Trump is much better at manipulating futures than negotiating deals.
Friday morning the markets were abuzz with Trump’s announcement of a deal. The stock market and goal soared, and oil prices.
As usual thee past few weeks, the bond market moved little. The bond market had things right.
Strait Definitely Not Open
The Wall Street Journal reports Ships Attacked Near Strait of Hormuz After Iran’s Military Denies It Reopened
Commercial shipping in and around the Strait of Hormuz came under attack for the first time since the cease-fire between the U.S. and Iran, after Iran’s military contradicted declarations by the U.S. and Iranian governments that the strategic waterway had reopened.
Revolutionary Guards Navy Warns Ships It Will ‘Destroy’ Vessels Attempting to Cross Strait
The Islamic Revolutionary Guard Corps navy issued a vocal warning to ships, threatening to destroy vessels attempting to cross the Strait of Hormuz, according to a recording a shipowner received Saturday from one of his captains in the Gulf and reviewed by The Wall Street Journal. The shipowner said the vessel was acting on the warning, which told all ships that the strait is “completely closed again,” blaming the U.S. government.
“Attention all ships, regarding that failure of the United States Government to fulfil its commitments in the negotiations, Islamic Republic of Iran declares the Strait of Hormuz completely closed again,” the radio message said. “No vessel of any type or nationality is allowed to pass through the Strait of Hormuz,” it said, adding that any vessel attempting to do so between the stated locations “will be met with a severe response from the IRGC navy and will be destroyed.”
India’s Ministry of External Affairs said on Saturday it had summoned Iran’s ambassador in New Delhi after two Indian-flagged ships were fired upon in the Strait of Hormuz. India’s foreign secretary said it expressed “deep concern” over the incident. New Delhi urged Iranian authorities to swiftly resume measures ensuring the safe transit of ships, calling the attack a serious escalation. Iran’s ambassador said he would relay India’s concerns to officials in Tehran, according to the statement.
Meantime, The Iran Consulate in Hyderabad said Saturday, citing Fars News Agency, that a supertanker carrying about two million barrels of crude arrived off the Indian coast. The ship was last seen in Iran hours before the blockade, the post said. The delivery marks the third shipment in a week, bringing India’s total imports from Iran to roughly six million barrels, the consulate said in a social media post.
Iran’s Supreme National Security Council Discusses New U.S. Proposal
Iran’s Supreme National Security Council, or SNSC, is discussing new U.S. proposals for a peace deal, the country’s state television said Saturday. “Iran is currently considering the proposal but has not yet responded,” the statement by the council said, according to the report. Talks between the two sides could take place on Monday in Pakistan, according to mediators.
Iran is determined to continue to control the movement of ships in the Strait of Hormuz until the end of the war and the establishment of a lasting peace, the statement added. Iran’s military said Saturday that the strait was back under its control, adding to the uncertainty and prompting ships waiting to cross to turn back.
How Much Oil Does Iran Export?
As the U.S. seeks to enforce a blockade on Iranian exports and potentially board Iran-linked ships outside the Middle East in the coming days, the country faces a significant revenue hit if the crackdown proves successful.
Iran exported billions of dollars worth of oil in recent months, accelerating its shipments ahead of military action by the U.S. and Israel. Iran exported an average of 1.84 million barrels a day in March, according to data from Vortexa, and 2.15 million barrels a day in February. That’s about 38% higher than in December 2024, according to data provider CEIC.
A Massive Lie
Friday morning, I posted Iran Announces the Strait Is Fully Open, Oil Prices Plunge, Stocks Soar
Iran War Questions
Trump started this war on February 28, 2026.
Will this deal be any better than what Iran offered prior to the war?
Will this deal be any better than what Obama negotiated in 2015?
I believe will will soon have answers. However, the damaged infrastructure will still take years to repair.
I welcome a deal. But how good is it, and at what price to what was possible three months ago?
Trump chose war and much infrastructure in the region will take years to recover.
The stock market cheers (S&P up 1.2 percent), so does gold (up 1.8 percent), silver (up 5.5 percent), bitcoin (up 5.5 percent).
WTIC, US oil plunged 13.5 percent to 82.33.
Yet, the 30-year bond yield is down only 1 percent to 4.88 percent. From an inflation standpoint, that’s the real tell that all will not be smooth sailing.
Nothing to Cheer
I did not think much about my headline until now. But It should have said “Trump Announces” not “Iran announces”.
Headlines similar to mine were nearly universal. But I apologize. I should have said Trump in my headline.
Of course, MAGA was crowing about the result, wanting to know why I wasn’t praising Trump. I didn’t offer any praise because there is nothing to praise.
Trump started a stupid war, both sides blew up things, and infrastructure was destroyed that will take years to recover.
Any deal is unlikely to be much if any better than the deal Obama negotiated or was on the table before this stupid war started. The world will be worse off because of the damaged infrastructure.
If Iran remains in control of the strait, we will all be much worse off even if Iran gives up its nuclear dust in return.
Today, it’s clear that Trump lied about everything. And Trump is negotiating with a much more hardline regime than the one it bragged about killing.
Looking Ahead
I don’t know where the futures open Monday. And no one else does either.
Maybe we have a deal soon and maybe we don’t.
So, I will repeat something I have said for weeks. It’s not clear what Trump’s goals even are. In contrast, Iran’s immediate goal is to punish Trump as much as possible regardless of what it costs them. Iran’s top long-term goal is remain in control of the strait.
In terms of punishing Trump, delays suit Iran just fine.
Brilliant Blockade?
I keep reading on X how brilliant Trump was to block the strait. Allegedly, it’s all part of Trump’s master plan.
But why not this path in the first place? Instead we have huge infrastructure damage everywhere.
None of this was planned. Trump makes things up as he goes.
And how brilliant is it to have Iran blocking all non-Iran traffic with Trump blocking the rest? Essentially no oil will get through. That’s a supply disruption of 2.15 million barrels a day. Declines in oil futures won’t last in this stalemate.
Trump cheerleaders say the blockade will force Iran to accept Trump’s deal. But what deal is that? Trump lied about the deal Iran accepted.
This reminds me of how sanctions were supposed to destroy Russia, but didn’t.
Reflections on Regime Changes
Other than boots on the ground, there have been no successful regime changes ever. In this case, the killing all of Iran’s top leadership resulted in an even tougher regime to deal with.
Sometimes regime changes don’t work even with boots on the ground. We spemt trillions and trillions of dollars in Afghanistan. Guess what? The Taliban is back running things.
Meanwhile, all we really have from Trump is lies. Before the war started we heard the exact same lies. “Iran is ready to deal”.
Iran will never be ready to deal if Trump keeps insisting on terms no nation could accept.
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Article posted with permission from Mish Shedlock
