A cock and bull story
Iran, the Red Sea, the South China Sea, Ukraine, Russia, and supply chains.
Hello,
Here are the five things you need to know today:
IRAN. The market gets ahead of the next game of chicken.
RED SEA. Tehran promises blood, sweat and the Gate of Tears.
SOUTH CHINA SEA. More than two can play at maritime blockades.
UKRAINE. RUSSIA. Moscow rushes to exercise its waning leverage.
SUPPLY CHAINS. Gulf ripple effects begin to make waves.
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IRAN. Before they hatch
The market gets ahead of the next game of chicken.
Asian markets rose after the S&P500 hit fresh records on hopes for further talks to ease Tehran's blockade. Donald Trump said China was “very happy” and the leaders of Israel and Lebanon would speak for the first time in three decades.
INTELLIGENCE. Trump is signalling both the US and Iran will de-escalate. Talks between Benjamin Netanyahu and Joseph Aoun could lead to a ceasefire in Lebanon. Yet Aoun is not a combatant, and Hezbollah remains dug in. Iran is already talking to the US, but its requests are maximalist and have not yet budged. The Strait won’t magically open because everyone can learn to cooperate. War is zero sum. Trust is low. And each side continues to think it can win.
FOR BUSINESS. Markets have been jawboned to perfection. They may continue to rise, but they’re disconnected from reality, at least from the perspective of oil (crude has been more cautious as gaps in physical supply approach). Until Trump can obtain a face-saving win, or Tehran can reestablish strategic deterrence, there’s as many paths to escalation as the opposite. Trump has predicted “amazing days ahead,” but his new triumphal arch may need to wait.
RED SEA. Bab in the woods
Tehran promises blood, sweat and the Gate of Tears.
Iran's military said it would disrupt trade at the Red Sea if the US did not end its blockade at Hormuz. Israel appointed its first ambassador to the breakaway state of Somaliland a month after becoming the first country to recognise it.
INTELLIGENCE. The 16-mile Bab al-Mandeb Strait (“Gate of Tears” in Arabic), where