites CENTCOM reaffirming that its main assets are still in theater. He seemed also seemed a bit surprised Navy not entered the Gulf (Mercogliano seemed not to recognize that that could be construed as an act of aggression under the first clause of the MOU)

Similarly:

And as everyone is popping champagne, Cushing is fast approaching its operating minimum, which I understand is 18 million barrels. From Hormuz Letter on Twitter:

BREAKING: The EIA confirmed US Cushing crude oil inventories have crashed to 19 million barrels, the lowest level since 2014 and just 2 days from rock bottom where pipelines lose pressure and the strategic hub begins physical breakdown, with the US Strategic Petroleum Reserve falling another 9.1 million barrels to 331.2 million, the lowest since 1983.

The IRGC Navy continues to halt new permits for Strait of Hormuz passage, with only directly selected vessels still allowed through.

And JustDario:

Oil maverick shorts beware, this is what’s going to happen when Cushing hits tank rock bottoms in 2 days:

– Below 20 million barrels, the physical hub struggles to pump and transfer crude. Pipelines lose pressure, and blending operations become highly restricted.

– Refineries face immediate difficulties accessing the crude they need to produce fuel. Outbound flows and export shipments face potential curtailments and delays.

– If supplies are critically depleted, terminal and pipeline operators may invoke force majeure, legally halting supply commitments due to events outside their control.

These are the technicalities from oil engineers, not assumptions. I am not the one making the rules here

Commercial inventories, which analysts have stressed were also low, are being tapped at higher-than-expected rates because the price signals are that everything is ducky:

So the oil situation is still precarious, despite the happy mood in the markets and business press.

Done for today! See you tomorrow!

____

1 Lascaris, who is a lawyer, effectively said that Iran had a colorable position. I made an erroneous earlier characterization of the legal standard Iran is relying on, which is “innocent passage”. Iran could argue that any ship from or connected to countries that has supported the war were subject to control and therefore also fees.

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149 comments

  1. The Rev Kev

    This all sounds like Trump is trying to renege on every point that he agreed upon with that MoU. The agreed upon passage fees, the $300 billion fund, the pull back by Israel in Lebanon. I would go so far as to suggest that Trump even had Grossi start squawking about nuclear inspections to help derail the negotiations. But it may be that Iran is playing the long game here as they know that there is an economic cliff coming up, even for the US, and that when it happens, the pressure on Trump will be tremendous to buckle to Iran’s demands. And they will not even have that long to wait as we are already near the end of June.

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    2. Yves Smith Post author

      Please re-read the post. This is not just Trump reneging. Iran overplayed its hand in assuming it could get Oman to violate a UN treaty and join it in running the Strait of Hormuz. (oh, and the MOU NEVER allowed for transit fees, please do not misinform readers)

      Oman is pointedly a neutral country and is also older than the US, so likely knows more than a bit about survival.

      Even I at my considerable remove could discern that Oman had made no commitment whatsoever to Iran regarding the Strait of Hormuz, and given UNCLOS alone, was unlikely to.

      So Iran set itself up for defeat.

      The hardliners were right. Iran should have kept the war on and inflicted enough pain to force actual submission, and not just a capitulation on paper, which was too complete given the givens to have much confidence that the ever-duplicitous US would even minimally adhere to it.

      But Russia and China may have been applying too much pressure on Iran to stop choking the Strait of Hormuz for that to be a viable option.

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      1. Cardiac

        I recall a few weeks back that someone had mentioned the agreements Oman is party to DO allow for collecting certain fees related to environmental protection of territorial waters, and that Oman might accept an arrangement with Iran under that pretense. Clearly that has not happened, and a toll is a toll is a toll, but regular readers can be forgiven for thinking that Oman’s silence on the issue prior to now reflected an openness to some form of joint-administration with Iran.

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        1. Yves Smith Post author

          Oman is a small and neutral state. The cost of alienating all its neighbors to collect fees nearly entirely from them based on strained legal readings never looked like an attractive risk-return tradeoff.

          UNCLOS does NOT allow for environmental fees but only for those provided to ships, like tugboat guidance through dangerous passages,, and only in a non-discriminatory manner.

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          1. KD

            In a sense, if Oman agreed to go along with Iran on the Hormuz scheme, it would in effect turn them into a de facto Iranian proxy, and they would be tying their sovereignty to the Persian mast. This would be a very risky bet at this time, even putting aside all the objections that might be made for preservation of Oman’s independence. It would certainly pin a target on their back, and they would be a lot easier to take down than Iran given their size, topology, population and location.

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            1. amfortas

              from what ive learned about the Omani rulers in the last month or two…they are as much chess masters as iran is.
              and are as patient and circumspect and strategic.
              given their Ibadism, they view the Sunni and Shia as equally apostate,lol.
              and just bad neighbors to be dealt with(been there!)
              so they’re waiting…trying not to choose a side, until the winner emerges enough.
              i reckon they’ll tolerate a lot of craziness from Iran, because they see the value of getting the USA! out of the region.

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      2. Feck

        The hardliners were correct but Trump and nutty got the people they wanted in Iran into power. Remember when Raisi was killed? Never thought he was the main target, it was hoessin amir-abdollahian. Hoessin had charisma and charm. He got the western public to support the Palestinian cause. Why do i bring that up? Araghchi doesn’t have the same charisma or charm, what does Araghchi have then? Araghchi was the lead negotiator for wait for it…the jcpoa. In 2021 Raisi demoted Araghchi due to him giving up too much in the jcpoa. Now Araghchi is back in the spotlight and im pretty through 3 bombing campaigns the guy hasn’t been targeted even once. Wonder why.

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        1. Gretzn

          Araghchi’s “luck” may run out yet.

          A lot of people in Iran are calling for his head figuratively or literally and Supreme Leader Khamenei II when giving a conditional okay to the MoU sounded very much like he is setting up Araghchi to be the scapegoat/fall guy for when the current charade inevitably collapses and violence resumes.

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      3. Acacia

        Seems like Iran can already just declare the MoU void. The US has already reneged. Why wait?

        And what if they sink a couple of tankers on the Omani side of the strait, because the ships ignored their demands?

        None further will pass, and meanwhile the oil cliff is rapidly approaching.

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        1. motorslug

          Iran is unlikely to sink any tankers for show. They are too sensitive to innocent lives being endangered and environmental damage. Could totally see them hitting propellers and rudders though.

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        2. John k

          My guess is just attacking israel on account of Lebanon, which would respond probably with us support, would stop traffic.
          And I assume any resumption of hot war trashes the mou. Plus, hot now would be coming as info on tank bottoms can’t be kept from the market, meaning pressure on us to a hard stop.
          Maybe ayatollah sides with hardliners at this point.
          A lot of damage to world economy is baked in. China no doubt worries about world depression, but I assume would prefer us pushed out of ME and Israel isolated. There seems to be many observers who think us/israel simply can’t continue a hot war for more than 2-3 weeks, and that looks to be when tank bottom arrives.

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        3. Acacia

          @motorslug and @John k — yes, all of that makes sense.

          FWIW, though, a cargo ship on the Omani side of the strait has been “struck by an unknown projectile” and the price of oil futures reversed its downward trend and started moving up again.

          Doesn’t mean Iran did it. Moreover, UKMTO reports the ship was hit on the starboard side, which if it were exiting the strait would be the side facing Oman.

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          1. amfortas

            see me waaay down below. a potshot from “somebody” will be enough to “close the strait”, from now on.
            Oman’s safe passage be damned.
            precedent is set.

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      4. Rory

        Am I right in thinking that unlike Iran, but like its neighbors on its side of the Persion Gulf, Oman is an Arab state? I wonder if that might have anything to do with its long term loyalties.

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        1. amfortas

          see:https://en.wikipedia.org/wiki/Ibadism
          for some insight, here.
          they(the rulers, at least) regard the sunni and shia as apostates and crazy people , but who must be tolerated because of their proximity, as well as their violent and unislamic ways,lol.
          i had never heard of Ibadism until a month and a half ago.
          and ive been half-assed studying all the Islamic Ummah for decades, now.

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  2. Cocomaan

    If Oman has decided to grow a spine it looks like Iran is going to have to decide whether they’re going to use their clout or not.

    And they might not. They have to live next to their Gulf neighbors and we do not.

    Seems to me that them taking military action and closing the Strait again would result in them facing more international condemnation, as “peace” was established. Trumps bloviating might have actually turned the narrative around for most people who have short memories. And long term a lot of players aren’t going to be using Hormuz to move goods if they can help it.

