Thoughts on Today - #Oil and Global Liquidity: Middle East Variables
The past two days appear to be de-escalating on the surface, with oil prices also pulling back, but underlying risks are actually accumulating.
On one hand, negotiation rhetoric is being put out there, but it seems more like buying time. Both the US and China have been conducting evacuation operations this week—this kind of thing doesn't happen because "the situation is improving."
On the other hand, military preparations haven't stopped. US troop deployments are continuous, and they're preparing for worse-case scenarios.
Looking at Iran's statement today, saying it won't affect non-combatant passage sounds like de-escalation, but it actually leaves elastic space. Once the situation escalates, major Gulf oil-producing nations can easily be redefined as "combatants." In other words, this signal itself indicates that the initiative over the strait is in Iran's hands.
If we're pessimistic, the window of opportunity is only one week, or even shorter.
Thoughts on Today - #Oil and Global Liquidity: Middle East Variables
The past two days appear to be de-escalating on the surface, with oil prices also pulling back, but underlying risks are actually accumulating.
On one hand, negotiation rhetoric is being put out there, but it seems more like buying time. Both the US and China have been conducting evacuation operations this week—this kind of thing doesn't happen because "the situation is improving."
On the other hand, military preparations haven't stopped. US troop deployments are continuous, and they're preparing for worse-case scenarios.
Looking at Iran's statement today, saying it won't affect non-combatant passage sounds like de-escalation, but it actually leaves elastic space. Once the situation escalates, major Gulf oil-producing nations can easily be redefined as "combatants." In other words, this signal itself indicates that the initiative over the strait is in Iran's hands.
If we're pessimistic, the window of opportunity is only one week, or even shorter.