Is Iran trying to play to the optics of a deal during the past week?
One of the preconditions for a deal or framework agreement, however you want to put it, is that the US wants Iran to loosen restrictions over traffic through the Strait of Hormuz. Despite US president Trump's claims that the US is in control of the strait, we all know that the truth of the situation is that Iran still holds the cards here.
As such, Washington wants Tehran to give up some semblance of control in order to progress to the next stage of agreeing on nuclear terms. So far, that has been the play by play over the past few weeks.
But since last week, there has been a bit of a change in the rhetoric by Iran. The navy is claiming that they are allowing more ships and vessels to pass through the Strait of Hormuz.
Last Monday, they claimed that there were 26 vessels that passed through. However, independent analytics show that only around 10 ships crossed the waterway during that period.
Then on Friday, Iran claimed that there were 35 vessels that passed through. But once again, independent analytics show that only around 10 ships did cross the waterway during that period.
Now again, independent shipping data might not include domestic Iranian shadow-fleet tankers and minor cargo barges - both of which likely is included in Iran's calculations. But if anything, it still reflects that there isn't any major improvement in terms of passage for commercial vessels whatsoever.
Fast forward to today, and Iran is now claiming that 33 vessels passed through the Strait of Hormuz in the past day. But at least this time, it seems to involve two LNG tankers - one for Pakistan and one for China. That being said, these two supertankers were stranded in the Gulf region for nearly three months.
In any case, are you starting to sense a pattern here?
It seems that just so for the optics, Iran is trying to make it look like they are "opening up" passage through the strait. Even if it still might be tightly controlled and with just some exceptions, the narrative that Tehran is trying to sell is that they are trying to do their part to stick to what the US wants - even if the numbers are fake.
With the US also arguably desperate to progress with a deal, they may just turn a blind eye and accept this pre-conditioning from Iran. That even if the fact of the situation is all made up of fluff and Iran hasn't actually pulled back on its control over the strait.
But at this stage, both sides just seem to what to advance with some token gestures and then to reassess the situation again when neither side ends up living up to their end of the bargain. I sense that is what we will nudge towards.
For markets, the issue is that hope springs eternal. Risk trades are sensing optimism and are rallying accordingly with oil prices also dropping off. However, the reality of the situation remains completely the opposite with physical oil prices staying high as there is still no real movement on the ground (or should I say at sea).
It's going to be a major, major test to see how far markets can detach from the reality of the global economy over time. And this one will be an interesting experiment as traders and investors are more keen to trade on political promises rather than actual data/facts. Is it all going to turn into a house of cards waiting to fall down? We shall see.
This article was written by Justin Low at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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