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    1. ISL

      All Iran has to do is blame it on Israel and its new genocide in Lebanon, along with a barrage (or ten) into Tel Aviv. Strait closed and leave it closed until Israel retreats and Oman comes to its senses (or bankrupcy). The cliff is approaching fast and a deseperate Mr. Market will force Trump to force everyone in the Gulf’s hand (except the comprimat holding Israel).

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      1. Anonymous

        Oman’s best outcome here is unilateral closure of the strait by Iran with an exception for notifiied Omani traffic. Then it never has to take a side as it is the victim.

        Oman has direct access to the Indian Ocean and Oman is the logical end point for any new targets, sorry pipelines to take Emirati or Saudi oil in bypass of the strait. This may become a money-earner for Oman.

        In fact, if the strait were de facto closed except to Omani and Iranian-flagged shipping by Iran, Oman could make a nice living. Its neighbours oil and gas reserves are much bigger than its own and Salalah is already a major transhipment port for non-petro cargo and would happily take Jebel Ali’s business from Dubai.

        Like Iran, time is on Oman’s side in these discussions.

        Egypt closed the Suez canal unilaterally for years. The strait of Hormuz will be the same. After all, who is going to reopen it and how, international treaties be damned. Who will bell the cat, in the US-declared era of might is right?

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        1. Yves Smith Post author

          You are like an economist assuming a can opener.

          A blockade is an act of war.

          So you would have Iran declare war on Oman, which has not harmed Iran in any way?

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          1. Anonymous

            Heaven forfend! The Omanis and the Iranians are both wonderful people.

            But if Iran closes the Strait unilaterally (which is not a blockade, Oman has access to the wider world and would be unaffected provided access to Musandam was guaranteed) and Oman protests its UNCLOS rights weakly but agrees to work with Iranian operational control without prejudice to its rights in exchange for otherwise unconditional access through the strait, well Oman is a victim but also, depending on the deal with Iran, the owner of a set of valuable freedoms, by analogy with air travel, like cabotage etc.

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            1. Yves Smith Post author

              Oh, so you are an Orieintalist bigot. Everyone I know says the Iranians are fabulous people and John Kikiakou said the Omanis were the best country he dealt with during his extensive time in the Middle East with the CIA.

              Look at a map. Iran cannot control traffic on the Omani side without Omani participation ex a blockade or other violation of transit in Omanis territorial, as in sovereign waters.

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              1. neogeshel

                If Iran determines its future existence depends on control of the straight as the only effective deterrence, it seems to me they will be willing to bear whatever opprobrium results from asserting physical control of the straight on the Omani side regardless of international law. After all, the US does that all the time.

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          2. Anonymous

            Another way of trying to put what I am suggesting is the Br’er Rabbit tale: please don’t throw me in that briar patch, Br’er Fox!

            Perhaps that’s the Omani position, to be thrown in the briar patch of special victim, able to use the strait but forced to pay a fee they refuse to collect their share of (and need not pay anyway because they have Indian Ocean access). Everybody else acceptable to Iran can use Omani ships and ports but has to pay Iran’s fees.

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                1. H. Alexander Ivey

                  Because there is such a thing as honour and integrity.
                  Pre-Reaganite American males might remember when a man’s handshake was his word.

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      2. Yves Smith Post author

        I did mention that Iran restarting the war was its best option, as in Israel is proving to be Iran’s best friend.

        But it needs to reboot the war soon so as to pretty much limit additional oil supply to vessels now loaded in the Gulf transiting out, and not new loading getting underway.

        And Iran has to decide whether to first hit Israel operations in Lebanon (which would be the better course of action, since Israel will not be deterred but appearances are better) and then strike locations in Israel that are supporting the operations in Lebanon, or go directly for the latter.

        Please no “barrage into Tel Aviv” nonsense. Iran does not believe in killing civilians. Do not advocate Iran stooping to Israel’s level by engaging in war crimes.

        But that in NO WAY solves Iran’s problems when the shooting stops. Without Oman, it cannot control the Strait of Hormuz in peace time. It just kicks that can down the road at the cost of increasing the odds of global depression.

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        1. lyman alpha blob

          According to the anti-globalists, this MoU came about because the Zionist entity had attacked Beirut, Iran was about to respond harshly, and Trumped suddenly agreed to everything to get Iran to hold off, even to the point of making sense on stage at the G7, mentioning that it wouldn’t make sense to deny Iran uranium enrichment or missile capabilities when it was perfectly legal for other countries to do so.

          And now he’s quite predictably going back on all of it. Why Iran fell for this, after being attacked during negotiations multiple times previously, is beyond me. If they are waiting for the rest of the world to figure out that the Zionists are the bad guys, the world was there a long time ago. That realization has now made its way even to Jewish majority Congressional districts in NYC. Iran has strength and the moral authority here, and they need to use both.

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        2. hemeantwell

          Regarding the question of Iran continuing the war, we face the difficulty of gauging how much Iran temporarily holding off from retaliating against Israel helps to accelerate the erosion of US support for Israel It may be a stretch to say that restraint contributed to the outcome of the Dem primaries and Carlson and MTG loudly exiting the Republican party. But it might, and coupled with Iran’s ability to titrate the fears of Strait shippers without, at least for the time being, resorting to direct assaults on shipping, the Iranians may have good reason to tread water for a bit before ramping up military action.

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        3. nippersdad

          Giving Trump a small taste of the drug, a window into how things could have been, may be of use in moving Trump to honor his commitments when the strait is closed again. I don’t think that anyone is in doubt that the war will continue, but being stiffed on nearly every point of the MOU is an object lesson which gives Iran that much more leverage in the long run to occupy the strait regardless of what Oman wants. They can just declare force majeure, as no one thinks that Oman could make any military difference to the outcome.

          Israel has its’ occupied territories, as does the US in Iraq and Syria. It would be hard to argue with a straight face that Iran cannot have them as well. A frozen conflict may serve them as well or better than a settlement.

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        5. ISL

          There are lots of military targets in Tel Aviv, military HQs, intel centers, and Ben Gurion. Or military bases in the north of Israel. Absolutely agree that Iran cannot allow the Israelis’ violations to go for weeks – the attempt to renege (walk back) on virtually all the MOU agreements in days also means, IMHO, a return to kinetic action is very likely very soon.

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        6. Jim

          Israel and the U.S. have turned Ben-Gurion into a military airfield, with dozens of U.S. refueling tankers parked on the tarmac. Rather than Tel Aviv, wouldn’t that airfield be a thoroughly legitimate target? The U.S. has just bombed Iran again. There’s precious little understanding left in that memorandum.

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    2. Yves Smith Post author

      Please tell me the justification for Iran asserting control of Omani waters when Oman is not a belligerent and has never been hostile to Iran.

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      1. TimD

        I think they will invoke the “So is. So What” principle. The US is saying that the ships are in Omani waters and Iran is breaking international law. The Iranians can invoke, so is the US/Israeli attack on Iran, so is the genocide in Gaza, and so is Israel’s invasion of Lebanon. So we are closing the Straights of Hormuz and what are you going to do about it?

        The US is free to go to the UN for sanctions, put its blockade back in place, and attack Iran again. Which means lighting the fuse where Iran goes finishes the oil infrastructure in the gulf and attacks Israel.

        When the US ignores international law, it invites everyone to do so.

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        1. John k

          Really a good point.
          Iran has to decide how much it needs agreement with Oman, and how much respect it needs to pay to western written international law that the west honors only when it serves them. The un/world bank/imf were created for the colonial west, not ROW. So long as the west has the power to impose them on the rest it will continue to do so.
          In this case the west does not hold the power to impose their will on Iran if Iran has the will to impose its on the west. Iran needs to own the west;s ‘what you gonna do about it’?
          Oman wants to get along with its neighbors who of course don’t want to pay tolls to Iran, but as a group they aided the war against Iran, as a group they can pay the price to repair Iran’s infrastructure.

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        2. Yves Smith Post author

          No, this is projecting US “might makes right: on to Iran. So you want Iran to act like Trump? Seriously?

          1. Iran is not a belligerent. It has not started a war in over 250 years.

          2. Iran respects laws and treaties. It hewed to the intrusive requirements of the JCPOA. It has been advancing legal arguments for it to charge fees for traffic on its side of the Strait of Hormuz

          3. China and Russia, which are key allies for Iran, would be guaranteed to oppose Irani aggression against Oman.

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          1. TimD

            I agree with you Yves, on one level. At the same time look what that behaviour has got the country, its democracy overthrown, a US-supported proxy war from its neighbour, assassinations, bombings, sanctions, demonization and a whole bunch of other stuff that I can’t think of right now. They have been more than patient.

            Besides, they don’t have to attack Oman, in order to get the desired effect they just need to fire off a few shells. The insurance companies will close the Strait.

