Scorched earth

Trump reiterated last night that the war in Iran would be over soon, and the IEA announced a release of 400m barrels, but oil ignored the headlines and is now higher. The market is coming to the realization that Iran will keep the Strait of Hormuz closed for an extended period of time, and that Trump TACOing out of this uncomfortable situation has no impact on how long it stays closed. Iran is going scorched earth and wants to inflict as much pain on the global economy as possible to send a message to its enemies to not f**k with them.

A few military developments in the Gulf, none of which are good for risk assets and a short end to this war:

-Drone attack on oil storage tanks in the Port of Salalah in Oman, opening up a new front in the war.

-More tankers attacked and damaged

-Iran has laid sea mines in the SoH

-No Navy escorts of ships happening anytime soon

Meanwhile the flood of private credit redemptions continues unabated. It’s a slow motion train wreck that is impacting the availability of credit.