Good morning! We are in week 4 of the war and over the weekend the situation only escalated. Trump threatened to target Iranian power plants if they refuse to open the Strait of Hormuz in the then next 48 hours, which end in ca. 12 hours.
Now the whole war revolves around the strait issue and we are on the sidelines, praying at this point that it can be resolved before the world is hit with irreversible depression.
Outside of praying though, the next best thing you can do is look on prediction markets to understand where we are heading.
Iran Tracker
#1 The Ceasefire
The ceasefire chances held steady over the weekend on confusing messgaing from Trump.
However, his recent ultimatum failed to produce any meaningful moves. Iran threatened to respond in kind vs caving in and opening the strait and now the ball is back in Trump's court. By tomorrow we will know if he followed through on his threat.
#2 The Strait Of Hormuz
The Strait of Hormuz continues to be effectively closed. In the meantime the price of 20+ ships moving through the strait in a day moved up slightly as traders felt a bit bullish on the prospect of escort operation happening:
However, for now no such operation exists, pushing oil prices only higher:
#3 Boots On The Ground
Chances for US boots on the ground in Iran continue to rise as additional Marines units are being deployed to the region.
We continue to maintain that the issue of the strait needs to be resolved at almost any cost, thus some kind of operation looks more likely by the day. And recent reporting suggests Trump's eyes are set on the Kharg Island, representing majority of Iran's oil export capabilities:
Even on such a tight deadline the chances are at 38% and rising!
#4 Iranian Regime Fall
Iranian regime survival chances stayed flat over the weekend.
At this point it starts to become clear that only a meaningful breakthrough on either side can significantly impact prices on this market. The fact that this is the case, only showcases Iranian resilience.
#5 Next Supreme Leader
Mojtaba Khamenei continues to enjoy the Supreme Leader position and his chances of staying there by the end of the year are flat for the week.
Khamenei junior remains well hidden and expectations are that he will stay hidden as long as necessary. IRGC controls the country now and conducts the war in the decentralized manner.
Wrap up
Situation remains extremely volatile, however it is starting to become clear that we are in for longer. Prediction markets have almost fully priced in a prolonged conflict, now we are waiting for traditional markets to reflect that reality. You should also start to think on how a global energy supply shock affects your job, family and country as we can see the first impact on the war already. Per what we see on the markets, we are entering uncharted waters, full of chaos and uncertainty.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and see you tomorrow for another Morning Brief!
This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.