Oil And Bond Yields Higher Following First US Attack On Iran In Weeks

US strikes Iran’s Larak Island

Politico reports US strikes Iran’s Larak Island

U.S. forces struck Iran’s Larak Island on Sunday, a U.S. official said, after observing military personnel preparing to deploy rockets loaded with sea mines into the Strait of Hormuz.
“I can confirm that earlier today U.S. forces struck two Iranian launchers on Larak Island,” U.S. CENTCOM spokesperson Capt. Tim Hawkins said in a statement.
Sunday’s strikes in Iran mark the first from the U.S. in a month. Last week, Trump announced in a TruthSocial post that the U.S. Navy removed all mines from the strait’s main shipping lane, and Iran was notified that any new vessels attempting to place new mines would be “immediately and systematically destroyed.

The Wall Street Journal reports U.S. Strikes Two Iranian Rocket Launchers

U.S. forces attacked two Iranian rocket launchers in the Strait of Hormuz on Sunday, marking the first American strike in weeks, the U.S. Central Command said.
The command said that the Iranian launchers, which were deployed on Larak Island, were preparing to fire rockets filled with sea mines into the strait when they were struck.
“Last week, Centcom completed clearing sea mines from the strait’s international shipping routes,” said Capt. Tim Hawkins, the spokesman for the command. “We simply will not allow Iran to emplace more mines.”
Brig. Gen. Hossein Mohebi, a spokesman for Iran’s Islamic Revolutionary Guard Corps, said the U.S. strike was “a strategic and fatal error by the Trump administration” and would lead to “severe repercussions,” according to the country’s official news agency.

Iran Retaliation

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Both sides doing avoiding major escalations.

About Using Venezuelan Oil to Fill Reserves

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About The Drawdown in Reserves

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Market Reaction to the Attack

The market reaction is relatively muted.

Oil is up 1.4 percent, gold down about a half percent, and treasury yields are up much more at the short to middle part of the curve than the long end.

Protracted War

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If so, the price of diesel will hit a new record high. That’s only 20 cents away.

Both Iran and Trump are waiting each other out. Politically speaking, Iran gains.

Record high diesel could easily cost Republicans Iowa or Ohio.