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Bloomberg: JPMorgan and Goldman See Mideast Oil Flows Near Pre-War Levels
Oil is passing coming through the Middle East again, at essentially pre-war levels. Some of this is from oil bypassing the Strait of Hormuz, and some of this is from oil transiting the Strait under American protection.
Diesel and gasoline are still stymied, but, mostly, because Iranian exports are being blockaded by the US.
But other Gulf States are increasing their own exports to compensate for the missing Iranian piece.
It appears that the Iranians are not capable of stopping exports from flowing through the Straits, and so oil exports are returning to normal.
Meanwhile, Iran seemingly wants to end the war, although none dare call it "surrender":
New York Times: Iran Proposes 7-Day Plan to End War
Iran wants, essentially, to return to something close to June's MOU, except on a faster timetable. Iran agrees to "reopen" the Straits in exchange for getting its confiscated $12 Billion, an end of the sanctions and blockade, and then to open discussions as to the future of its nuclear program.
Contrary to expectations that Iran is biding its time in hopes that Democrats will retake Congress, Iran says that it would prefer to reach a deal before the midterms.
Trump, however, is not interested:
AP: Iran indicates it’s received an official US response to its latest offer on ending the war
Iran prefers to call it a "win-win":
So, here's the current state of the war:
Shipping is moving through Hormuz and is increasing week-to-week. Total traffic out of the Gulf is approaching pre-war levels.
Iran has no ability to seriously threaten shipping in the Straits.
Iran is seemingly unable or unwilling to continue striking other American targets and assets in the Gulf
Iran remains blockaded and unable to export its own products, contributing to severe stress on the Iranian economy.
Iran is more interested in negotiating peace than Trump is.
Forgive me for repeating old arguments but I need to be clear about this: Trump was right about Iran and America is winning.
So they claim, yet real prices are nowhere near pre-war levels. Reminds me of that old Stonetoss comic about Bitcoin.
Then: "Oil rises to $75!"
Later: "Oil CRASHES to $85!"
Later still: "Oil PLUMMETS to $95!"
All this without even mentioning that bond yields continue to soar despite Bessent burning billions in bond buybacks. At this point Trump's best chance to get prices back to normal is to hope for a global depression that kneecaps global demand sufficiently to make the Strait(s) irrelevant.
I would dare, because it's basically an American surrender to expect all the sanctions relief up front, before any discussion of the nuclear issue. Trump obviously wasn't going to accept, the point was to make Trump look obstinate to the neutrals. "Look, we're reasonable but Madman Trump would rather crash the global economy than make any concessions!"
Uh, obviously the Iranians would prefer Trump give up immediately rather than having to endure two more months/years of fighting.
Regardless, the Iranians have already done enough to ensure that the Dems retake Congress. Kalshi has them at 91% for the House and 63% for the Senate. They're already predicted to win Republican strongholds like Texas (62%) and Alaska (70%). The only real question is whether they think they've hurt Trump enough politically to establish deterrence or whether they decide to escalate and give Trump an October Surprise big enough to flip Kansas and Nebraska too.
OP is making the mistake too of thinking the Iranians are negotiating in good faith.
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These are two analyses from JP Morgan Chase and Goldman Sachs, not the American government.
Prices are falling. We would expect that the longer supply stays at pre-war levels the closer prices will get to pre-war levels too.
Fantasy world political predictions. It would sound more reasonable if you just said you thought Democrats were going to take the House.
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I think the four vessels Iran just struck is evidence that they retain the ability to threaten shipping, as there are costs to damaging ships and American marines even if the ships technically pass through the strait
Doesn’t seem to be making much of an impact.
Four vessels struck in Hormuz in 24 hours
As for the other three:
To recap: Iran strikes four ships, sinking none and causing no casualties. It attacks ships both compliant and non-compliant with its transit rules, putting the lie to any notion that it is in control of Strait traffic, let alone itself. It is, ultimately, capable of inconveniencing individual ships but is nowhere close to controlling anything, putting it at the same threat level as minor pirates. Which is why Strait traffic continues to increase from week to week: nobody fears Iran anymore.
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What does "struck" mean? What were the names of the ships? How much damage was done? How many casualties? Many of these reports fall into the category of 1) never happened or 2) got hit by a bullet or drone with minor damage
Since casualties weren't mentioned, I am guessing there weren't any. I think it's likely that these ships successfully transited the Strait and will come back again for more.
Imagine if this forum gave even 10% of the attention it gives to these stories as it does to debating each frame of police body cam video. We need to be a lot more skeptical.
