I told you Mondays were meaningless:
It’s only 8am but already we’ve given up all of yesterday’s gains and more as Donald Trump, always a man of his word, decided that his 8pm deadline was too boring – so he spiced things up a bit and re-bombed Kharg Island – Iran’s critical oil transfer island.
To be fair to the President, he didn’t say he WOULDN’T bomb Kharg – just that he WOULD bomb Iran’s other Infrastructure in 12 hours…
Cartoon villains are always using verbal tricks to pretend they are keeping their word and this particular cartoon villain move has a name in contract law: it’s called a “negative pregnant” – a denial that implies the truth of the thing not denied.
Trump said he’d bomb Iran’s “OTHER Infrastructure” tonight at 8pm. He did NOT say anything about NOT re-bombing Kharg Island. So technically, re-bombing Kharg at 3am while his 8pm deadline was still ticking is, in the Trumpian universe, keeping his word (see Fox News for a full day of this bullshit).
🧠 What Actually Happened Overnight
Around 2am Eastern, US and Israeli aircraft conducted a second major strike package on Kharg Island — this time hitting oil loading infrastructure directly, not just military targets. This is the crossing of the line Trump explicitly reserved for himself back on March 13th, when he said he’d chosen “NOT to wipe out the Oil Infrastructure… for reasons of decency.” Forty days later, decency has apparently left the building.
ABC World News Tonight confirmed the strikes: explosions reported at critical loading facilities and storage areas. Iran’s government says loading operations are “disrupted.” TankerTrackers — who had previously noted that all 55 storage tanks survived the March 13th strike intact — has not yet issued an update, which is itself telling. When TankerTrackers is silent, it’s because the news isn’t good.
The Iranian Parliament member who said on March 28th that “anyone who attacks this island will not return alive” has updated his position to… no update. Presumably because the people who were supposed to not return alive apparently returned alive, which is somewhat undermining for an Iranian Parliament member.
Why Kharg and Why It Matters More This Time
For those coming in fresh: Kharg Island is a 5-mile-long strip of land in the Persian Gulf, roughly twice the size of Heathrow Airport, through which 90% of Iran’s crude oil exports pass — approximately 1.5 million barrels per day at normal capacity per Al Jazeera’s infrastructure breakdown. The island has 55 crude oil storage tanks, deep-water jetties for supertankers, and loading infrastructure built over decades. It is, in the words of the Iranian parliament, Iran’s “orphan pearl.“
The March 13th strike deliberately spared the oil infrastructure. Today’s strike did not. That distinction matters enormously:
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March 13th: Military targets hit, oil flows continue. Signal sent.
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April 7th: Oil infrastructure hit. Signal: we’re done sending signals.
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JPMorgan’s note from March 9th is now the most relevant document in finance: “Iran’s oil exports would stall and output halve if the US and Israel were to seize its port on Kharg Island, triggering further attacks from Tehran on regional oil infrastructure.” We’re not at seizure yet — but we’re at infrastructure damage, which is the step before seizure on the escalation ladder.
PBS NewsHour’s analysis noted the cruel irony: “Strikes on oil infrastructure on Kharg would severely curb Iran’s oil exports — but it would also remove even more oil from world markets at a time of soaring prices.” Congratulations — we have achieved the remarkable feat of hurting Iran financially and hurting ourselves economically simultaneously. The only winner is every energy stock in your portfolio.
Iran’s Response: Already In Progress
Iran’s retaliation playbook was telegraphed weeks ago and it’s executing on schedule:
Foreign Minister Araghchi had already stated on March 14th that Iran “will attack any energy infrastructure in the region which belongs to an American company or an American company is a shareholder“ if Kharg’s oil infrastructure was hit. Euronews confirmed that warning was issued specifically in anticipation of this moment.
