US Attacks Iran's Qeshm Island On Election Eve

US Attacks Iran's Qeshm Island On Election Eve

TYLER DURDEN

Summary

• US bombs Qeshm Island on Monday: confirmation comes after a series of explosions were heard in the region.
• Trump Delays Iran Decision: Trump says he is in no rush to resume strikes, favoring more time for diplomacy despite Netanyahu's reported push for renewed military action.
• Ayatollah Signals Openness to Talks: Supreme Leader authorizes dialogue with Washington as Qatari mediation reportedly makes progress toward a draft agreement.
• Faster Hormuz Reopening on the Table: Iran says it could reopen the Strait within two days if Washington accepts its demands, including lifting the US blockade.
• Oil Prices Tumble: Hopes of a diplomatic breakthrough send Brent toward $106 and WTI below $100, triggering a broader risk-on market rally.
• Supply Risks Persist: Nearly 1 billion barrels have reportedly been drained from global inventories, leaving oil and diesel markets vulnerable to renewed escalation.

Since Sunday into Monday, Iran headlines were driven by a return to 'peace talks imminent' claims, pushing down oil prices; however, late in the day we learn via official channels speaking to The Wall Street Journal that President Trump just bombed Qeshm Island earlier the same day.

This bold and risky act came right on the eve of the midterm elections, at a moment the war remains deeply unpopular with voters. But interestingly, Trump didn't openly announce the attack, like with some prior escalations and bombings.

"The U.S. attacked Iran’s Qeshm Island on Monday, U.S. officials said, in the latest of a series of limited strikes Washington has secretly carried out against the country in recent weeks as President Trump touted the possibility of a diplomatic deal," WSJ writes. The paper further underscores that he spent the whole day signaling there won't be a renewed bombing campaign against Iran any time soon:

The assault follows comments by Trump playing down the possibility of a return to war with Iran after Tuesday’s midterm elections. 

“We had a war with Iran. We won,” Trump told reporters Monday. “I don’t know if you even call it a war because we haven’t been doing any fighting for months.”

But the U.S. has been engaged in smaller-scale strikes against Iran for several weeks, officials said, with explosions reported around Qeshm island on Monday on social media. Some of the officials described the assaults as defensive in nature to prevent Iran from having the freedom to attack commercial ships in the Strait of Hormuz. .

So there's clearly a political reason for the administration not officially reporting such strikes. It would certainly negate any attempt to portray de-escalation in the conflict.

"The U.S. has been purposefully keeping the campaign quiet so as not to signal any intention of resuming major combat operations," one official speaking to the Journal says.

On midterm election eve, President Trump is seeking to appear confident and is trying to reassure voters. He told Axios in a phone interview published Monday afternoon that he's "in no rush" to decide whether to resume attacks on Iran.

There's lately been an avalanche of speculation saying that he's likely to order a new bombing campaign soon after the midterm vote on Tuesday. There are also reports saying that Israel's Netanyhu is strongly lobbying for renewing the war. Of course, Trump knows the war is deeply unpopular with the average voter (on both sides of the aisle) right now, and so the obvious attempts at 'calming' the populace...

Iran's Supreme Leader Floats More US Talks In Rare Overture

Oil is tumbling in the wake of a somewhat rare headline out of Tehran:

• Iranian President Pezeshkian says the Supreme Leader has granted the government some authority on dialogue, ISNA reports
• OIL FALLS TO INTRADAY LOW, BRENT TRADES NEAR $106/BBL
• Oil prices down 6% on hopes of US-Iran diplomacy

This marks some of the most significant confirmation yet that the Supreme Leader - who has been in hiding and not seen in public since the assassination of his father upon the opening of Operation Epic Fury - is still 'open' to a negotiated solution to the war. It has long been speculated that he and the more 'hardline' IRGC and affiliated officials are against talks and are preparing for war.

Meanwhile, more Monday reporting of 'breakthroughs' via regional sources - and the possibility that Washington might give up on insisting the nuclear enrichment issue be resolved...

A breakthrough in US-Iranian negotiations was seen after Qatari mediation successfully overcame procedural obstacles, reports Al Jadeed citing a diplomatic source

• The US is leaning towards not making the nuclear issue a priority and instead including it within the overall negotiation framework.
• Washington's priority is achieving a breakthrough in the nuclear file, which Trump would present to the American people, in exchange for concessions on other issues in favor of Iran.
• There are fears that Netanyahu will succeed in undermining the breakthroughs in the US-Iranian negotiations and pushing the region towards escalation and war.
• Any US-Iranian agreement will inevitably have repercussions for Lebanon, while any war on Tehran would be fateful and would push Hezbollah to enter it.
• Implementing any agreement on Lebanon requires Israel's conditional approval, which is contingent upon Hezbollah's disarmament and the dismantling of its military apparatus; otherwise, Israel will launch a war to achieve its objectives.

Presdient Trump too has signaled he wants to give diplomacy more time, amidreports that Israel's Netanyahu is lobbying for more military action.

Newsquawk notes of the immediate reaction in markets: Risk-on trade seen as reports Iran's Pezeshkian said the Supreme Leader has granted the government some authority on dialogue got wider airing; downside in oil and the Dollar, with upside in US equity futures, Treasuries and spot gold.

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