These are UKMTO reports so we can be sure they’ve happened. They constitute an absolute minimum on the happening scale. The guy I linked in my last comment is consulted by like every news org. I would also think that Gregory Brew, “Senior Analyst Iran and Oil EurasiaGroup • Formerly ISSYale” is worth trusting, and he concurs.
This is all a mystery, but the 30 or so sailor casualties that were added to our total casualty figures probably means it’s a bit more than a bullet.
It’s not like these tankers are required to report everything to UKMTO right now, let alone accurate casualty figures.
That tweet is exactly what I'm talking about.
He apparently thinks the UKMTO is fake and that Iran's propaganda is real? Iran said not too long ago that a VLCC hit two mines caught fire and stopped. Cool, what was the name of the ship? We have to discount Iran's pronouncements to near zero. The fact that this "serious" person isn't doing so shows that he's far from serious.
Ships are transiting the strait with impunity even if a few get dinged from time to time. I think there was an actual casualty event a week or two ago, so it's not completely nothing. But when an actual power like the US wants to attack a ship, they sink it, name it, and post the video.
We don’t really know if it’s “a few get dinged” though. The UKMTO number is the lowest number that US/UK are willing to release so that people continue taking the figure halfways seriously. If 20 vessels were struck, we might still find only 4 on the UKMTO. If we just added +38 sailor / marine casualties for September, either Iran hit one of our important military ships or Iran has hit a number of oil vessels being operated by sailors. Apparently there were 8 sailors on one oil vessel transiting that were injured, so perhaps Iran struck about five oil vessels sufficient to cause injury. Or perhaps even the +38 casualty number is lower than the true figure. The fact that we need our own soldiers operating oil vessels in yet another tell that it’s worse in the strait than Trump would like us to believe.
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Does this include refined products? IIRC the Gulf states had been moving up the value chain, and had built a lot of refining capacity there, largely displacing smaller facilities in other nations. I recall someone in the industry saying that refiners still operating were doing really well on margins because so much global capacity (Russia and Gulf states) was offline. I hadn't heard if the Gulf refineries are back online, even if crude shipments (or total volume?) are recovering.
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Some of this seems off to me.
"Diesel and gasoline are still stymied, but, mostly, because Iranian exports are being blockaded by the US." I don't think Iran has ever been a significant exporter of refined products (if anything historically it's been a significant importer do to lack of refining capacity though I think pre-war it was improving in this measure). Damage to refineries in Saudia Arabia / UAE and logistics disruptions or the like would seem more likely?
I'm surprised the oil is flowing so well, a lot can change, but it was only 10 days ago that Saudi Arabia declared Force Mejure on some of it's European contracts and said it wouldn't be able to make October deliveries (some Saudi fed European refineries with longer term contracts are slated to get 0 barrels of their contracted oil delivery in October). This is the kind of thing that's keeping prices (and prices of refined products) high. The Saudi East-West pipeline is still only at 50% after being hit and shut-down a few weeks ago (sounds like repairs are going faster then expected, original reporting was that it might be as much as 6 weeks to get things flowing again, so maybe the Europeans will get some of their Oct. oil after all). This kind of vulnerability though is keeping folks nervous.
I don't think the Iranian government is unified on the issue (indeed this has been part of the problem with the previous MOU etc.). Some parts of the Iranian government want peace now, others don't.
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Is that why Trump was toying with the idea of a diesel export ban?
Diesel is also being squeezed by Ukraine hitting Russian refineries. But these are temporary disruptions.
China's refined product exports were also way down in April-July period, but are now back to higher levels.
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Many people call this cope but I actually believe it. Russia is the world's largest diesel exporter besides the us, and they actually did do a diesel export ban.
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I don't think that many astute geopolitical commenters who weren't blinded by some form of domestic politics bias ever thought that Iran could defeat the US in a war. That's like predicting that a five year old could beat a grown man in a fistfight. Outlast, maybe (and only if, as has so far been the case, the US lacks the political will to launch a ground invasion). Defeat, no. Of course, there are plenty of unastute geopolitical commenters, and there are plenty of people who are blinded by domestic politics bias.
I personally have never argued that Iran had any serious chance of defeating the US in a war.
However, that does not necessarily make the war a good idea for the American people. That's a separate matter.
For me personally, in the sense of my own personal self-interest, I'm not sure whether the war has been good, bad, or neither.
I have probably indirectly been affected by the higher oil prices, but I'm not sure to what extent. I imagine probably badly, but I haven't done the research to find out for sure.