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      3. Sunlight Disinfects

        Perhaps: “Right to Defend itself”

        Same justification used by Israel to slaughter Palestinians and grab land in Lebanon, Syria, West Bank, and Gaza.

        Iran could say, as long as the Gulf States host bases, their is an implicit threat. And as long as Israel is allowed to flaunt international norms, Iran can not be held to those norms.

        PS Just noticed that my answer is essentially the same as TimD.

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          1. Offtrail

            Oman does not have US bases, but it does have agreements with the US that allow the American air force to use Omani airfields, and US Navy ships to use its ports.

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    3. Taufiq Al-Thawry

      So, couldn’t Iran just kinda hold it’s position without aggression towards Oman? If traffic was to be confined only to Omani waters, then my understanding is that it would remain a serious bottleneck and unduly dangerous to navigate potentially keeping insurance costs high

      As these updates have well pointed out throughout this conflict, “closure” has never actually been about absolute closure – rather about disruption, costs and the tight margins and timelines of supply chains.

      If Oman doesn’t want cut in, then Iran can still pursue their policies as the preferred route for allies and/or those willing to pay – everyone else can queue up to move through Omani waters like us plebes suffering the traffic of the non-toll highways. It’s all very possible I’m missing something though because I know very little about the world of shipping and such

      Reply ↓
        1. Taufiq Al-Thawry

          Yes, I understand that which obviously undermines Iran’s authority politically, but I don’t necessarily see it as all lost in terms of economic leverage. My (perhaps erroneous) assumption here is that, to restore the volume of transit necessary to service the global demand (something approximating pre-war levels), the Omani waters alone will never suffice

          I believe I read previously that, at most, Oman waters could handle about a third of the pre-war traffic. I have no way to independently verify that number.

          With that clarification, am I still missing the point?

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          1. ISL

            One oopsie with a mine and that drops to zero. Also note, Kpler analysis is optimal, and there are lots of reasons (even a storm) for sub-optimal performance.

            Also, note that the report is not for two-way traffic, suggesting that even if Oman refuses to participate, this would limit total non-Iran controlled traffic to just 20 ships a day, which does not significantly (Compared to the other uncertainties) change the cliff’s date. Not that any ships are queuing to enter.

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  3. ChrisFromGA

    The optics of this aren’t good for Orange Julius. He’s having to haggle and bicker with the Iranians over every term in the MoU. That’s not “full spectrum dominance.” Whatever happened to “winning the war in four weeks?”

    This is no Venezuela. Plus, the continued back and forth, along with the threat of hostilities resuming, means he can’t pivot to other things, like the Ukrainian war. He’s trapped.

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  4. What? No!

    At the start, I was in favor of this new fangled attritional war thing… the stronger, smarter side just has to sit back and do what it does best. The other side will flail and terrorize until they simply can’t anymore.

    But watching how this has gone for Russia and Iran, I’m really surprised just how many things change (not in a good way) the longer these efforts drag on. New weapons come online, new alliances form, old alliance alliances break down, new money, new enemies, new lucky breaks, stock piles get tepidly refreshed, populations get more ornery & entrenched, and narratives spread out like fractals.

    There seems to be a HUGE advantage to keeping the initial momentum going until at least some tangible piece of capitulation kicks in. Ceasefires and meat grinders can be advantageous & clever in the long term, but man the attrition route turns out to be a lot harder than it looks.

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    1. Yves Smith Post author

      Russia will prevail in Ukraine. Putin is going slowly to preserve the civilian economy. And really wearing down Ukraine will make it easier to deal with the post-war situation, like how much to occupy and how to create a weak and/or dysfunctional rump state.

      By contrast, you can hardly call a 100 day war long enough to be attritional. The only reason it kinda sorta looks that way was the US was over-extended going into it.

      Reply ↓
      1. vidimi

        Probably. Maybe. But it will be like any large scale project. The cost that Russia’s civilian population will end up paying will be much, much higher than initially budgeted. Moscow’s population is already getting restless. Per my SiL, people are afraid to go out or go on vacation. How will they stomach attacks if they increase in frequency and range?

        I can’t say with any confidence that Europe will fail in its goal of bleeding Russia out. Ukraine loses either way, but that’s a sacrifice that the EU is willing to make. Also, Europe has massive escalation dominance: Russia wants to contain things while Europe would love to open up another front in Moldova, Armenia, Georgia,…

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        1. Yves Smith Post author

          HUH? The Russian economy is in way better shape than before the war. The oligarchs are more or less forced to invest at home rather than export it to buy London real estate and yachts. Russia is likely spending a lower % of its GDP on its military than the US is (when you count all the black budgets, only some of which are kinda disclosed, see this as one of many examples https://nypost.com/2026/03/18/us-news/sen-joni-ernst-reveals-77b-in-secret-defense-spending-kept-from-taxpayers/), while developing many advanced weapons and getting them quickly into service and proven in battle (which creates big foreign sales opportunities). Russia is also making an effort to have as much of its new military capacity be dual-use.

          So how is Europe bleeding Russia out? With Europe de-industrializing and at risk of gas shortages this upcoming winter, it looks to be the reverse.

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          1. ambrit

            Tangentially, this winter looms large in many spots. When the “Oil Cliff” arrives, what of the American Northeast and its oil fueled heating systems? Northern Europe will not be the only region going cold this winter.
            Throw in the collapse of the AMOC just for laughs and we get truly scary winter conditions for the northern hemisphere.
            Stay safe in the tropics.

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          2. Yves Smith Post author

            A reader left a rule-violating comment but did raise a valid point, in that I had not substantiated my claims re the level of US “defense” spending. A colleague who is a Federal budget experts says the Pentagon effectively has a blank check, although a lot is formally buried in DHS. Actual total military spending is about $5 billion a day, or $1.8 trillion total. And even some of that is not properly counted. For instance, we send weapons to Israel that we treat as purchase when we in fact provided the money for the buys too.

            There is a reason the Pentagon has been unable to balance its books since the early 2000s. It is a feature, not a bug.

            By happenstance, another reader was a contractor on a project to try to clean up Pentagon accounting. He said there were a decent number of payments with no documentation as to what they were for.

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        2. JoeSixPack

          Europe has massive escalation dominance

          In what universe does Europe have escalation dominance? Europe’s economies are collapsing. Europe has zero military industrial base. Europe no longer had cheap energy from Russia nor have they replaced it with another cheap source. Europe does not have any capacity to prolong the war Ukraine. All Europe is capable of doing is pin pricks which they spin as “massive strikes”.

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          1. amfortas

            the euroleadership class(sic) has been raised up to convince itself that russia and the evil putin(a sauron figure in their mythos) wants to do to them, exactly what they want to do to russia.
            never does the question come up…”well, why would russia want europe?”.
            because it doesnt…and why would it?
            to occupy such a place!,lol
            russia is rational.
            Putin is rational.
            Europe is living in lord of the rings-ish fantasyland.
            similarly with china…its is widely assumed(ie: my cousin, for years) that China leaping beyond us will mean that they will “take our place” as in lord over everybody just like we have.
            that doesnt look to be likely, to me…different civilisations, different things they think of as important, different mores and folkways, different philosophies, etc etc.

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            1. Gretzn

              As Gandalf explaines to Frodo: Sauron would prefer enslaved Hobbits over Hobbits that are happy and free just because.

              That is how they view Putin and really Russia as a whole.
              Total annihilation is preferable to the horrors of living under russian rule.
              That is an article of faith that they have been literally peddled for centuries that of course their is zero factual evidence or logical reason to belief and endless evidence contradicts it but they could not care less.

              Thus it is totes okay to be a nazi collaborator even supposedly rabid antifascists immediately grow all understanding because everyone just KNOWS in their bones that Russia is always the worst alternative, for everyone, including Russians.

              Thus one can in totally good conscience force Ukraine to fight to the last Ukrainian because at least they have been spared the fate of falling under the Shadow of Russia.

              And everyone just nodds sagely without ever questioning anything, ever.

              Well, certainly that’s how the Germans are ticking and not just the “elites” either.

              The basic assumption that Russia isn’t interested in conquest never enters any mind and no reason for Russia not attacking except for russian weakness or teutonic strength and badassery does either (even what counts as the pathetic excuse for a german peace movement operates largely under the same assumptions and parrots a lot of NATO propaganda as faithfully as the craziest hawks, at least where russian weakness and infinite european and really, though they sorta hesitate to say that part out loud, specifically GERMAN superiority).

              I think deep down even anti war Germans are smug that the Wehrmacht overran a dozen countries right quick while Russia seems stuck in Ukraine, that they (or at least their Opas) would so a better job is also something they feel in their bones.