Meanwhile, the IRGC announced it is “finalizing preparations to implement new operating rules in the Strait of Hormuz“ and that conditions there “will never return to its previous status, especially for the US and Israel.“ Not a temporary blockade. A permanent new regime. Khaleej Times confirmed the IRGC statement was made in direct response to Trump’s overnight strikes.
The Islamabad Accord: DOA?
Monday’s great hope — the Pakistani-brokered two-tier framework that had markets cautiously pricing in 35-40% deal probability — is looking considerably worse this morning. Here is where it stood as of midnight:
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Iran had not committed to the proposal despite “intensified outreach” — two Pakistani sources confirmed this directly to Reuters
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Iran’s position: won’t reopen Hormuz as part of a temporary ceasefire — only as part of a permanent settlement
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US position: hadn’t signed off on the 45-day ceasefire framework per the White House
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Israel’s position: continuing operations regardless
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Trump then bombed Kharg’s oil infrastructure before the 8pm deadline expired. The Khaleej Times noted Iran had explicitly said “negotiations are incompatible with ultimatums and threats to commit war crimes.” Bombing oil infrastructure while a peace framework is on the table is not, technically speaking, conducive to that framework surviving the morning.
Pakistan’s Army Chief Asim Munir, who spent all of Sunday night on the phone stitching this together, has reportedly not issued a public statement yet. Give the man a moment. He did a lot of work.
Oil at $115: What the Number Actually Means
Phil’s $115 Brent this morning is the market pricing a specific new reality:
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Saudi Ras Tanura hit = the spare capacity buffer is now a target, not a safety net
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Kharg oil infrastructure damaged = Iranian export capacity declining beyond just the blockade
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Islamabad Accord apparently dead = no diplomatic off-ramp visible before next TACO deadline
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IRGC announcing permanent new Hormuz rules = the $2M toll booth is becoming a permanent institution
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The Middle East Insider’s April scenario analysis had $120+ as the 30% probability “escalation” scenario. We just crossed into it. Their next target is $130 if Ras Tanura damage is confirmed and Saudi exports are disrupted. Andrew Lipow of Lipow Oil Associates had already projected $130 “in the coming weeks” as of March 30th. He’s looking prescient at 8am Tuesday.
The BCA Research line from March 30th deserves a reread this morning: “We are uncertain how long the impasse must continue to trigger a global recession, but we recognize that the point of no return is approaching, if it has not already been reached.”
That was a week ago. The point of no return now has a Brent price attached to it: $115 and rising.
The S&P: Phil’s 2022 Analog Just Got Uglier
Phil noted last week that the S&P went from 4,700 to 3,600 — down 23% — as gas hit $5 in 2022. We’re at 6,450 with $4 gas after 40 days. This morning we’re opening red, with Kharg oil infrastructure hit, Ras Tanura potentially struck, the Islamabad Accord in tatters, and oil at $115.
The 2022 analog’s maximum pain came when the rate of change of oil prices accelerated — not when they first spiked. We are at the acceleration phase. Yahoo Finance confirmed futures are down this morning, giving back all of yesterday’s gains. The S&P at 6,450 with $115 Brent and a damaged Ras Tanura is held up by nothing except the residual hope that TACO #5 (see yesterday’s list) arrives before the market opens fully.
The cartoon villain kept his word in the most technically accurate, substantively dishonest way possible. The market, for once, is not laughing.
😎 Well, things are NOT good this morning and this is why we are very slow to re-deploy our CASH!!! I know it’s hard to be PATIENT but that is what this market and political situation calls for.
As with all market crises – the Financial Media we depend on to give us information turns into nothing but a cheerleading squad, trying to instill FOMO in the Retail Investors so they will keep putting money in – even as the Institutional Money who funds the MSM runs screaming for the exits.
This is where the term “bagholders” comes from. “THEY” used to own the newspapers and then they began taking over television and now “THEY” own your AI too – that’s why PSW has their own AGI team – off the main grid and forming their own opinions…
Be careful out there!