Crude oil prices remain, for now at least, about 1.5 times what they were before the war. It's about the same for retail gasoline and diesel prices in the US. Whatever is going on in the Strait of Hormuz right now, it hasn't translated into lower prices so far at least. I do not think this is because Iranian exports are being blockaded. Iran's share of total world oil and oil products production was not even close to high enough before the war to explain the current high global prices.
I think that the chance of Iran ever using nuclear weapons against the US even if it builds them is so low that it's not something I have ever worried about. In my opinion, the Iranian leadership acts much more like a typical rationally self-interested government than like the "suicidal fanatics who would use a nuke the second they got it" that some consider them. So I'm not significantly more worried about them nuking me, even if they got nukes and delivery systems, than I am about Russia or China nuking me. Which is to say, almost not at all. I believe that almost certainly mutually-assured destruction would hold with Iran. So whatever damage the war has done to Iran's nuclear program, I don't see it as a significant win for myself.
Ironically, I think that Trump supporters might actually have the most to complain about. The war has done significant damage to the populist movement that coalesced around Trump 11 years ago:
If I’m not mistaken, our entire intelligence community believed that Iran would be able to prevent passage through the strait. If that’s what you mean by “winning”, that is still a distinct possibility. We don’t know at what expense the current high of oil transit is maintained and our casualties are quietly increasing. Houthis can still attack pipelines in KSA. If you mean that Iran would be able to defeat America in an all-out conventional military war, that’s a strawman that I personally haven’t seen expressed anywhere.
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I've been in arguments on this website with many who argued exactly that. There are lots more on twitter and throughout the mainstream media. Granted that this is not the most serious anti-war argument and so it shouldn't be the only argument discussed. But I feel compelled to seriously rebuke it because the idea that Iran was winning and America lost has seriously infected a lot of people and it colors other views about other things.
Anyways, I appreciate a fairly neutral take. In my circles I think I have heard the strongest criticisms of the war from MAGA and other Trump supporters. My argument has been that they are wrong because Trump winning in Iran gives Trump more power to renegotiate global trade (which is exactly how he's reindustrializing the American heartland).
Yes, when it comes to people arguing that Iran could militarily (as opposed to politically) defeat the US in a war, I classify those in the unastute or biased category. Or engagement bait. Twitter is mostly made up of engagement bait, as far as I can tell.
Unastute doesn't mean unintelligent. But some people aren't really aware of the enormous difference in military power between the two countries.
What's the mechanism by which winning in Iran would give Trump more power to renegotiate global trade?
It’s like what happened in Venezuela: the more that comes under America’s control, the more leverage America has in negotiating with other countries.
We want to tariff China to avoid them dumping cheap goods and bankrupting our manufacturers, but Europe wants to profit as the middleman mediating Chinese goods, so now we control the supply of oil that feeds Europe and China doesn’t.
We want Asian capital to fuel an American factory build-up so we can wean ourselves off Chinese rare-earth metals, now we control the supply of oil Asia needs.
This is all done out in the open, South Korea planning 8 nuclear power plants in the US, India announcing a $15 Billion steel plant in Iowa, Europe complying with the latest sanctions against Iran. All told Trump is redirecting hundreds of billions of dollars into America’s economy, which is a much more effective use of his time than negotiating with Lisa Murkowski and Mitch McConnell. He’s making good on his campaign to Reindustrialize and he’s using executive power to do it.
This stuff will compound. By acquiring a controlling stake in Venezuelan oil, Trump is making America more powerful in energy than OPEC. So OPEC can either cut deals to supply energy where Trump wants it, or they can suffer outages while Iran festers — America is fine in either outcome, which gives Trump the most leverage. So he can negotiate an expansion of the Abraham Accords, the beginning of a lasting peace in the Middle East, more investment for America, etc.
Let's say hypothetically that that is Trump's strategy. I understand how Venezuela fits into this strategy. I don't understand how Iran does.
I don't imagine that Iran is going to change who they sell their oil to after the war unless there is a regime change, and maybe not even if there is one.
The US can physically prevent Iran from shipping oil out if it wants, but it could have done so before the war as well, if it had wanted to. That doesn't require a full-scale bombing campaign.
And I think there are probably easier and more effective ways for the US to put pressure on the Gulf States than to play some game of "we'll bomb Iran hard enough to make them bomb you but not hard enough to prevent them from blowing up your oil infrastructure sometimes, so you should do what we say".
On another note, I feel bad for Iranian liberals. Part of me wants to say that if Trump was going to start the war at all, he should have had the balls to launch a ground invasion. Now the Iranian liberals are stuck in kind of the worst of both worlds. Their oppressive government is still in charge, and is extra paranoid and incentivized to crush dissent. Plus their country has been getting bombed.