              Never mind that the nature of war has changed beyond recognition and that even a technologically updated Wehrmacht would be even more quickly and completely annihilated if it tried to advance with ww II style tactics, ending as a total turkey shoot.

              But I digress.

              In one of his letters JRR Tolkien explained that even if Aragorn, Gandalf and Co had bred their own army of orcs to fight Sauron they would still have been totally cool and Jim Dandy moralitywise (Palantir and their ilk aren’t as far from getting Tolkien right as Tolkien fans would like you to believe).

              And that is also an attitude completely shared by our noble € elites (plus those plenty of non elites).

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      2. motorslug

        “The only reason it kinda sorta looks that way was the US was over-extended going into it.”
        Ain’t that the truth. Russia kinda has it easy in one way as Ukraine is right next door. The US decided to pick on a near equal 7000 miles away and sit in the ocean 500 miles out wasting fuel, money and time for practically nothing. All these ICBMs are useless.
        Taiwan is probably looking at this thinking “Ok, China ain’t so bad we can get along.”

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      3. ISL

        Agree.

        Consider, Ukraine had a population of 56 million down to 19 million now? Another year and it will be down to what 15 million? Note, there are 2.4 million military-age men losses – the population that feeds a guerrilla movement, with most of its industry in the east, removed, i.e., a mostly agrarian, very low population country. After WW2, the US immediately began stoking Ukrainian terrorism against the soviets. I believe Putin is eliminating that option by completely exhausting the population.

        https://news-pravda.com/world/2026/06/24/2399217.html

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        1. ISL

          Note that the linked report of 2.4 million losses is from a hack of the Ukrainian MOD; however, it is consistent with other estimates.

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    2. jsn

      People who think wars are, or should be easy tend to start them.

      “We do this not because it is easy, but because we’re thought it would be easy!”

      Yves likes to quote Blanchett as QE-1, “I do not like wars, they have uncertain outcomes.” The downside of civilization is that it places individuals in the position to make these decisions for multitudes and that particular power is a magnet for sociopaths.

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    3. TK

      Respectfully disagree…hard to see things through the Western cultural bias in my opinion. Iran fought a bloody ground war from 1980-1988 which resulted in over half a million Iranian casualties. The Soviets lost estimated 27 million in WW2 and lived through societal collapse in 1991-1994 where life expectancy dropped precipitously especially among men. The West, especially the US, has nothing closely equivalent to these collective traumas. I’m thinking both Iran and Russia see things differently and are prepared to move slowly and carefully.

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        1. The Rev Kev

          At the end of the Civil war, there was one ex-Confederate State whose biggest line item on their post-unification budget was artificial limbs.

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    4. DD GE

      Another quote to remember is the one that says “wars usually last longer that is assumed”.
      So whenever an armchair-whatever comes on and says “ah, it’s just a small op to take their capital” or “done in days”, the last 4 years have given enough material to any thinking person to be wary.

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  6. Victor Sciamarelli

    Before we hang our hat on UNCLOS, I think it’s worth looking at the “Law of Naval Warfare” which may preempt UNCLOS in many circumstances and provide Iran with some leverage. There is also some difference from Lascaris’ interpretation.
    From Just Security: Expert Q&A on Key Law of Naval Warfare Issues in the Conflict with Iran By Michael Schmitt and Rob McLaughlin March 15, 2026
    https://www.justsecurity.org/133999/law-naval-warfare-iran-war/

    A few highlights: And I would stress Q9 below:
    Q1: What law applies to naval operations during this conflict?
    The two primary bodies of law governing naval operations are the law of naval warfare, which is part of the law of armed conflict, and the law of the sea. The former governs how belligerents must conduct military operations at sea.

    For example, “when naval forces engage in sea-to-shore targeting (e.g., carrier-launched airstrikes, ship- and submarine-launched missile attacks), the rules governing attacks on land apply, not those on targeting at sea.”
    Furthermore, “It is clear that the law of naval warfare applies in the current situation because the conflict between Iran and those States with which it has engaged in “hostilities” (most significantly, Israel, the United States, the Gulf States, and Jordan) qualifies as an “international armed conflict,” that is, a conflict between States.”

    AT Q3: How does the law of naval warfare deal with merchant vessels?
    However, there are important differences in the law that depend upon whether the merchant vessel is enemy or neutral.
    Neutral Merchant Vessels: However, the claim of a neutral “flag” is not dispositive and can be displaced. A merchant vessel may be reclassified as an enemy merchant vessel where the situation so indicates, for instance, through enemy ownership or operating under the control of the enemy.

    Q5: Can oil carried in neutral merchant vessels be treated as contraband?
    Yes, in limited circumstances. As a general matter, oil is susceptible to military use. It may, therefore, in certain circumstances, be treated as “contraband” when carried in neutral merchant vessels (see here and here at § 631). A critical factor is the cargo’s destination. The requirement is that it is destined for enemy-controlled territory. Accordingly, oil exported for commercial purposes cannot qualify as contraband.

    Q9: Can Iran legally “close” the Strait of Hormuz?
    “The analysis depends upon whether Oman is neutral in the conflict. This question hinges on the issue of whether Iranian strikes on Omani territory have brought Oman into the international armed conflict as a belligerent. The Sultan of Oman asserts that his country remains neutral. However, law of armed conflict classification rules hold otherwise, for an international armed conflict exists whenever there are hostilities between two States, even when one or both claim otherwise (1949 Geneva Conventions, common art. 2). Assuming Oman is now a belligerent, the Strait of Hormuz is entirely comprised of belligerent territorial seas. This means that while neutral merchant vessels and warships would continue to enjoy the right of transit passage through it, the Strait would now be a lawful location for exercising belligerent rights, including attack and capture under the law of the sea insofar as belligerent warships, auxiliaries, and merchant vessels of the belligerents are concerned.”

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    1. Travis Bickle

      The legalities are only there to provide a moral high-ground, internally and externally, to perhaps draw in allies or otherwise bolster support: not unimportant factors. This need impacts the degree to which a given country must exercise the insight and discipline to play a longer game.

      Here, Iran absolutely must do so, and clearly understands it; The US can (ultimately) afford Trump’s obliviousness, despite the oil/resources cliff — at least longer than the rest of the world; Israel is also operating in more existential circumstances, although their control over the US policy is a (presumed) safety net, giving them the freedom of action needed in pursuit of lebensraum. They know this window of opportunity will likely close for a period when Trump leaves, so they’re making hay.

      Oman, as noted, simply wants to avoid becoming collateral damage.

      Entonces, expect Iran to put their foot down, firmly, sooner rather than later.

      They will want to have gotten their ships out. And to loosen their tourniquet briefly in exchange for $XXB is a small price to pay. Doing so at the proper time, which Israel will reliable provide, the US and Israel will take the PR blowback from the larger world for the economic pain to follow.

      How do we reach a state of nominal balance again?

      Iran successfully driving a wedge between the US and Israel is the key, and I think they know it. That is the Critical Path to watch.

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    2. ISL

      Interesting loophole: A legal processing fee to determine non-belligerent status while vessels are forced to remain in an Iranian-controlled port, with confiscation if the oil was heading to NATO/Israel. Could easily see vessel operators paying to bypass the evaluation.

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  7. Rolf

    The optics of this aren’t good for Orange Julius. He’s having to haggle and bicker with the Iranians over every term in the MoU. That’s not “full spectrum dominance.” Whatever happened to “winning the war in four weeks?”

    Agreed, but haggling and bickering has always been Trump’s standard response, reneging on “deals”, stiffing parties absent a gun to his head to induce compliance. His sharpie signature is worthless. He seems to be playing a waiting game on a week-wise basis, hoping that the inevitable never arrives. Ever focused on himself, and regarding all others in terms of what he can get from them, how he can weaken them, I wonder that he really has any sense of what is in store.

    [Replying to ChrisFromGA above]

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    1. ChrisFromGA

      Thanks for the reply … yes, it is his M.O. I am wondering, though, if he is starting to crack mentally, he really took a big “L” here in terms of not being able to achieve any of his maximalist goals. Yesterday, Taco had a meltdown in the US Senate, going at it with a Senator like two parties in a divorce:

      https://thehill.com/newsletters/morning-report/5939845-donald-trump-senate-gop-divisions-save-america-act-housing-bill/

      The meeting ended up being even more explosive than some thought it would be, as Trump and Sen. Bill Cassidy (R-La.), who was defeated this spring by a Trump-backed opponent in a GOP primary, engaged in a yelling match over the Iran war.

      Chickens are coming home to roost, as blowback from the “revenge tour” mounts and all his past lies catch up with him.

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      1. Rolf

        Chickens are coming home to roost, as blowback from the “revenge tour” mounts and all his past lies catch up with him.

