In the latest developments concerning the ongoing conflict in Iran, the situation remains fluid. We expect to have a comprehensive update ready by 8:00 AM EDT, or at the latest, by 8:30 AM EDT. Please check back or refresh the page for the complete report.
Please make sure to scroll down for insights on the financial markets and real economy, which are crucial for many reasons, including exerting pressure on Trump.
As we indicated yesterday, we remain skeptical about Trump’s recent declaration regarding a large-scale military strike on Iran due to his past contradictory behaviors. Despite indications from military sources about potential action—stemming from repositioned military assets and alerts from certain contacts—we consider his threats with caution.
As noted by the New York Times:
Trump’s statement:
It is conceivable that Trump’s latest shift could be a strategic move aimed at calming investor anxieties. There is speculation that he may choose to take military action during the Memorial Day weekend, which aligns with previous predictions. As Jim Carville once said,
I used to believe that, if reincarnation were real, I would want to return as the President, the Pope, or a .400 baseball hitter. Now, I want to return as the bond market. You can intimidate everyone.
As we will discuss further later, yields globally have seen a significant rise as previously complacent financial experts finally recognize that normal traffic levels through the Strait of Hormuz are unlikely to return anytime soon. This presents a concerning outlook, with potentially catastrophic implications.2
Trump has once again offered misguided hope for negotiations through minor concessions to Iran. A news piece from Tasnim News, even reported by Bloomberg, indicating that the U.S. would lift sanctions on Iranian oil was proven false.3
In a recent tweet, Trump mentioned that he had honored requests from Qatar, Saudi Arabia, and the UAE to delay military action and continue negotiations. Early in this conflict, we pointed out that a swift resolution could occur if key Gulf states reached a consensus with Iran, which would undermine U.S. and Israeli military operations.
We currently lack information about how firmly these objections were raised and whether the states were united in their stance. Recall that after Saudi Arabia, Kuwait, and others expressed their unwillingness to allow their airspace for U.S. operations, Trump abandoned that plan. However, several tweets indicated that Saudi Arabia might allow U.S. forces to use their airspace.
It’s important to consider the fortitude of these nations’ positions and their level of cohesion. Larry Wilkerson noted last weekend that Saudi Arabia lodged a protest regarding U.S. airspace usage, though he deemed that insufficient.4 Wilkerson suggested that Saudi Arabia would have to threaten to intervene militarily if necessary.
Despite Trump’s fraught relationship with the truth, he is constrained by the presence of Zionists in the White House, which influences his capacity for deception. In this context, it is noteworthy that Trump explicitly stated he had “informed” Israel of his intent to heed the Gulf states’ requests:
Beginning at 1:13, referencing a machine transcript:
Reporter: Could you elaborate on your post regarding Iran and the decision not to attack?
Trump: Other nations have reached out to me, indicating that we were preparing for a significant attack tomorrow. I postponed it [snorts] for a bit. Perhaps indefinitely, but at least for now.
We’ve engaged in significant conversations with Iran.
We shall see how those play out. Saudi Arabia, Qatar, the UAE, and others asked if we could delay for two or three days since they believe a deal might be close. If we can achieve this while ensuring Iran doesn’t acquire nuclear weapons, I think they will be satisfied, and we likely will be too.
We have informed Israel and other Middle Eastern countries involved.
Even if Trump’s narrative is an exaggeration, it highlights the concerns Gulf states have regarding the escalating costs of the conflict and the potential for severe retaliation from Iran should the U.S. or Israel increase their military engagement. Motivated by self-preservation, these states will seek to de-escalate tensions, reverting to terrorism against Iran and increased maritime traffic in the Strait of Hormuz. This situation complicates their relationship with Israel.
If the UAE, which recently allied closely with Israel, is now stepping back from military aggressiveness, it would severely limit U.S. and Israeli operations in the region. While I am not an expert, I would infer that launching another large-scale offensive would be significantly more challenging, necessitating revised military strategies.
However, even if multiple Gulf states are firmly opposed to further escalation, this does not guarantee an end to the conflict. Israel could still act independently and pull the U.S. deeper into the fray. Even with dissent from the Gulf states, I doubt Trump would decisively cut military support for Israel.6
There’s always the possibility of a deceptive incident.
