It Sure Looks Like Things Are Coming Apart

I need to take my car in for service this morning, but I want to post a bit of a roundup. There are a lot of things happening that, naturally, aren’t making it to the MSM. The walls of reality appear to be closing in on Trump and, as usual, he’s trying to deny reality or—failing any response from reality—to shift the blame. This was ultimately all his choice.

Here’s Iran’s president explaining exactly why Trump can expect absolutely zero break from Iran:

Clash Report @clashreport

Iranian President Masoud Pezeshkian:

No matter how much I think about it, I cannot find any logical reason why they killed our Leader, our commanders, and our scientists.

Many of our commanders and scientists who were killed did not even own a home.

So the bottom line looks a bit like this:

Philip Pilkington @philippilk

22h

US media: “A deal on the Strait will be signed this week.”

Iranian media:

But Iran has time on its side—absolutely no hurry. In fact, they’re looking for ways to extent the timeline:

Philip Pilkington @philippilk

20h

An Iranian news story from six hours ago. Boy oh boy, do the Iranians have the Americans over a barrel right now…\

Trump is trying to scramble back to the MOU—for a few months. Why would Iran even nibble at that?

Javier Blas @JavierBlas

Iran also says that it has received “messages” from the US indicating that Washington is ready to return to its MoU pledges (most likely meaning lifting the naval blockade and oil sanctions). The new Oman-Iran arrangements would be valid for 2-4 months.

No dice. Counter offer: You surrender. Totally.

HFI Research @HFI_Research

In other words, the US needs to lift the blockade, lift the sanctions, give the Iranians the sanctioned funds, and only then, would the Strait of Hormuz reopen under Iranian control.

So we are back to square 1.

Fars:

Under What Conditions Will the Strait of Hormuz Be Reopened?

A source close to the negotiating team: Contrary to some speculations and media reports, the lifting of a limited number of sanctions by the U.S. Treasury is related to the interactions between the Iraqi government and Washington, and has no connection to the Iran-U.S. agreement.

The United States, by violating the Islamabad agreement, disrupted the established traffic flow in the Strait. In addition to military attacks and the creation of a naval blockade, it hindered access to Iran’s blocked funds by lifting exemptions for oil and petrochemical exports. The return to normal conditions is contingent upon Iran implementing measures in the Strait of Hormuz, and the United States genuinely and tangibly fulfilling its commitments.

This informed source emphasized that if the agreement between Iran and Oman is finalized, the reopening of the Strait of Hormuz will require separate arrangements that also include the fulfillment of U.S. commitments.

Meanwhile, inside the regime, Trump is in denial. No matter what the Pentagon tells him, he’s insisting that the US has plenty of munitions. He’s blowing a gasket and blaming everyone but himself for the corner he’s in:

The Hormuz Letter @HormuzLetter

2h

BREAKING: Trump lost his temper and clashed with Secretary of War Pete Hegseth at Camp David on Friday over extreme US munitions shortages that have limited US military options with Iran, with Trump demanding answers from Hegseth as he thought the munitions issue “had been fixed,” per WaPo.

Hegseth defended himself by blaming his deputy Stephen Feinberg for the shortages, prompting Trump to make a “very angry” phone call to Feinberg on Friday evening, with Feinberg then hastily convening a “crisis” meeting of senior military and defense acquisition officials that night to address ways to quickly replenish weaponry.

Hegseth was one of the biggest early advocates for taking military action against Iran, convincing Trump it would be a “quick and relatively easy win,” but the ATACMS stockpile is now “drained to the extent that there’s basically none left” with the US having used more than 1,300 Army tactical ballistic missiles in the initial weeks alone, and it could be “years” before US inventories are rebuilt.

On the oil front, Chris Martenson and PP are all over that angle. Following up from yesterday:

Mark @Mark4XX

Aug 5

CHRIS MARTENSON: DIESEL IS HEADED TO $8–10 A GALLON

Chris Martenson is a trained scientist who became an investor and relies strictly on data rather than being guided by wishful thinking. He is currently the most vocal in sounding the alarm regarding oil, diesel and the impending rise in costs, which most players on Wall Street still refuse to factor into their price calculations.

THE OIL REALITY HE IS FORCED TO STATE

•  Headline crude prices keep getting crushed on Sunday-night “deal” rumors while real products—especially diesel—are already in short supply across the US, Europe, and Asia.

•  Brent is trading in the steepest backwardation he has ever seen: you pay $13 more for oil delivered in one month than in six months. That is the market screaming near-term shortage.

•  US inventories and the Strategic Petroleum Reserve are at levels not seen since the early 1980s and still falling.

THE PRICE THAT ACTUALLY HITS YOUR LIFE

•  Diesel is the blood of the physical economy. Trucks, mining equipment, and freight all run on it.

•  Martenson now sees no path that avoids $8 to $10 per gallon diesel unless something changes fast.

•  That cost does not stay in the fuel tank. It becomes a permanent cost-push input that shows up in every UPS delivery, every grocery shelf, and every commercial real-estate refinance.

Here’s PP:

Philip Pilkington @philippilk

23h

US is just exporting product to the rest of the world while it suppresses prices. It’s a giant physical subsidy straight from the SPR to refiners with limited capacity.

Giovanni Staunovo @staunovo

The US shipped a record amount of distillate fuel overseas last week as domestic stockpiles fell again, the latest sign that the global scramble for diesel is increasingly draining US supplies.

Exports of distillate fuel, a category that predominantly includes diesel as well as heating oil and other products, rose to 1.9 million barrels a day last week, according to data released Wednesday by the US Energy Information Administration. That’s the largest number on record, eclipsing the earlier high-water mark set in May.

Here’s a clue regarding real oil prices—if real prices were coming down, oil company profits wouldn’t be skyrocketing:

And lastly, the dollar hegemony front:

Philip Pilkington @philippilk·

26m

The US Treasury is printing dollars and buying US Treasury bonds from the Japanese. So the Japanese are in effect dumping US Treasuries but the US is managing the dump by printing dollars and absorbing the bonds. It’s clever - it’s also pretty desperate.

It’s starting to look like a perfect storm. Or a perfect shitshow.