        Man but those chickens can’t arrive too soon!

        Reply ↓
        1. ChrisFromGA

          Bwawk bwawk bwawk!

          https://thehill.com/homenews/campaign/data-nerds/5940157-donald-trump-approval-rating-democratic-socialists-primary-wins-live-discussion/

          Donald Trump’s approval rating plumbs new lows, even after the MoU and 60-day ceasefire.

          https://mishtalk.com/economics/senate-unanimously-votes-for-19-day-recess-after-heated-trump-meeting/

          Senate responds to Taco’s meltdown by going on recess. See you in late July, Don! No FISA renewal, no SAVE act, you get nothing.

          Reply ↓
  8. Kilgore trout

    Is the dithering and uncertainty going on merely a prelude to yet another eventual attack on Iran by Israel and the US? The “normalcy bias” of the US is strong, as in “can’t believe energy stocks will really fall off a cliff, and cause a world-wide depression”, buoyed by the trickle of ships now leaving the SoH. In keeping with “never let a good crisis go to waste”, if the economy does fall off the energy cliff, and unrest ensues in the US, just declare martial law and call off the fall elections. Stephen Miller for one is probably salivating at the prospect. That’s the worst case for the callous and clueless Trump, whose moment of lucidity in agreeing to the MOU seems to have gone. Moving fast and breaking things has worked well so far for Trump and the oligarchs. The only thing that endures is the fact we are not “agreement capable” anywhere, not with Iran, not with Russia, not with China. The cast of characters in the US, and the West in general, is uniquely stupid and corrupt, and recklessly driving the world to the brink of economic collapse and world war 3. At the end of the day, there is no sanity clause.

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    1. Rolf

      Is the dithering and uncertainty going on merely a prelude to yet another eventual attack on Iran by Israel and the US? The “normalcy bias” of the US is strong, as in “can’t believe energy stocks will really fall off a cliff, and cause a world-wide depression”, buoyed by the trickle of ships now leaving the SoH. In keeping with “never let a good crisis go to waste”, if the economy does fall off the energy cliff, and unrest ensues in the US, just declare martial law and call off the fall elections. Stephen Miller for one is probably salivating at the prospect. That’s the worst case for the callous and clueless Trump, whose moment of lucidity in agreeing to the MOU seems to have gone. Moving fast and breaking things has worked well so far for Trump and the oligarchs.

      Yes. Alastair Crooke describes the difficulty in maintaining the integrity of the “de-escalation framework” (a term he prefers to MoU or agreement) as the fraught phrase of the current process. From experience, he describes the inevitable salvos launched by counterparties, “Oh they’ll never stick to this, they always cheat, they broke the ceasefire first! “ that derail things before any real binding agreements are available. But thus far Iran has been fairly consistent and measured, responding in one voice; it has been the US and Israel playing good cop/bad cop (or more accurately, emotionally unhinged cop/satanic cop) that have introduced more and more uncertainty, either through Trump’s typical reneging, strong-arming, and Israel’s murderous attacks in south Lebanon, or the empty amateur hour palaver from JDV or Rubio, that are derailing any real progress.

      Yves has said in the past that she doubted any real agreement would take place, and given the current mess is this not where things are headed? Iran is clearly sensitive to its standing with respect to the RoW, and does not want to be seen as the mercurial aggressor. Is Iran waiting for renewed attacks by Israel or Trump? Will it take Iran really clearing its throat with respect to Israel, making it crystal clear they are deadly serious about Lebanon?

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      1. juliania

        Thank you for “… the US and Israel playing good cop/bad cop (or more accurately, emotionally unhinged cop/satanic cop)…”

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  9. farmboy

    Laman
    @LVision_Trading
    ·
    16h
    HORMUZ | June 24 ducklings count

    ⏩ 9 out (~13.8M bbl laden capacity, 11M of which is UAE)
    ⏪ 2 in (~2.8M bbl ballast capacity, 2M Iran, 0.8M UAE)

    TREND: Incoming ballast capacity is by a factor lower than evacuation. Not many want to come back to jail indeed.

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  10. Gretzn

    Iran was stupid to assume that they could team up with Oman just because Oman tried to stay out of the war.
    Rational selfinterest doesn’t make them reliable allies.

    Frankly, the way things are developing Israel or the US bombing some iranian schools might be the best thing that could realistically happen, putting the hardliners firmly back into the drivers seat.

    Which is only a question of time anyway, but it would be better if it happened sooner rather than later.

    Well, the Supreme Leader did sorta lay the groundwork for putting the blame firmly on the appeasement faction and they did establish that they would eventually strike Israel over Lebanon.

    They already should have done that or at least not wait much longer, the longer they hesitate the less believable it looks that Lebanon was indeed the reason.

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  11. Samuel Conner

    According to the insider contacts Michael Wolff says he is in contact with (6/23 edition of the “Inside Trump’s Head” podcast), more than half of DJT’s working time is taken up with The Reflecting Pool. Something went wrong with the repainting and it has become a humiliating algae bloom. (With the change from a “gloss” to a “matte” texture water surface, perhaps one could for the time being dub it “Diffusing Pool”.) Over budget and needs to be redone. And July 4 is near.

    I’m not sure whether to be relieved that he is preoccupied with something that is relatively insignificant, or worried about who it is who is actually making Iran-related policy while he frets over this. Perhaps I should be both.

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    1. motorslug

      It’s not insignificant to the ducks and other visiting critters.
      One duck’s life is worth 100 congress critters.

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  12. Safety First

    The other day, the Daily Telegraph – yes, I know – published a story, which I cannot access, but which Pars Today re-summarized on its Telegram channel. I cannot recall if it were mentioned here, but the basic idea was a claim by an anonymous White House source definitely absolutely certainly not named Rubio that right now the goal is to drag the Iran negotiations out until the midterms, and then, once those are over, resume the kinetic war, only “bigger and better”.

    That Pars Today is reprinting this suggests that the Iranian government is, at the very least, well aware of said fact, AND wants its citizens (the readers of Pars Today) to also be aware. And people like Khamenei (the Second) have, in public statements, been skeptical of negotiations with the US to begin with. Which leads me to think that either a) the Iranians needed an operational pause, and this was as good a chance to get one as any, or b) Chinese pressure to negotiate was so great, the Iranians felt they had to show Beijing that this dog won’t hunt. Or both, possibly.

    In either case, the next few weeks or months will probably be filled with daily statements and counterstatements, but in reality nothing much should change, and eventually we’ll be back where we had started – a closed Strait and renewed blockades-of-blockades and kinetic strikes. And I have to believe the Iranian government understands this, at least collectively. As does Israel, which is probably part of why it isn’t even beginning to budge on the Lebanon issue.

    Meanwhile, it strikes me as awfully coincidental that Oman issues its Strait-is-open statement something like a day after a big Iranian visit to Oman with a lovey-dovey joint communique on the Strait. In other words, unless the Omanis decided to so openly stab the Iranians in the back, today’s announcement might have been a choreographed step – “officially” Iran maintains its position of controlling passage through the Strait, but unofficially there is a second route that skittish shipowners can use to get tankers with switched-off transponders in or out – FOR NOW. From Iran’s standpoint, this makes sense only if they expect the war to resume, and the Strait to close, within the next, say, 60 days, for which time they are not gathering tolls anyway per their own announcement. Let as many ships flow for now, letting China replenish its stocks or whatnot.

    I mean, it has to be either that, or that Oman in the space of 24 hours suddenly decided to completely reverse its relationship with Iran. In which case Iran needs to visibly sink a couple of tankers in Omani waters (cutting traffic back and likely upsetting not just the Omanis, but also the Chinese), or risk a very public loss of face.

    Final point. While all this is going on the Russians are observing how the American side is handling the negotiating process, so all this nonsense from Trump, Vance, etc. is doing nothing to convince them there is a chance of an actual workable agreement with Washington – except via force of arms. Of course, it also doesn’t help that literally in the last two days both Negrea at the UN and Levin at the State Department have made public statements along the lines of Ukraine is winning, drone strikes are working, Russia is, quote, running out of time to make a deal, etc. But in any case, there seems to be growing dismay in Moscow (as far as can be told from the news) at where this process is going, and what that means for diplomatic solutions to anything in general…

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    1. Yves Smith Post author

      I normally very much like your comments, but did you get out of the wrong side of bed?

      This is a wild misreading. It seems to reflect you having a large emotional investment in Iran winning.

      I have been following the Iran-Oman matter somewhat attentively since it is pretty well covered in Aljazeera’s live feed and not on Twitter.

      OMAN NEVER ONCE agreed or even hinted it was receptive to the idea of operating the Strait of Hormuz jointly with Iran.

