Trump writes:
Based on the fact that discussions with the Islamic Republic of Iran
have been brought to the highest level of Iranian leadership and
approved, I have, as President of the United States of America,
cancelled the scheduled strikes and bombings against Iran this evening.
Discussions and final points have been, in both concept and great
detail, approved by all parties involved, including the United States,
Israel, Saudi Arabia, UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait,
Jordan, Egypt, and others. The Naval Blockade will remain in full force
and effect until this Transaction is finalized — Time and place of the
signing to be announced shortly.
Oil prices are quickly lower.
Update: Israel’s N12 also reports that there is an agreement.
Earlier, energy executives warned the White House that oil reserves are running dangerously low, according to a CNN report.
The concerns conveyed to Cabinet officials and White House aides have
centered on industry stockpiles that are projected to reach critical
lows perhaps in a matter of weeks, three sources familiar with the
private discussions told CNN.
Those types of warnings are likely why the US is continuing to try to negotiate a deal with Iran. The flipside is that Iran likely sees time on its side and that’s why they’re “tapping along” negotiations as he says.
In this week’s US EIA weekly supply report, oil inventories were drawn down by 9 million barrels per day following 7 million the week prior.
In my model of what’s happening is that –aside from huge strategic reserve releases — the physical market believed Trump early in the war (and may continue to believe) that he will get the strait back open. So instead of preserving inventory, they sold it rapidly in order to capture what they believed would be a short-term rise in prices.
The risk is that the conflict doesn’t end. In that scenario, the buffers are all gone and there will be a rapid repricing in crude. If that’s the case, then the US will be in an even-worse negotiating position, particularly as mid-terms approach.
Again, Iran may sense all this but it’s facing its own domestic difficulties and casualties in the war. They may also believe this is the best deal they can get.
A separate report from NBC says that an Qatari delegation was in Tehran yesterday for negotiations but returned home this morning. The visit was coordinated with the United States. Trump’s post may indicate that the US got something they wanted from that visit.
This is obviously a great step towards peace and ending this rollercoaster of headlines surrounding the war.
Update: The NY Post spoke with Post and says Trump told them a deal is “pretty much all wrapped up”.
This article was written by Adam Button at investinglive.com.
