The US and Iran have held off attacks for a third consecutive night. Trump is giving diplomacy “some space,” according to UN Ambassador Mike Waltz, after advisers weighed limited Patriot interceptor stockpiles. Iran’s military halted retaliation against US bases in the region, ending near-daily strikes on Kuwait, Bahrain and Jordan. The White House reiterated Trump prefers a diplomatic solution yet retains all options if Iran continues targeting the Strait of Hormuz or allies.
Shipping through the strait remains negligible. Iran forced six vessels in the southern corridor to turn around on Monday and insists it alone sets transit terms. Omani-Iranian talks over the weekend were described as constructive with ongoing consultations, though Tehran still seeks effective control, possibly via joint management. The US maintains its blockade of Iranian ports. Parallel Houthi-Saudi clashes in the Red Sea have added further shipping risk.
Trade analysis
Bullish (YES) signals:
- Active pause and Trump’s stated preference for diplomacy
- Omani mediation channel and mutual economic incentives to de-escalate
Bearish (NO) signals:
- Iran’s unchanged control claims over Hormuz and low traffic
- Rhetoric rejecting US timing of any conflict
Mutual economic pressure and the pause create modest room for talks, yet the core barriers such as Iran’s demand for Hormuz sovereignty and deep distrust remain intact. Our base case still leans toward NO as the pause reduces near-term risk but does not restore trust needed for a nuclear deal inside the remaining five months.