      Oman is not a member of the Axis of Resistance and there is no reason for you to expect it to side with or support Iran. Oman interestingly is neither Shia nor Sunni, with its dominant Muslim group Ibadi.

      I recall reading Iran’s regular assertions that it would run the Strait of Hormuz with Oman when Oman had never never never said anything of the kind as offensive, on the order of a high school boy saying a girl was dating him when she hadn’t even returned his calls.

      Oman finally did accept an in-person meeting in Oman, before the one you mentioned, IIRC about three weeks ago. My impression was it did not go well for Iran because Oman said nothing. The Iran official did make a public statement (or at least talked to Aljazeera) but it was all aspirational hand-waves. At the time, I thought it would be offensive to Oman as 1. speaking out of school and 2. seeking to create the impression that Oman was getting on board with the Persian Gulf Authority when nothing of the sort had happened.

      Indeed, if anything WERE going ahead, you’d expect both sides to keep it totally secret until their understanding was concluded and signed so as to prevent interference while negotiations were underway.

      Moreover, Oman clearly signaled its intention to allow transit passage by doing just that during the war. Remember all that braying by Trump about the 100 million barrels of oil that had gotten out before the MOU? That was likely an exaggeration but not a fabrication. Ships had been running out of the Gulf on the Oman side with their transponders off with some success. I imagine Oman could have interfered if they wanted to, since many of the ships would have been visible from shore, by giving Iran a heads up.

      Reply ↓
    2. Yves Smith Post author

      And a different take on sequencing:

      Oman set up its transit channel with the International Maritime Organization, a UN body.

      I cannot this initiative was or could have been kept secret. So Iran had to have known it was underway.

      So the day-before meeting looks like an Iran last-ditch effort to talk Oman out of it.

      Reply ↓
  13. farmboy

    freed capital is going short oil
    Macro Alpha
    @MacroAlphaHQ
    ·
    33m
    Everyone is obsessively tracking the 70 vessel crossings in the Strait of Hormuz today like a maritime heatmap gives them a fundamental edge.

    You are staring at satellite blips while remaining completely blind to the COLLATERAL SWEEP happening underneath.

    Working through the clearinghouse logic here…

    The ceasefire holds. The physical bottleneck clears.

    Which means the exorbitant war-risk margin embedded in forward freight agreements entirely collapses.

    So what happens to the billions in excess capital that prime brokers were forced to lock up against Middle East tail-risk?

    Actually, wait… if that margin requirement suddenly drops from peak levels back to a peacetime baseline…

    You get an instantaneous un-trapping of institutional liquidity that was structurally frozen in the energy derivative complex.

    They are not rolling that freed capital into physical spot buys.

    They are sweeping it directly into short-duration paper to clip the yield.

    You have been trading the geopolitical headline, trying to buy shipping equities on a volume-recovery thesis.

    But the real wealth transfer is the IV CRUSH on all those worthless tail-risk call options the street sold you last month.

    So who exactly is the marginal bid for
    $USO
    when the paper market realizes the forced margin backstop is gone?

    Reply ↓
    2. motorslug

      Not sure if I’m misreading what you’re saying, it occurred to me that lots more ships are heading out but still very little if any heading into the straight. Perhaps Iran is making trumpy-ish noises while not really putting it’s foot down.
      Seems this would appease China and give a little breathing room to Asia, clear the bottleneck of innocents out of the actual danger areas, reduce spot prices briefly and calm some jitters.
      Then when Iran decides to actually stomp it, like a huge wave coming after the water gets sucked off the beach, fear and panic will engulf the manipulators?

      Reply ↓
  14. Mathman

    From what I understand Trump is wrong about the 4 weeks and it’ll be quite a bit longer before real pain as more oil has “escaped” the strait than is being reported. That all being said is Trump getting away with signing a MoU that looks like a surrender and then just not following through on any of it?

    Reply ↓
    1. Yves Smith Post author

      That is not what executives at Enron and Chevon said. They were if anything earlier than Trump, maybe based on Cushing.

      But the expert consensus (based on a lot of messy data) was mid July to early-mid August. Getting the oil trapped in the Gulf out will push realization back another week to ten days.

      Reply ↓
    2. Lefty Godot

      But where has the oil that has “escaped” been getting delivered? Relief for Trump would require it going to Europe and North America, but it isn’t clear to me that the deliveries are for those importers versus Asian ones.

      Reply ↓
  15. Tom Stone

    Both Trump and Netanyahu are old and in poor health, if either leaves the scene via death or illness it will change the dynamic in interesting ways.

    Reply ↓
  16. Eclair

    One tiny, local (Warren County, Pennsylvania) data point on petroleum derivatives shortages:

    My Amish friend L, lights with kerosene lamps and, in the summer, uses a small kerosene single burner stove for cooking and some preserving. She keeps her kerosene supply on the porch, in a 42 gallon steel barrel with a pump on the top.

    She told me yesterday that there is no kerosene available for domestic purchase from her usual suppliers.

    Reply ↓
    1. thoughtfulperson

      Interesting anecdote. I listened to the two crude oil shipping related links above from Mario earlier today.

      One point was important to look at number of ships actually loading oil, not just the ones escaping.

      Point two was more related to your anecdote. One interviewee stated that demand destruction had been much bigger factor than analysts expected. Particularly in Asia I guess. Lack of availability led to demand destruction, not higher prices!

      Additional point was China likely released a good bit of their reserves, and reduced purchases quite a bit, also decreasing pressure on prices.

      Anyway, looks like lack of availability has arrived for kerosene in PA…

      Reply ↓
  17. Ann

    0710 PDT

    Israel, Lebanon deny that Israel has withdrawn from part of southern Lebanon

    https://www.reuters.com/world/middle-east/israel-withdraws-part-southern-lebanon-buffer-zone-us-state-department-official-2026-06-25/

    Trump Blurts Out Plot to Rig Midterms So Vile It Even Shocks GOPers

    https://newrepublic.com/article/212313/trump-blurts-plot-rig-midterms-vile-even-shocks-gopers

    Pakistan’s Balochistan province desperately needs the world’s attention. The atrocities and human rights violations committed by the Pakistani government and army are beyond measure. A Baloch genocide is unfolding, and there is no free press in Pakistan to expose what is happening in Balochistan.

    https://www.firstpost.com/world/you-cannot-imprison-the-truth-greta-thunberg-calls-for-mahrang-balochs-freedom-after-life-sentence-in-pakistan-14025682.html

    A million AI satellites in orbit? Elon Musk says Starmind is coming

    https://www.indiatoday.in/technology/news/story/spacex-starmind-ai-satellites-elon-musk-space-based-computing-2933440-2026-06-24

    India Set to Approve Geely-Backed Investment as China Ties Thaw

    https://www.bloomberg.com/news/articles/2026-06-25/india-set-to-approve-geely-backed-investment-as-china-ties-thaw

    Oil tankers navigate the Strait of Hormuz despite threats from Iran’s Revolutionary Guard

    https://apnews.com/article/iran-us-israel-war-hormuz-strait-june-25-2026-862164c2aecbdc376dea434198eaf75f

    US says technical talks with Iran to take place in Switzerland

    https://www.swissinfo.ch/eng/foreign-affairs/according-to-the-us-secretary-of-state-the-us-and-iran-are-planning-a-meeting-in-switzerland/91646519

    Switzerland begins talks with Israel and others for second air defense system

    https://www.jpost.com/defense-and-tech/article-900470

    Iran declares new Hormuz route ‘unacceptable and dangerous,’ warns against ships transiting without approval

    https://www.cnbc.com/2026/06/25/iran-navy-shipping-recovery-strait-of-hormuz-unauthorized-routes-us-fragile-mou-.html

    Israeli former leaders and security chiefs threaten legal action over ‘Jewish terrorism’

    https://www.theguardian.com/world/2026/jun/24/israeli-former-leaders-security-chiefs-legal-action-jewish-terrorism-west-bank

    Trump says it may never be known who was at fault for strike on girls’ school in Iran

    https://www.reuters.com/world/trump-says-it-may-never-be-known-who-was-fault-strike-girls-school-iran-2026-06-24/

    Reply ↓
  18. hamstak

    [RT] Italy contradicts NATO’s Rutte on US warplanes

    In an interview with Fox News…Rutte claimed that Italy alone accounted for 500 of the 4,000 to 5,000 US military sorties launched from European bases in support of Operation Epic Fury.

    The Italian military said on Wednesday that its role was limited to “technical and logistical, non-kinetic activities,” and was therefore fully in line with the Italian Constitution and the parliament-approved conditions governing US use of military bases in the country.

