Three fronts and no off-ramp

Three fronts and no off-ramp

Paper markets continue to bite at de-escalatory headlines but the physical market is not buying it.

Commentary summary:

• Tuesday’s Hormuz deadline is the week’s major binary with Trump social media making off ramps now appear remote.

• USGC crude is the one barrel that clears everywhere, and TD25’s collapse has blown the arb wide open.

• Russia’s Baltic ports are resuming but degraded; 40% of Primorsk storage is gone and that doesn’t rebuild quickly.

As I write this Monday morning US AM hours the hopes of an offramp look bleak. US and Israeli strikes killing 25+ in Tehran overnight, the IRGC intelligence chief among them, Iran launching missiles at Israel, Kuwait, and the UAE in response, and Trump’s Tuesday deadline for Hormuz now less than 36 hours away with neither side showing any confirmed appetite for compromise.

Brent is at $108 at time of writing. There’s a ceasefire proposal on the table from Egyptian, Pakistani, and Turkish mediators for 45 days and calls for reopening of the Strait, but neither Washington nor Tehran has acknowledged.

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