In an analysis with Mario Nawfal, Trita Parsi examined Trump’s communications before and after his recent remarks. As I have cautioned readers, it is vital to filter out Parsi’s assertions concerning “negotiations,” which have been criticized as a misnomer; this interaction could be better termed discussions.5
From a lightly edited machine transcript. Initially from Parsi:
Many have seen Trump’s post stating that the UAE, Saudi Arabia, and other nations requested he refrain from military action, leading to his decision to pull back. This is critical.
However, we should also analyze the tweet he posted an hour prior, which appeared to call for Iran’s total surrender and its naval forces to be eliminated.
If that truly reflected his intention, it would indicate he was gearing up for war. That statement could seriously undermine any ongoing negotiations.
Yet, upon closer examination of the long, convoluted tweet, it’s clear that he implies even with such outcomes, the mainstream media, including the New York Times, would misrepresent the situation, suggesting he failed.
This reflects his awareness that he may never attain the victory he desires, all while attempting to assert he will achieve it regardless of media narratives.
This type of messaging often precedes backing off from major commitments made during negotiations. He aims to protect himself from appearing to falter by discrediting potential criticism in advance.
Larry Johnson is skeptical about Trump’s reliability and perceives a recurring cycle in his behavior. From The President Who Cries War, then Peace, Then War:
The individual who inspired Aesop’s fable, “The Boy Who Cried Wolf,” is now serving as the President of the United States. Since February 28, 2026, Trump has issued 11 statements suggesting the war with Iran concluded or that a negotiated agreement was imminent, only for them to be proven false.
Over nearly three months, a consistent pattern has emerged: Trump claims victory or nearness to a deal → Iran denies it or contradicting evidence arises → Trump escalates rhetoric → new negotiations are claimed to begin. Analysts suggest these contradictions stem from Trump’s desire for an easy triumph, while Tehran is focused on delaying U.S. demands to secure its own conditions first—creating a fundamental mismatch in negotiation timelines. The repeated declarations have become a diplomatic liability, with Iran pointing to them as proof of the U.S.’s incoherent negotiating stance.
Trump’s cycle of reversal only serves to create an opportunity for those close to him to profit from stock and oil fluctuations. More importantly, he is eroding trust and confidence in his leadership. Aesop’s fable illustrates that lies diminish credibility, meaning that when real crises arise, people won’t believe the deceiver.
Besides being financially lucrative for Trump and his associates, his misleading statements have succeeded in another way: some significant media outlets are no longer giving the conflict the attention it deserves.1
However, investors are less responsive to Trump’s antics now, with the expectations for the market not reacting as positively as in the past. Al Jazeera’s latest update captures this:
Oil prices drop as Trump postpones planned strike on Iran
Oil prices have declined, with global benchmark Brent crude falling 1.5% after Trump announced he would delay a military strike on Iran to allow for negotiations.Brent futures LCOc1 for July are down $1.73, or 1.5%, to $110.37 a barrel as of 08:25 GMT, while US West Texas Intermediate crude CLc1 for June delivery, now expired, fell by 63 cents, or 0.60%, to $108.03.
The more active July contract CLc2 dropped 82 cents, or 0.8%, to $103.56.
Recent military developments:
⚡️BREAKING
A regional source reports that the United States anticipates the closure of the Bab el-Mandeb Strait.
The Pentagon has ramped up surveillance in Yemen, with one of its MQ-9 drones shot down less than 24 hours ago.
A closure of this Strait would deprive… pic.twitter.com/5HfeQLQY7D
— Iran Observer (@IranObserver0) May 18, 2026
فعالشدن پدافند قشم علیه ریزپرندهها
خبرنگار تسنیم به نقل از منابع مطلع: پس از مشاهده ریز پرندهها در آسمان جزیره قشم، پدافند در جهت نابودی اهداف متخاصم فعال شده است
— خبرگزاری تسنیم – خبر فوری (@Tasnimbrk) May 18, 2026
Translated from Persian:
Qeshm’s Air Defense Activated Against Micro-Drones
Tasnim News Agency reporter, citing informed sources: Following the sighting of micro-drones in the skies over Qeshm Island, air defense systems have been activated to destroy the hostile targets.