    Reply ↓
    1. lyman alpha blob

      Those are some weasel words from Italy. Clearly “technical and logistical, non-kinetic activities” constitute “support” of Operation AIPAC Fury. Are they seriously trying to claim to the world that they did not in any way allow US warplanes to launch bombing runs directly from Italian territory, they merely transported US military personnel and spare parts to bases in other nations from which the US could then launch attacks against the Iran?!?? It’s a distinction without much difference for those on the receiving end of the munitions.

      Reply ↓
  19. mrsyk

    My impression is that time is on Iran’s side. Iran gets to export oil which should help ease the economic pain. Iran looks to be at an advantage at “rearming”. Meanwhile, the US faces the strong possibility of going over the oil cliff within the 60 day deadline. There could be civil unrest here at home.
    It seems baked in that Iran will eventually control the strait. And all this wailing and screeching over tolls from the officialdom, lol.

    Reply ↓
    1. fuller bull

      There could be civil unrest here at home
      Really? blatant fear mongering is a allowed on this site not surprised

      Reply ↓
      1. mrsyk

        That’s neither blatant nor mongering. The foundation is laid. It’s called extreme wealth inequality. On top of unaffordable living conditions add a heatwave and some ICE “enforcement action” in the local poor neighborhood. Then toss in oil cliff economic destruction.
        Sleepwalk at your own risk.

        Reply ↓
  20. KD

    Strategically, long-term there is nothing in the MOU for Iran other than the option to monopolize the Strait of Hormuz. Everyone knows the $300 billion is flim-flam, I guess they are getting some temporary sanctions relief and they have some oil moving out, and the US is not bombing.

    If you are Iran, it would make sense to ship as much product out as you can for a month or so then shut the Straits down again on grounds that Israel is in violation of the ceasefire, IEAE nonsense, failure to release the $24 billion, etc. That would either blow up the MOU or force more American capitulation. Plus it would give Iran time to figure out some plausible rationale why Oman is out of consideration of the proposed joint partnership.

    Reply ↓
      1. KD

        ??? Isn’t that what I said? Iran should milk sanctions relief for awhile, then blow things up as the world starts walking off the oil cliff? Certainly, they better be sure to overturn the apple carts before the midterms. They would be fools to let the Americans stabilize the oil market, hold the midterms and then have the US attack them again . .

        Reply ↓
  21. Tom Stone

    Trump has become increasingly erratic, what happens when his stress level goes through the roof as his magnificent plans turn to ash?
    Some, including myself, believe that Trump is showing signs of serious cognitive decline.
    Derangement, in a word.
    The Oil cliff is real, the War is not going to plan, inflation has started in essential goods and will get a lot worse.
    Which means higher interest rates, Warsh is going to regret taking that job if he hasn’t already.
    The reflecting pool may be the final straw, a very visible reminder Trump’s failures.
    Which is why he is obsessing about it.

    If Trump were an ordinary old Man his relatives would have taken away his car keys Months ago and hired a large, very calm male nurse to keep him from harming himself or others.
    Instead he has Laura Loomer.
    As it is, he is likely to act with a degree of angry recklessness that is frightening to contemplate, he has no filters, no brakes and no reverse gear.
    It’s going to be a lively Summer

    Reply ↓
  22. Socal Rhino

    Looks like I nuked a comment I was writing.

    Short version: Iran’s original threat was to close the strait, not talk with Oman about closing it. They started to make postwar moves but the war is still on, and is existential for them. They will remember that and prevent passage through Oman’s waters, citing US non compliance and/or continuing acts by Israel. IMO.

    Reply ↓
  23. Timmy

    Bloomberg is reporting that several vessels, including two oil supertankers, have turned back from using a US protected route along Oman’s coastline. The report cites two maritime intelligence companies published broadcast that purported to be from the Iranian navy instructing ships not to cross. There was also a report of a vessel hit by an unknown projectile in the strait.

    The Bloomberg report is time-stamped at 10:48 am EDT and updated at 11:27 am.

    As noted here frequently, you don’t need actual conflict to reduce the number of ships that will take the risk of an exit from the Gulf.

    Reply ↓
  24. motorslug

    Apologies if this has appeared already, but what’s the difference between Dardanelles and Hormuz? Why can Turkey charge fees (upped to 15% IIRC) but Iran cannot?

    Reply ↓
    1. lyman alpha blob

      Thanks – I also am confused and just looked up a couple articles and was about to ask the same thing.

      This one notes that Turkey has been increasing fees on an annual basis since 2022 – https://gmk.center/en/news/turkey-raises-the-fee-for-the-passage-of-ships-through-the-bosphorus-and-dardanelles/

      This one is written by a Bahraini economist with Western ties who has an obvious anti-Iranian bias given recent events – https://omareconomics.substack.com/p/the-illogicality-of-charging-tolls

      He notes that manmade channels like Suez and Panama canal can charge fees in order to maintain the canals, but natural ones should not. OK I suppose. But he also mentions Turkiye and the Dardanelles fees and justifies that by saying that those are just for tug services, etc. Might it also be because those fees are largely charged to Russian ships? I don’t know if that’s the case or not, just speculating here. And is there some reason why tugs are not needed for ships going through the Strait of Hormuz?

      The more I read about this issue, it starts to seem like only one nation shouldn’t be allowed to collect any fees for passage through its territory. Iranians need to be sure they don’t get played for a bunch of chumps here. There are all kinds of ways around “international law”, which isn’t worth a bucket of warm spit these days anyway. There is no reason whatsoever that Iran should have to allow the free passage of materials through its territory to be used by nearby enemy nations out to destroy it.

      Reply ↓
    2. hamstak

      One political-geographical difference — the territory through which the Dardanelles Strait passes is entirely the domain of a single sovereign (Türkiye), as is the case with the Panama and Suez canals. Iran borders only one side of the Strait of Hormuz. What the international legal implications of that are, I have no idea (and am too lazy to investigate), but would have to imagine it is relevant.

      Reply ↓
      1. hk

        This is why I wonder about the situation vis a vis Gulf of Finland. Gulf of Finland is narrower (17 rather than 21). So can Finns and Estonians blockade St Pete “legally” after all? Unlike Omanis, both Finns and Lesser Finns want to pick a fight with Russia.

        Reply ↓
        1. ISL

          And such a blockade would be seen as a legitimate cause for war. Notably, unlike Iran, those two have no means to impose their will on their enemy (Clausewitz).

          I think the Finns and Estonians want NATO to pick a fight with Russia, with them positioned in the rear (while yelling out insults and blowing spitballs).

          Reply ↓
      2. motorslug

        That was my first thought also and maybe why. Apparently Turkey never signed UNCLOS either which makes Iran’s attempts even trickier as they share with Oman who Yves has pointed out did sign.
        As Lyman mentioned, I totally understand the canal situation as those are more akin to internal waterways and not natural passages anyway. But tugs aren’t needed in Hormuz, at least not in the middle-ish.

        Reply ↓
        1. Laughingsong

          They are needed in the Dardanelles, as the surface currents flow towards the Aegean. Black Sea- bound vessels need the assistance.

          Interestingly there is a deep current, arguably faster, going the other direction towards the Black Sea. Ancient mariners knew about it and would deploy their anchors into it, so that the anchor would drag them:

          https://www.chantrou.net/post/f-54-no-sea-anchor-no-troy

          Reply ↓
    3. Polar Socialist

      Because those fees Turkey is charging are based on the Montreux Convention from 1936.

      The traffic lanes also go trough Istanbul with plenty of bridges and crossing traffic. There are a lot of limitations on when one can pass trough and how, pilotage is required for vessels over 150 meters LOA and so on and on.

      Reply ↓
    4. thoughtfulperson

      [I see Polar Socialist posted about the Montreux convention. Perhaps someday soon there will be a similar one regarding Hormuz.]

      Perhaps another case of double standards similar to Iran selling crude oil (the audacity, they should be sanctioned), or having enriched uranium (the audacity, they might build a bomb like Pakistan, India, Israel or the u.s. etc, they should be bombed!) or having missiles etc etc

      The material issue seems to mostly be having a lot of oil *and not letting western firms control it*. Sovereignty – they have the audacity to think that have Sovereignty. Perhaps that is it.

      Reply ↓
  25. SantiagoB

    FWIW Iran reportedly just struck a vessel transiting the Oman passage channel. Reported by UKMTO at 1410UTC.

    Reply ↓
  26. farmboy

    click thru to map! Oil Bandit 🛢️
    @OilCfd
    ·
    2h
    On the “mini” oil-glut:
    There’s nothing “mini” about it, we are trading past Hormuz, Sept/Oct deliveries.. nothing is moving, and tanker people isn’t making things easier either.
    China was a solution, now it’s becoming a problem.