A blockade is an act of war and therefore does become a bombing situation.
We use many of those levers all the time. It wasn’t enough in the case of Iran, which is why we escalated to war.
By and large it’s the Gulf States that asked us not to bomb Iran back into the Stone Age “Bridge and Power Plant Day” style. Iran’s ability to attack oil infrastructure has greatly declined.
(The Houthis are a separate case but they are not currently undergoing an American bombing campaign.)
Now that a few months have passed, I think the most plausible explanation for the war is that Iran was attempting a traditional military buildup before a nuclear buildup. They could import Chinese and Russian manufacturing techniques to scale up missile production, and then make enough bombs to be uncontrollable. Then they could construct a nuke at their leisure because they could hold the Strait hostage. Trump bombed them before this buildup could be completed.
Which is to say, I don’t think the war happened just so Trump can control global oil markets, but that’s clearly a benefit of prosecuting the war now that we’re in one.
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I am glad that we've achieved the pre-war status quo, at an economic cost of a half trillion dollars or so.
Though, you also have claimed oil flows had been restored and complete US victory several times before. Maybe this time it'll stick. It'd be rational for Iran to accept peace on pretty much any terms, but that's been true for awhile.
As I commented before, the only way you come up a half trillion dollar cost is by saying that "oil prices going up" means the extra money spent on oil just disappears from the economy. But it doesn't. That money is recycled throughout the economy. The true cost is much lower.
A half trillion cost could also be arrived at via the cost to Iran's economy. That's probably a fairly accurate figure.
For relatively cheap we were able to almost completely neutralize Iran's navy, air force, missile program, and nuclear program. If we get regime change, the war will almost certainly be worth it. Even if we don't, I think it succeeds on the merits.
The one objection that I think holds weight is that it's been a PR nightmare. If Republicans lose the midterms, the cost will have been immense. But that's not really the way Trump thinks.
This is just the broken windows fallacy, gussied up. Higher oil prices mean that people use less oil than they would otherwise; this is a global economic distortion. The half a trillion dollars number isn't coming from naively multiplying the delta in oil prices (that gets you the trillion dollar number) but from (necessarily counterfactual) GDP deltas. I guess a hardcore climate change person could eliminate a lot of those costs by saying oil usage is a net negative.
And, although I don't expect many people to be sympathetic here to Iran's economy, massive destruction of capital is massive destruction of capital.
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To be clear, the pre-war status quo was that the strait was only "open" because Iran was using it as a hostage. Meanwhile they were investing heavily in their nuclear, drone, and ICBM programs, plus funding terrorist proxies abroad. Not to mention massacring any of their people who dared to protest.
All of that is gone now. Their missile factories are destroyed, their funds are gone, and most of their missiles have been used up. The only thing left is finding a way to permanently remove their nuclear material, which has been bombed into dust but is still there. And if they won't come to terms on that, the US and its allies can just keep bombing them indefinitely while other nations' oil goes through the Strait and Iran's economy falls ever further apart.
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Yes, because the US has been winning the entire time. Trump attacked Iran and destroyed their ability to threaten traffic in the Straits, and proclaimed that the Straits were open. Everyone laughed and then slowly started transiting the Straits under American protection, hence the current "pre-war status quo".
That's the definition of victory. America is at "pre-war status quo," Iran is doing much worse than before the war. Time to admit Trump won and Iran lost.
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Gasoline and diesel prices are still up so you are wrong. Claims that this is about California shutting down refineries are false because that was not recent. Claims that this is about Ukraine blowing up Russian refineries are irrelevant because the mainstream media will not entertain them.
As for negotiation, the problem is that Iran already made a deal and then reneged. As a result, at this point it's on them to demonstrate good faith by giving up something for free. Announcing a unilateral cease fire in the Strait and actually abiding by it for a few weeks would be a reasonable one, but they won't do it.
Iran is winning because gas and diesel prices are slightly up? Doesn't seem like the Iranians agree with you.
America not winning doesn't imply that Iran is winning. Both are losing. The winners are anyone still shipping oil (Saudis are making bank, UAE too since they also have a straight bypassing pipeline and were never completely shut out like Kuwait etc., and other oil exporting dependent economies outside the middle east). Parts of the US are winning (frackers, and especially refinery owners, the spreads are huge right now) and larger parts are losing (farmers, fishermen, everyone else).
By this definition World War II was a loss because most Americans had to ration their food.
If we’re using the standards of WW2 for victory, then your arguments above are irrelevant. You didn’t have to argue that the US won because it was obvious since they occupied their countries and toppled their regimes.