On the economic front, concerns regarding collateral damage from the near-closure of the Strait of Hormuz are growing louder and identifying various potential impacts. Today’s noteworthy commentary from Jeff Currie is short but pointed:
Last night, I ventured outside my usual media sources to hear several segments discussing the state of the bond market. These reaffirmed the concerns Currie has raised throughout the Strait of Hormuz crisis, indicating that financial experts are dangerously oblivious to the critical nature of commodities and supply chains. The discussions concentrated on inflation, without adequately addressing energy prices or issues related to the Strait of Hormuz. When questioned about the future, most addressed only Federal Reserve actions. Below is an example of useful commentary, yet it remains misguided as it assumes financial factors alone drive inflation rather than the real economy:
It felt as if I’d entered a film set where experts with market feeds were speaking to TV producers while a giant Godzilla looms in the background.
This Al Jazeera segment further illustrates how disconnected U.S. elite perspectives are from imminent risks. In Trump halts planned Iran attack after Gulf leaders intervene amid diplomatic efforts, a brief discussion with the White House correspondent reveals ongoing sacrifices at the expense of the general public. He mentions that Republican Congress members fear voter backlash despite lower energy prices come election time, which seems unrealistic given the circumstances.
In contrast, the Financial Times ramps up the urgency in its report, Tipping point looms for global energy crisis:
Nearly 80 countries have introduced emergency measures to protect their economies as the world nears a more perilous phase in the energy crisis driven by the Iran war.
Governments are intensifying their responses ahead of an impending tipping point, at which traders caution that oil prices could sharply rise again unless more fuel trapped in the Gulf can be exported through the blockaded Strait of Hormuz.
Paul Diggle, chief economist at fund manager Aberdeen, indicated that his team is evaluating a scenario where Brent crude prices could soar to $180 a barrel, resulting in rampant inflation and recessions in many European and Asian countries…
As demand for air conditioning and summer travel rises in the northern hemisphere, it will further strain supplies of crude oil, gasoline, diesel, and jet fuel, even as global reserves are already dwindling at record rates.
The International Energy Agency (IEA) reports that the number of countries resorting to emergency measures has increased to 76, up from 55 at the end of March.
Economists and traders warn that the next phase of this crisis could trigger another significant spike in energy prices, widespread fuel rationing, industrial shutdowns, and a drastic slowing of global economic growth.
If the Middle East conflict “does not resolve soon and the Strait of Hormuz remains closed, a global recession may be forthcoming,” cautioned the EU’s transport commissioner Apostolos Tzitzikostas at an FT conference in Athens recently.
Since the onset of the conflict, the world has been living beyond its energy capacity.
The IEA estimates that between March and June, global oil consumption will exceed production by approximately 6 million barrels per day. Some analysts suggest the shortfall may be closer to 8 or 9 million per day.
While over 2 million barrels a day of emergency crude from strategic reserves is being released, many of these supplies are set to cease by July.
Global reserves have decreased by nearly 380 million barrels since the war started, according to the IEA, not counting the inaccessible stocks trapped in the Gulf.
Most oil reserves, exceeding 3 billion barrels, remain with oil companies, traders, and refineries. However, this inventory is essential for maintaining system functionality. Pipelines require certain volumes to preserve pressure, refineries depend on constant supply, and storage tanks cannot be entirely depleted without risking damage.
Analysts note markets could seize up long before inventories hit zero.
JPMorgan warns that inventories within OECD nations could reach “operational stress levels” by early June.
In many parts of the developing world, shortages have already manifested.
An escalation scenario—where oil prices climb past $150 a barrel—would likely result in physical shortages, supply chain disruptions, and recessionary outcomes, as stated in a recent note by analysts.
Local media are also warning that oil prices could surge to between $140 and $180 per barrel:
Bloomberg discussed the ongoing panic buying by businesses amid fears of an energy squeeze in Global Inventory Race Intensifies in Shadow of the Iran War.
The global rush to stockpile manufactured goods due to fears of an energy-supply crunch will overshadow business surveys in the coming week that will gauge the impact of a third month of war in the Middle East.
The purchasing manager indexes for May, which measure industrial activity in key economies, are projected to show continued expansion, largely propped up by preemptive stockpiling.
The key question looming over the upcoming data, from Australia to the U.S., will be whether this resilience is genuine or merely a sign that manufacturers are running on fumes before the energy shock fully takes hold.