    Reply ↓
  27. Sunlight Disinfects

    Given USA/Trump has now said that they will not return Iran’s frozen funds in cash but only in US farm goods, it seems likely that USA/Trump will want to do something similar the $300 billion reconstruction fund.

    How many Trump hotels/resorts can Kushner build with $300 billion?

    (just a humorous hypothetical)

    Reply ↓
  28. Es s Ce Tera

    Just a comment on the shallowness of the Omani side of the strait. The nautical charts don’t show it shallow on either the Omani or Iranian side of the wider sections, but the Iranian side does have shallow sections and shoal which extends from shore. The shallowest I could see on the Omani side was 27 fathoms or 162 feet.

    It seems a loaded VLCC or ULCC would displace 75 ft to 100 ft.

    I hadn’t noticed this before but it looks like the the narrow path between Larak, Qeshm and Hormuz islands are indeed nearing the shallow end of the pool at spots, nearing 20 and 21 fathoms (120 and 126 feet). A captain would need some very precise maneuvering to thread that narrow gap, would be watching that depth sounder closely with only 20 feet of wiggle room under the boat. Whereas the water is unquestionably deeper almost everywhere closer to the Oman side.

    But I wonder if the ships traversing closer to the Omani side aren’t doing so out of consideration of the politics or the military situation but simply because it’s vastly easier and possibly more direct and fuel efficient to navigate closer to Oman.

    The chart I used: https://fishing-app.gpsnauticalcharts.com/i-boating-fishing-web-app/fishing-marine-charts-navigation.html#9.74/26.8765/-303.7420/-0.8

    And such is the state of the enshittified world that I went looking for some antique 1945 British Admiralty charts just to check against the possibility the digital charts are being messed with.

    Wartime admiralty chart: https://www.geographicus.com/P/AntiqueMap/persiangulfentrance-admiralty-1945

    Reply ↓
  29. elkern

    IMO, Iran was able to get away with closing the Straits of Hormuz *without pissing of China and the RoW too much* because everybody recognized that it was the only way they could fight back against the USA. As long as the US doesn’t return to actively attacking (or blockading) Iran, Iran will face ever-increasing pressure to allow traffic through the Straits to steadily improve. They can get away with slow-walking it, to a point, but the longer that goes on, the more it looks like Iran is just squeezing the World to increase their own power.

    The power to close the Straits gives Iran some leverage over the USA, but not over Israel. It is obvious that US leverage over Israel is limited (indeed, the lever tends to work the other way), so Iran will eventually have to scale back its expectations of using the Straits to change Israeli behavior. OTOH, this stupid war may have broken the US/Israel relationship to the point that Iran might get away with attacking the IDF in Lebanon without direct US reprisals.

    Other parts of the MOU are also “na ga happen”, most notably the $300B Reparations, which would require Congressional funding (hahaha) or a bailout by the GCC which does not appear likely. The fact that we “should” pay Reparations for everything we bombed is sadly irrelevant.

    I figure that Iran knew that many of those points in the MOU were “aspirational” at best, and pushed for them with the knowledge that they’d have to back off on them later (and hoping they could trade those chips for leverage on higher priorities).

    IMO, Iran will ultimately have to settle for more limited improvements in its position:
    – an end to US/Western sanctions, starting with Shipping but ultimately including everything else
    – unconditional release of the $12B [illegally] held by Western banks
    – US forces removed from Iraq, and maybe one/some GCC (and maybe Syria?)
    – low but useful “tolls” on (GCC?) Shipping through the Straits, but not called “tolls”
    – promises (hahaha) that the USA won’t attack Iran again

    Reply ↓
    1. Sunlight Disinfects

      The power to close the Straits gives Iran some leverage over the USA, but not over Israel.

      True.

      It is obvious that US leverage over Israel is limited …

      No. US has great leverage, they’re just very reluctant to use it.

      … (indeed, the lever tends to work the other way).

      That’s a separate lever!

      … so Iran will eventually have to scale back its expectations of using the Straits to change Israeli behavior

      Control of the Straits has other benefits also.

      … this stupid war may have broken the US/Israel relationship …

      “May have” … but not likely. They went to war together and are working to fashion a peace to their liking … together.

      low but useful “tolls”

      Any sort of control of the Straits by Iran is rejected by USA.

      IMO, Iran will ultimately have to settle

      More likely that they simply impose their control of the Strait and dare USA to do something about it. And they charge high fees to make up for what they don’t get because the MOU process failed.

      Reply ↓
    2. amfortas

      yeah with the Omani thing(and theyre a strange bunch, i looked into both them and their Ibadi Islam a month or more ago…do look it up)…as well as what you enumerated …Iran will simply hafta acquire a nuke, ala North Korea.
      then everybody else will get a few, and we’ll have detente/deterrence.
      and i reckon that thats when everybody finally is able to leave the usa behind.

      look at NK, today…Kim doesnt give a shit what trump says,lol.(and Juche is interesting,lol…even accounts for the hardship and repression better than Mao did, and look how that turned out(ie:process))

      Reply ↓
    3. urdsama

      Strongly disagree.

      China is going to be loathe to push Iran too far as things in Taiwan are going to heat up over over the next few years. I doubt they want to put themselves into a position where they have to worry that Iran is looking for an opportunity to extract some concessions from China later on based on current treatment.

      Russia is likely to take a more family blog the West if you need to approach (without saying it of course) as the US and NATO appear to be be ramping up drone warfare options as a way to break Russia.

      Within Iran there is already the sentiment that the government has been too forgiving toward the US and Israel. This may push the more hardline elements in the government to the front and change the overall stance towards negotiations.

      Increased environmental issues and the fragility of AI (in terms of its dependency of power) has a far more powerful effect on western leaders to “just get the damn deal done”, and almost none on Iran.

      To be clear, almost anything is possible in such a chaotic environment, but I think one can make just as many arguments for why Iran will continue to hold all of their red lines as for why they would need to abandon them.

      And one final thought – in many ways nothing has changed except for the amount of pressure on Trump and the US. Even if they don’t know it.

      Reply ↓
  35. Acacia

    Oil Rebounds as Tanker Incident Sparks Fears
    https://www.tradingview.com/news/te_news:561971:0-oil-rebounds-as-tanker-incident-sparks-fears/

    Crude oil rose nearly 2% to $71.6 a barrel on Thursday as traders monitored shipments through the Strait of Hormuz after a cargo ship was struck by an unknown projectile off the Omani coast. Reported by the maritime group UKMTO, the incident renewed safety concerns regarding the vital shipping corridor and fueled anxieties over Iran dictating transit while negotiating a permanent end to its war with the US. Several commercial ships reversed course, threatening the normalization of regional oil flows.

    Reply ↓
    1. amfortas

      this sort of “whodunnit” is all its gonna take to close the Strait, henceforward.
      apparently the ISR in the area is considerably degraded…as there’ve been numerous attacks where one faction sez, “they did it”, and the accused denies…and we never hear about it again.
      i guess all those usa radars were important?
      reapers?
      awacs?
      so figger that into the question of Oman’s “Safe Corridor”…and who has the Right.
      Muad Dib Rules, now.

      Reply ↓
      1. Acacia

        this sort of “whodunnit” is all its gonna take to close the Strait, henceforward.

        Yep. One stray RPG in the “wrong” hands.

        Iranians just shrug and give a very faint, ambiguous smile.

        …as the oil cliff creeps closer and closer.

        Reply ↓
  36. Jesse

    Looks like Iran has asserted its control: NY Times headline “ Iran Strikes Ship in Strait of Hormuz, Undermining Efforts to Restore Traffic”

    Reply ↓
    1. Ben Panga

      Now it gets interesting.

      UKMTO report

      UKMTO WARNING 074-26 – ATTACK Report Date: 25 Jun 2026 Report Time: 1410UTC Source: Master UKMTO has received a report of an incident 7.5NM southeast of Dahit, Oman. A cargo vessel has been hit on the starboard side by an unknown projectile, causing damage to the bridge. Master has reported no casualties and no environmental impact.

      —

      I cannot think the IRGC will relinquish any real control of the Strait. It is their true trump card and source of leverage.

      Reply ↓
      1. John k

        My guess is that with trump welching on all terms has discredited iran’s soft liners. If so, the strait will remain closed, which will squeeze the west as we approach/go over the cliff. We might then then see increasing western unhappiness with Israel.
        If China is unhappy they’ll just have to grin and bear it.

        Reply ↓
      2. Es s Ce Tera

        If hit on the starboard side while exiting the strait, wouldn’t this mean the projectile came from the side of the ship facing Oman at all times during the traversal?

        Reply ↓

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