Everyone knew who was winning the war by 1944. Stalin Roosevelt and Churchill organized conferences about it. It’s just as obvious who is winning in Iran today.
The best case scenario is for everything to go back to essentially to the pre-war status quo. I think what’s pretty obvious is that the most likely scenario is something significantly worse. There’s really no point in us talking any more, we will just see how this plays out.
A scenario where Iran suffers tremendous losses and America returns to pre-war status quo is an American victory.
That’s rather a limited comparison: we’re only talking about prices. The pre-war status quo did not include American control over the Strait of Hormuz or American military veto over Iran’s MIC.
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You said Trump had won in your previous posts and the war was over. So is America winning or has it won? Have you accepted the war isn’t over yet? It’s also hilarious to me that you count going back to pre-war levels as winning. Congratulations on getting back to the exact same place we were before the war I guess.
> Iran suffers crippling permanent military defeat > America suffers temporary and minor economic setback
This was true six months ago and it's obvious today. This was always how the war was progressing which is why I have argued so consistently that the war was won: that's a fair vocabulary when Germany is up 7-2 and the game is technically still in play.
So just so we are on the same page: the war is over and Iran has lost. The US has effectively a 100% chance of accomplishing all its goals. So it’s not winning, it has won.
Iran is negotiating its surrender. The war is over and Iran has lost.
Iran's "negotiations" are fake. They think Trump will be foolish enough to release the blockade on their promise for a peace deal, which will allow them to export a bunch of oil and buy themselves some time. Then they reneg and fire on ships again just like last time. Trump seems uninterested in this idea, fortunately.
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What will you say if they don’t surrender and don’t give up their nuclear material?
Then oil will continue flowing through the Straits, and Iran's economy will continue collapsing. Exactly as it has since June.
And when the Democrats win the midterms and invoke War Powers Resolution law because Americans don’t want this to go on indefinitely… what then? This is an unpopular war and nobody wants this to go on for years. Trump is on the clock. He doesn’t have unlimited time.
War powers resolution is toothless. Needs a veto propf majority to mean anything so it's all theater
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Maybe they can try Impeaching Trump?
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Trump vetoes.
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Sure, but there's a lot of ruin in a nation. Iran might be able to just outlast Trump and end the war with a pinkie promise to President Newsom (or AOC). Then toll the strait and nuke Tel Aviv.
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The war isn't about oil for the US, it's about Iran's nuclear program. Oil was just away for Iran to strike back. If non-Iranian oil is flowing and their nuclear program is stymied, Iran is losing and America is winning. Except that gas and diesel prices say that's not actually the case.
Certainly the war is not over, not until the US can reduce military presence at least back to pre-war levels without anything bad happening, said bad things including Iran shooting at merchant traffic.
I agree 100%. I actually had a similar comment last week saying basically the same thing you said in your second paragraph. As long as the US military can’t and the area isn’t the same as it was pre-war, the war is far from over. I don’t see any easy solutions for this other than giving Iran concessions that are not acceptable, so this war will continue for the foreseeable future in my opinion.
I also listed Trump’s pre-war aims noting that only one (destruction of their Navy) had been completed so the war is not over by Trump’s own standards. OP said they all had been accomplished, but I just don’t see that being anywhere close to reality.
The USA actually seems to be reducing military engagement in the region below prewar levels, with the announcement today that troops are pulling out of Iraq. (Again)
I pray that a peace deal is reached, and to a lesser extent that it is favorable to the United States and does not lead to the destruction of Israel.
Withdrawal from iraq is on a timeline set well before the iran conflict. Regardless of whether it was a good idea it's only fulfilling past obligations made years ago. In fact it was Joe Biden who set the timeline.
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Concessions won't even work, since they won't stick to their end. They're going to have to be destroyed, or they will win. Whether that can be done through attrition or is going to require actual invasion is still up in the air.
This is essentially the argument I made last week, so I agree 100%. The concessions I was talking about were ones that are a non-starter that would be so humiliating that the US would never accept them. But you are probably right that even if they got those, they will push for even more eventually. Thats why I made the argument last week to OP that the war isn’t over and the US can only win if the Iranian regime collapses.
"if the Iranian regime collapses."
Had a back and forth with "Lion of the Blogosphere" on X, he in favor the war. We agreed on this point about the regime, but I claimed the fallout would be even more refugees flooding into Europe. He responded, "that's Europe's problem." Incredible.
Agreed. The US could potentially cause the Middle East to go into even more chaos and that could have consequences all over Eurasia. Best case scenario to me is we go back to the pre-war situation, and that obviously won’t be worth the cost of the war.
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