"The end is not in sight. The Strait of Hormuz is effectively closed, and markets are starting to price in a prolonged, uncertain endgame. Despite a punishing bombardment that's decimated Iran's military and wiped out top leadership, the regime is still able to threaten ships in the Persian Gulf and keep oil prices high."
"Tehran has no appetite yet to reach a deal that ends the conflict, as it seeks to deter any future attacks by inflicting as much economic pain as possible right now. But Iran also faces threats to its economy and internal political control as airstrikes hit levers of repression like the Islamic Revolutionary Guard Corps and Basij militia."
"Even the Tehran regime has an incentive to eventually end the war, as a lengthy conflict risks fractures and its own self-preservation. President Donald Trump is grappling with his own constraints, such as high oil prices and low political support for the war with midterm elections coming later this year."
The S&P 500 has declined only 3% year-to-date and remains 5% below its all-time high, indicating limited market panic over the U.S.-Israel war with Iran. Oil prices have surged over 40% since the conflict began and are up nearly 70% year-to-date, though still below 2022 Ukraine invasion peaks. Iran's blockade of the Strait of Hormuz restricts approximately one-fifth of global oil supplies. Despite significant military losses, Iran maintains capability to threaten Persian Gulf shipping and sustain elevated oil prices. Both the Iranian regime and U.S. administration face economic and political pressures that could incentivize conflict resolution within two months, though further escalation remains possible in the near term.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]