The indexes will also reveal how increasing costs are impacting major economies and may hint at supply bottlenecks reminiscent of disruptions seen during the pandemic.
Regarding jet fuel shortages, CNBC took note:
No one is spared! As noted by Reuters in Rising diesel costs from Iran war strain U.S. school budgets (hat tip Ann).
Additionally, there’s a significant spotlight on a Department of Justice investigation regarding BlackRock’s credit fund, which appears troubled. The DOJ’s involvement raises questions typically under the purview of the SEC, suggesting criminal referral. It must be noted, however, that any charges, even at the investigation stage, could end up being civil, assuming BlackRock is cooperative.
Yet, as Jeff Snider elaborates, this investigation brings validating concerns regarding the valuation of private credit funds:
In a somewhat ironic twist, The Cradle is covering a Financial Times story (hat tip Kevin W) Trump’s $40bn Hormuz insurance scheme fails to cover a single ship: Report. We had anticipated its eventual failure:
Two months after President Trump announced a $40 billion initiative to insure vessels navigating the Strait of Hormuz, not a single dollar of coverage has been dispensed, according to a report by the Financial Times on May 18.
“Despite the up to $40 billion program, it has yet to be utilized, as two sources familiar with its operations indicated, even as insurance rates remain several times higher than pre-war levels,” stated the FT.
As insurance brokers revealed to the British newspaper, Trump’s plan faltered because it couldn’t meet the necessary criteria for vessels transiting the strait and relied on the U.S. Navy for military protection, which has not been feasible.
As this post has become lengthy, I must address an essential topic at the end. Sky News has provided on-the-ground coverage from Minab, exposing the U.S. war crime committed there. I encourage everyone to watch their documentary and disseminate it widely.
That’s all for now. See you tomorrow!
____
1 See the BBC landing page around 5:00 AM EDT:
And the Wall Street Journal landing page at the same time:
The Bloomberg US landing page does highlight the latest Trump updates prominently:
2 Commodities expert Jeff Currie highlighted that, even with reduced attacks by Ansar Allah on Red Sea shipping, traffic on that route has remained at only 75% of pre-war levels (and the latest strikes were aimed at vessels bound for Israel).
3 While there were denials from some unnamed U.S. officials, it’s clear that:
The U.S. Treasury Secretary is calling on “the world” to join in imposing sanctions on Iran.
Scott Bessent made this statement as G7 finance ministers convened in Paris amid global economic turmoil. pic.twitter.com/M0ht5nDMps
— Al Jazeera Breaking News (@AJENews) May 18, 2026
4 When Spain’s President Sanchez announced he would not permit the U.S. to utilize Spanish airbases in the Iran conflict, he suggested the U.S. would simply take over those facilities. See at 0:30:
Wilkerson’s observation stands valid.
5 Al Jazeera provides confirmation of the substantial chasm existing between the negotiating parties. A notable entry from Al Jazeera’s live blog is this:
Iran and the U.S. remain at an impasse on critical issues
Serious differences persist between the negotiating parties.
In a recent address to the National Security Commission, Iran’s Deputy Foreign Minister Kazem Gharibabadi emphasized that Iran will not relinquish its right to enrich uranium.
This remains a major sticking point, as American proposals demand that Iran cease uranium enrichment for a period of two decades.
Iran has firmly rejected this, stating that such a duration is excessive.
Iran insists on an assurance that hostilities will cease on all fronts, including Lebanon, before discussing its nuclear program.
Americans have declined this request, asserting that it depends on the course of negotiations.
Iran is also requiring that the U.S. terminate its blockade of the Strait of Hormuz, while the U.S. has stated that Iran must first reopen the strait.
Additionally, Iran demands reparations for war-related damages, which the Americans have categorically refused.
Iran is asking that U.S. forces withdraw from the region, particularly from GCC countries, and that all related sanctions regarding the nuclear issue, human rights abuses, and accusations of terrorism be lifted, which the U.S. has also declined.
5 Confirming Ambrose Bierce’s definition in his Devil’s Dictionary:
Alliance: In international politics, the union of two deceivers whose hands are so deeply immersed in each other’s pockets that they cannot exploit a third party independently.
