WS #6425

The dominant narrative remains the escalating US-Iran conflict, now in a fragile diplomatic phase. Iran has submitted a 14-point counter-proposal to the US via Pakistan, which Trump has rejected as unsatisfactory, though he prefers a non-military path. The Strait of Hormuz remains effectively closed, with Brent crude hitting $120 and physical barrels trading at $210-$286. OPEC+ seven countries are meeting today to raise quotas by 188,000 bpd, but this is largely symbolic while Hormuz is blocked. Ukraine has escalated attacks on Russian oil infrastructure, striking the Primorsk port and Novorossiysk, targeting oil tankers. The US has withdrawn 5,000 troops from Germany, with Trump signaling the drawdown could be 'much more than 5,000.' The narrative is ESCALATING on the diplomatic front with no clear resolution, while the economic fallout (Spirit shutdown, gas prices, inflation) is materializing. The Fed's subtle signal for rate cuts is being contested by some officials, adding to uncertainty. The US economy grew at a sluggish 1.6% in Q1, and the energy shock is delaying rate cuts. China has blocked US sanctions on five Chinese firms for trading Iranian oil, escalating trade tensions.