The Waiting Game
Hormuz Remains Closed • Moscow Strikes Continue • Oil Holds Near $75
Good morning from Port of Spain. It’s 6:00 AM here. The dogs are outside conducting what appears to be a full-scale military operation against a squirrel, while coffee number one is underway and the overnight headlines continue to pile up.
The biggest political development overnight came from the United Kingdom, where Prime Minister Keir Starmer resigned following an internal revolt within his own party. The move is surprising only because it took this long. The pressure had been building for months, and it finally reached a breaking point.
Meanwhile, Ukraine once again carried out strikes around Moscow. Reports indicate that flights in and out of the region were disrupted as drones targeted sites around the Russian capital. What would have been considered a major escalation a year ago has increasingly become part of the daily backdrop for markets.
In the Middle East, the Strait of Hormuz remains effectively closed as tensions continue to build between Iran and Israel following additional Israeli strikes against Hezbollah positions in Lebanon. Negotiations remain underway in Switzerland, but no vessels have reportedly transited the strait since Saturday.
Adding to the energy story, Qatar confirmed an operational incident at the Barzan gas facility in Ras Laffan during the restart of operations on Sunday. Emergency crews contained the fire, and officials described the situation as under control.
Despite all of this, crude oil remains near $75 a barrel this morning.
That may be the most important headline of all.
Markets continue to signal that traders expect these events to remain contained rather than develop into a broader supply shock. Whether that assessment proves correct remains to be seen, but for now price action remains remarkably calm relative to the news flow.
U.S. futures are modestly lower heading into the session, Treasury yields remain elevated near 4.45%, and the broader market appears content to wait for more information before making its next move.
For now, the squirrel is winning, the coffee is disappearing, and the market continues to bet that today’s headlines will not become tomorrow’s crisis.