Because it’s been clear for quite a while that escalation and/or prolongation is in Iran’s favor. And why would Iran agree to a Hormuz deal without holding Trump’s feet to the fire over all the provisions of the MOU that he ignored? If Trump thought starting up an air campaign again would wipe the MOU slate clean so he could start all over again, looking for a better deal, then he’s totally mistaken. Having forced Trump to sign the MOU, Iran will never settle for less.
The Hormuz Letter @HormuzLetter
BREAKING: Iran has abandoned the current Omani proposal for the Strait of Hormuz, officially adding new demands, per WSJ:
Note: These aren’t new demands. They’re a reiteration of provisions of the MOU.
1. An immediate end to the US naval blockade
2. The lifting of all US sanctions on Iranian oil, petrochemical products, and gas
3. An explicit acknowledgement of Iran’s right to collect maritime fees on every ship
4. The end of all attacks on Iran permanently by all parties
These new demands come on top of the current arrangement, which gives Iran full sovereign control over inbound traffic into the Strait of Hormuz, and supervision over outbound traffic through Omani waters.
Do not be surprised if Iran continues attacks on US bases. They want all US bases OUT. Attrition is the name of the game.
The Hormuz Letter @HormuzLetter
BREAKING: It is now revealed that Trump has cancelled his planned massive attack on Iran on Saturday explicitly because the US military has exhausted 80% of its THAAD interceptors and 50% of Patriot interceptors, and after talking with Gulf allies who told him they were afraid of Iranian retaliation on their energy infrastructure and fear the US can’t defend them anymore due to interceptor shortages, senior officials tell CNN.
Senior US military commanders warn that the Pentagon’s munitions stockpile is already “dangerously low,” with Joint Chiefs Chairman Gen. Dan Caine privately cautioning that carrying out the planned attack would’ve fully depleted interceptors available to US Central Command to absolute zero.
Sources add “the lack of interceptors means that conventional attacks can backfire if the suicide drones start making it through en-masse,” warning “tit-for-tat will never end this,” with ATACMS and Precision Strike Missiles primarily used up during the war and 50% of the global Tomahawk supply also depleted.
But keep your eye on the Japanese financial crisis. It’s huge for the American economy, it’s driving Trump’s need for a deal.
Roberto Rios @peruvian_bull
this is why America allowed opened the FIMA repo facility and why Japan used it, even though they have to pay 25 bps above IORB
selling billions of dollars worth of treasuries to save the Yen is the financial Sword of Damocles
It’s why Bessent is also using Euros rather than dollars to try to save the Yen.
Luke Gromen @LukeGromen
Japan has trillions of USDs - in our markets - the result of trillions of accrued surpluses over 50-60 years & the investment gains on those surpluses
Seemingly few thinking about what happens if Japan says “Give us our trillions in USD assets so we can finance ourselves - NOW.”
Even with interceptors available, a good proportion of the Iranian missiles and drones were getting through. I don’t believe Ted Postol’s single digit interception rates but I wouldn’t be surprised if the interceptors are less than 50% effective, even when firing multiple interceptors for every incoming missile. The math doesn’t work, particularly when you consider we are Incapable of producing more interceptors to keep up with the demand.
Looks like the Strategic Petroleum Reserve and the Strategic Patriot Reserve will run out simultaneously. Paraphrasing the old Charlie Munger axiom, Iran can stay irrational longer than the US can remain solvent.