Is the fog of war thinning or thickening? President Donald Trump has suggested that he is getting ready to declare victory. However, the Iranians have been at war with the US and Israel for 47 years and are showing no signs of ending it.
On Friday night, Trump posted on Truth Social that the US is "getting very close to meeting our objectives" and is considering "winding down our great Military efforts" against what he termed the "Terrorist Regime of Iran." Paradoxically, earlier that same day, he told reporters, "I don't want to do a ceasefire. You don't do a ceasefire when you're literally obliterating the other side." He seems to prefer a unilateral conclusion where the US stops because it has "won," rather than a negotiated truce.
Even as he mentions an exit, the Pentagon is reportedly deploying about 2,500 additional Marines and three amphibious assault ships to the Gulf. The President may or may not order the Marines to take over Kharg Island or to stop the Iranian blockade of the Strait of Hormuz. Saturday night, Trump threatened to "obliterate" Iran's power plants if Tehran does not fully reopen the Strait of Hormuz within 48 hours. That might require a proof of concept to work. The war ain't over till it's over.
Iran continues to block the Strait of Hormuz effectively and selectively. It is allowing tankers loaded with Iranian oil for China and India to pass through the Strait. Iran is also extorting tolls from vessels passing through the Strait. The Iranians are probably monitoring Polymarkets.com, which shows that the Democrats will win a majority in the House in November's midterm elections (charts). The Republicans might even lose the Senate. The Iranians must figure that if they can keep oil prices elevated through the US midterm elections, the Republicans will lose at least the House if not the Senate as well. They must hope that the Democrats might cut off funding for the war.
Now, let's review the impact that the war is having on the energy and financial markets:
