[This Iran war post was essentially complete at launch time, but I do want to add an important footnote after I go out for personal maintenance. I will add that and any updates by 8:30 AM EDT]
Needless to say, with Trump having sought to turn the spotlight away from Iran in the runup to the long US holiday weekend, news coverage has slacked off a bit. The US has sent another proposal to Iran which Iran is studying. This tweet importantly depicts Iran as willing to make significant concession on nuclear enrichment:
🗞️ Latest on U.S.-Iran Negotiations:
1. Iranian Foreign Ministry spokesperson Esmaeil Baghaei said today that negotiations between Tehran and Washington are continuing “through Pakistani mediators,” in remarks carried by IRNA.➤ “Basically, what we want is not a demand but our… pic.twitter.com/ACjSSZd6Zj
— Drop Site (@DropSiteNews) May 20, 2026
From the detail:
3. Drop Site News’ Jeremy Scahill revealed on Tuesday details from his latest conversations with Iranian officials about what Tehran may be prepared to offer in a broader settlement:
🔹officials indicated they could agree not to clear rubble from the three main enrichment facilities bombed during the U.S.-Israeli war,🔹potentially suspend uranium enrichment for a limited period,🔹and eventually transfer enriched uranium to Russia or China in exchange for yellowcake for civilian nuclear use
➤ Iranian officials insist any agreement must first address an end to the war, the Strait of Hormuz crisis, sanctions relief, and the repatriation of frozen Iranian assets, Scahill noted.
However, this is dead on arrival. The US will not accept sequencing, which they like to depict as Iran foot-dragging and bad faithe, even though many have pointed out the JCPOA negotiations showed it takes years to complete complex nuclear agreements.
And that is before getting to other elephants in the room, like the US being negotiation and agreement incapable.
Trump and Netanyahu had an argument over Trump pausing his attack plans. Breaking Points has a good recap:
From a lightly-edited machine transcript: starting at 3:30
Ryan Grim: So, let’s start with President Donald Trump. So according to Amit Segal of Channel 12 News in Israel, Trump and Israel over the last several hours apparently had a quote uh what lengthy and dramatic call. We can put up A 0 [image of tweet appears] and so again so this is coming from Amit Segal. Trump and Netanyahu held a phone conversation last night that was described as quote lengthy and dramatic unquote. Recently, Segal goes on become clear that Netanyahu believes less in the chances of reaching an agreement. That is shocking to me. And he wants a strike. Wow. Netanyahu really breaking with his past demands here.
“While Trump wants to turn over every stone to reach an agreement.” Oh, I’m sure he absolutely does. Okay.
So, Amit Segal, for those following this, uh, this program closely know that, he’s very close to Netanyahu, almost kind of a a spokesperson of sorts, though he’s an Israeli journalist.So that that is the kind of Netanyahu version of this of this call. Um, we can put up A1 before I think we get into this.
Trump recently had said o on Monday, he had said that he was going to attack Iran on Tuesday. But then I think he quickly realized that if he didn’t back off of that quickly, he would have to back off of it on Tuesday and that would mean another TACO Tuesday, which is embarrassing, more embarrassing than a TACO Monday. We put up A1 here. Uh, so he has responded by saying that they have actually, OK then now they have two or three days. We can roll this here
Trump in video clip:
Well, I I mean I’m saying two or three days, maybe Friday, Saturday, Sunday, something maybe early next week. A limited period of time, because we can’t let them have a nuclear weapon. If if they had a nuclear weapon, they would start with Israel. They would blow it up and they would blow it up fast, but they’d blow it up. And I’ll tell you what, they’d go after Saudi Arabia. They’d go after Kuwait. They go after UAE. They go after Qatar. They go after I think they go after the entire Middle East. And it would be a whole different negotiation. It would not be It would be, it would be nuclear holocaust. And there’s no question in my mind that they’d use it. There’s no question. AND I DEAL with these people.
They’re extremely radicalized.
These are not people like when I deal with you.
Emily: ….I actually think part of what Trump is doing is is he knows that it’s bad for him to go back into a hot conflict. He knows that it’s bad politics and he is procrastinating. He’s trying, maybe he doesn’t think of it as procrastinating, but he is trying to do absolutely everything that he can within uh the sort of parameters set for a man who is a staunch ally of Netanyahu to just he sees the delay, let me put it this way, he sees the delay as being better than going into action and he’s maybe just hoping something pops. But there’s really nothing because of the impasse over the straight of Hormuz and his nuclear enrichment. There’s really nothing that he can do. So he’s just frozen in time right now. And it it just feels like inevitable because nobody’s budging. Nobody has any reason to budge.
Ryan: Basically, we do seem to be stuck in this really kind of brutal um it’s not even an escalation trap at this point. It’s just kind of a trap.
There is one huge contrary factoid in this mess. Trump has pushed the window for action by only a very few days. He has pounded on this point. He has not set expectations that if there is progress, negotiators would meet to hammer out a text. That would easily allow him to temporize a few more weeks.
The Aljazeera live feed provides of confirmation that the US is still in fire-breathing mode:
Trump official warns Iran of unprecedented military action over deal holdoutWhite House Deputy Chief of Staff Stephen Miller has issued a stark warning to the Iranian leadership regarding the ongoing standoff as negotiations have failed to progress.
Speaking to Fox News, Miller said that the current administration in Tehran faces a critical ultimatum from the US.
“This new team in Iran has a choice to make,” Miller said.
“They can either agree to a piece of paper that is satisfactory to the United States, or they can face a punishment from our military, the likes of which has not been seen in modern history. That’s the choice that they face,” he said.
Now perhaps Trump again plans to shift blame next week to the Saudis, the Kuwaitis and the UAE, which he had depicted as petitioning him for negotiations. Larry Johnson argues that the Saudis control what might happen, in his recent posts, Trump Wants to Attack Iran, But Does Saudi Arabia Hold the Keys? and A Religious Reason the Saudis Are Blocking a New Attack on Iran.
The Saudis have even more reason to be concerned, since not only is the Bab el-Madib straight vulnerable, but it may be turning into a hot spot:
And the costs incurred across the Gulf are not trivial:
Military expert readers are encouraged to correct me, but other scenarios seem possible.
Some of the things Larry Wilkerson has said (and recall he was a military officer, teaches military officer, has extensive experience in the region and presumably more contacts) call into question some of Johnson’s arguments. Wilkerson said the Saudis have already lodged a protest over the use of their bases and airspace before the latest Gulf-State-blaming TACO. Wilkerson additionally said that would not be sufficient to deter the US, that the Saudis would need to threat to physically prevent the use of the airbases.
If you read the Johnson pieces, you will see he assumes air strikes as being the main, probably the sole, component. He also assumes the US would need to use Saudi bases and/or airspace to execute that sort of attack,
A key question is whether the US could execute a mission only using Saudi airspace and not the bases. Pray tell, how would the Saudis stop the US from overflying Saudi Arabia? Are they about to scramble jets? The US could easily operate on “Ask for forgiveness, not permission” mode.
A second question is whether Saudi indulgence is necessary. Could the US execute a Special Forces operation from the UAE? Recall the US was reported as asking the UAE to take that on, specifically to take Lavan Island. The Emiratis allegedly refused. Could that have been a big ruse to take the focus off the UAE as the main staging ground for an Special Forces-heavy operation (recall that even though the Iraq government is friendly to Iran, it does not control the full country, so Iraq-based assets could also play a role)
Recall the Iranians flew F-15s under the radar to hit Kuwait and successfully run away, so it would in theory be possible to provide some air support from the UAE.
The specific reason for wondering if the UAE is part of a deception operation is it absolutely did not belong on the list that Trump provided in his Truth Social post and kept repeating, of counties pressing him to negotiate, not attack. Others noticed the disparity:
Trump lumping the UAE together with Saudi & Qatar is an oversimplification & a pretext to backdown from unattractive military options.
Saudi, coordinating closely with Pakistan, wants to midwife a diplomatic off-ramp. The risks on another round out-way the benefits for them.… pic.twitter.com/Bh9R9vzSr2
— Firas Maksad (@FirasMaksad) May 19, 2026
And:
UAE are Israels trajan horseActively genociding sudanese and dividing somalia into multiple countries
— H (@H26339022) May 20, 2026
The UAE has lashed itself to the Israel mast. It has remained extremely hostile to Iran in the face of continued Iran attacks. It does not seem plausible that an attack from the west that did minor damage (but near) a nuclear site would produce a Damascene conversion. Russia has been party to far more sustained attacks on the Zaporzhizhia nuclear plant and has not turned tail.
In addition, the US still has a ton of Special Forces in theater. This is an awful lot of camouflage if the plan now is simply air strikes.
Larry Wilkerson also said last week that his contacts told him the US was still planning a ground, as in Special Forces, operation to take the enriched uranium. That is completely nuts. But what if Trump plans something performative, like his famed “obliteration” of Iran’s nuclear sites last summer? Admittedly he had Iran’s cooperation then. But what if the US actually were able to get in and take a teeny amount from one site and declare they had greatly harmed Iran? Do not forget that Trump (as Tom Stone and others regularly point out) has lost his mind (to white matter disease) and desperately needs a face-saver.
Oil dropped markedly yesterday and many readers thought that was the result of Trump negotiation pom-pom waving. However, the Financial Times, in a then-lead story, explicitly attributed the easing to some full oil tankers leaving the Gulf:
From the story:
Two supertankers carrying Iraqi oil to China passed through the Strait of Hormuz on Wednesday, raising hopes of a partial opening of the vital chokepoint for Middle Eastern energy and sending crude prices tumbling.
Shipping data showed the two ships traversing the strategic waterway. A third supertanker transporting Kuwaiti oil to South Korea was also shown to be in the strait before its transponder was switched off.
Collectively, the three ships are carrying 6mn barrels of oil, potentially the largest volume to exit the Gulf in a single day since the US and Israel started the conflict with Iran at the end of February.
The supertankers steered through the northern side of the strait, following a route designated by Iran. “It is most likely that there was a deal done with Iran,” said Matthew Wright, lead shipping analyst at data company Kpler.
Analysts at shipping data company Windward said the passage of the ships, two days after Iran launched a new agency to administer permits and charge tolls, suggested the strait “is no longer a closed corridor but a contested and tiered-access environment”, shaped by US and Iranian enforcement.
To boost the credibility of its new agency, Tehran also on Wednesday said 26 vessels had passed through the strait over the previous 24 hours, although it was not possible to verify the claim using ship-tracking data.1
Note that the market happy dance took place against a backdrop of deteriorating fundamentals. From NO1:
Oil market structure: the slow-motion tank-bottom crisis
US refineries ran at 91.7% capacity, yet commercial crude inventories still drained 4.3M barrels; gasoline stocks fell 4.1M barrels and sit 5% below the five-year average
Record 5.6 million barrels exported last week — 2nd highest ever. The US is exporting its way to empty
Oil futures volatility remains elevated and has not declined in a month — per JustDario, “the whole oil market is a giant pressure cooker”
US jet fuel output yield at record 12.7% per Kobeissi, up 2.2pp since the Iran war began — refiners producing ~250K extra barrels/day of jet fuel to compensate for Hormuz closure cutting off ~400K barrels/day
ADNOC CEO: Hormuz shutdown is “most severe supply disruption on record”. New UAE oil pipeline almost 50% complete
Trump jawboning oil price lower with “final stages” talk; JustDario calls it fake news delivery, notes no demand destruction at ~$100/barrel per EIA
However, it is still significant that three supertankers went through, two with Iraqi crude going to China, one with Kuwait crude to South Korea, all through the tollbooth.
Iraq is on Iran’s side (even if the government does not fully control the country) and the US is unlikely to mess with China bound carriers, at least for a wee bit, since Xi agreed to buy 200 Boeing jets after all. For once, Trump did not lie!
The US will not hinder a carrier from Kuwait going to South Korea, even if (as with the other 2 supertankers) the formal rule is the Navy is to stop any ship using the Persian Gulf Authority channel.
But a key point on the Iran side is ZOMG Kuwait. Kuwait was an enemy and Iran was not letting enemy ships pass. Does this mean Kuwait and Iran have reached a modus vivendi?
The US has had some success in barking and getting ships to turn around. The last tally I saw from TankerTrackers showed the ratio is >5 for every capture.
The US saved its manhood a teeny bit by seizing an Iran ship in the Sea of Oman just now, as in beyond the Strait:
CENTCOM says US forces boarded, redirected Iranian-flagged tanker in Gulf of OmanUS Central Command (CENTCOM) says US Marines boarded an Iranian-flagged commercial oil tanker in the Gulf of Oman that was suspected of trying to break the Trump administration’s blockade on Iran’s ports.
“American forces released the vessel after searching and directing the ship’s crew to alter course,” CENTCOM said in a statement.
There was no immediate comment from the Iranian authorities on the incident.
CENTCOM added in its statement that the US military has “redirected” 91 commercial ships since the blockade was put in place.
Lloyd’s List in US boards and releases Iranian tanker as PGSA outlines Hormuz boundaries said Marines inspected a “product tanker” Celestial Sea before letting it proceed on its merry way.
And the US has intercepted other vessels:
US forces seized the falsely-flagged Ghost Fleet tanker SKYWAVE (9328716) in Indian Ocean, between Indonesia & Sri Lanka.
It was sailing from the Malaysian EOPL back toward Iran.
SKYWAVE was blacklisted by @UANI in 2023 and added the the #GhostArmada List. It was… https://t.co/eawg5EAmf4 pic.twitter.com/9brkDJ90nI
— Charlie B (@supbrow) May 19, 2026
The wee issue here, as we have said repeatedly, is many ship operators are correctly risk averse.2 Early in the war, both Bloomberg and Lloyd’s List ran stories of what would be necessary for carriers to feel comfortable taking cargoes through the Strait of Hormuz. The majority said they would need the war to be over AND to have escorts (as in they still felt exposed to rogue element attacks from the short) or for there to have been a period of safe transits. Recall that Jeff Currie said that even though the hot action by Ansar Allah in the Red Sea was over two years ago, traffic levels on those routes are at 75% of the earlier level.
So any level of shooting in or around the Strait of Hormuz, as well as a generally lame US blockade, will still lower traffic levels.
https://www.aljazeera.com/news/liveblog/2026/5/20/iran-war-live-tehran-warns-of-many-more-surprises-if-conflict-resumes
And on the economic front, experts expect bond prices to keep rising and in time pull down stocks.
This bond maven argues that bonds, just like stocks, are subject to “buy the dip” behavior by yield-hungry investors, but the direction of travel is for higher interest rates:
This second segment argues a stock selloff is likely as bond yields rise. Note as we have pointed out that uncertainty is also a dampener to investor optimism:
NO1 catalogued how US some consumers are cracking under the weight of their borrowings. From his daily update yesterday:
Consumer debt reaching crisis levels
Credit card serious delinquencies at 13.1%, highest since Q4 2010, with the +5.5pp surge since Q3 2022 exceeding the 2007-2010 Financial Crisis increase
Auto loan delinquencies at 5.6%, record high
Student loan 90+ delinquencies at 10.3%
40% of Americans earning $300K+ living paycheck to paycheck per Goldman
Mortgage rates hit 6.75%, highest since July 2025. Housing affordability at all-time low
Market now pricing 37% odds of Fed hiking in 2026; rate hike by January above 55%
Food is another flash point:
Food is set to become even more expensive:
World fertilizer prices have surged +44% since the start of the Iran War, to the highest since 2022.
This comes as ~33% of globally traded fertilizers pass through the Strait of Hormuz, which remains effectively closed.
This includes… pic.twitter.com/cg9Kbf6eAT
— The Kobeissi Letter (@KobeissiLetter) May 20, 2026
____
1 Some tweets claim they verified the Iran claim:
Navigation data shows 26 ships passed through the Strait of Hormuz in the past 24 hours after coordinating with Iran, consistent with the IRGC’s statement that the Strait is open under Iranian control.
26 ships in 24 hours is still far below pre-war traffic (~3,000… pic.twitter.com/hy3Kdhp0YG
— DD Geopolitics (@DD_Geopolitics) May 20, 2026
But this is an informationally polluted environment:
Deceptive patterns spread as cargo vessels adopt the tanker playbook.
Yesterday’s imagery from the Basrah Oil Terminal reveals a growing trend in location manipulation to bypass regional blockades.
– 9 vessels were detected spoofing their positions in the Basrah waiting area-… pic.twitter.com/ewKK9qXUtq
— Windward (@WindwardAI) May 20, 2026
And Hormuz Letter argues this may be a sign of an imminent attack:
BREAKING: Massive AIS spoofing activity is occurring in the Persian Gulf northwest of Dubai right now, with hundreds of ships transmitting false positions in the same coordinates. The same spoofing is happening simultaneously with aircraft transponders in the same location, per… pic.twitter.com/zisTzP4Zrc
— The Hormuz Letter (@HormuzLetter) May 21, 2026
2 They no doubt also appreciate that insurance contacts amount to a right to sue the insurer to try to get them to honor them.
