Key insights
- Iran's insistence on security guarantees before a ceasefire introduces significant uncertainty. This deviation from Western expectations regarding negotiation sequencing could lead to prolonged instability in the Middle East, potentially disrupting oil supplies and negatively impacting US equities due to increased geopolitical risk and energy price volatility.
Despite the single post here suggesting otherwise, Iran's Foreign Minister REJECTED a ceasefire prior to Iranian security guarantees being inked:
What the equities markets are signaling today is that the West has misunderstood the sequencing.
The West thinks that any ceasefire comes first, then Hormuz negotiations start and are linked to an eventual inked security guarantee.
Iran is saying "No no no no. Ink a security agreement and take actions with respect to our security FIRST. Then we will agree to a ceasefire."
Very different sequencing. Very different outcomes for oil and equities.
I remain a....raaaawwwwrrrrr....BEAR!