Trump at a rally says they may do “another operation” against Iran.
We may do another little Epic Fury
We’ll take care of Cuba on our way back from Iran
The market is certainly betting that Trump is going to do something in the short term, which is why oil has been so strongly bid in the past two days.
Meanwhile, The IRGC Navy said in a statement Friday that two supertankers struck naval mines while attempting to cross what it called an unauthorized southern route through the Strait of Hormuz, causing explosions and fires. I’d take that with a grain of salt but we’re clearly in a paradigm that can’t last.
Of course, Trump said recently there would be no attacks before the midterms but I don’t imagine his credibility is too high on that front.
What’s a bit of a giveaway is that a “little Epic Fury” is what’s been rumored, including some strikes on missiles sites, Pickaxe moutain, and infrastructure. There are even signs it’s been telegrahed. I ultimately think this could be an attempt at a face-saving move from Trump. Afterwards, he could declare victory again and maybe there’s a deal to be made to open Hormuz.
Of course, there are two parties at war and it all depends on what Iran wants next. They have hinted at massive retaliation but they’re just as prone to exaggeration as Trump. Where I’m optimistic is on the signs that Trump has told everyone already that this is coming, including the Russians who were said to evacuate today. So by Monday this could be wrapped up and oil prices could be headed back lower.
For now though, the market is entirely pricing in the escalation with WTI up $4.21 to $103.74 and brent at the highest since May at $117.27.
This article was written by Adam Button at investinglive.com.
