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    Iran War: Trump Again Whiplashes, Threatens Sustained Bombing, Capture of Kharg Island, Then Touts Plan to Sign Not-Finalized Iran Memo; More on Oil and Metals Squeeze, Plus SpaceX, AI Tidbits

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    Iran War: Trump Again Whiplashes, Threatens Sustained Bombing, Capture of Kharg Island, Then Touts Plan to Sign Not-Finalized Iran Memo; More on Oil and Metals Squeeze, Plus SpaceX, AI Tidbits

    [The Iran war post launched yet again before complete due to competing obligations. I hope to have it finished by 8:00 AM EDT but it might take until 8:30 AM EDT. Please return or refresh this page then for the final]

    It is irritating to have to keep tabs on Trump’s epic flip-flops. But that is by design. It’s how Trump seeks to wear down opposition. So let us soldier on and not become victims of Trump’s antics. Oil traders got it right yesterday by not reacting to Trump’s latest threat to bomb Iran into submission. Perhaps they had worked out that Trump was not about to jeopardize the SpaceX IPO, set for Friday, by upsetting Mr. Market.

    The short version is that Trump loudly and rapidly, even by his standards, cycled from aggression to deal-fakery, from “We’re gonna beat the shit out of Iran if they don’t capitulate,” to “They gave in, we’ll be signing next week.” Markets rallied strongly, with investors paying scant attention to the fact that Iranian outlets and officials quickly said nothing had been agreed by the top leadership and signaling that they had not given ground on their red lines either.

    We’ll unpack that a bit more, then turn to a new Administration disgrace, that of a State Department investigation of Responsible Statecraft co-founder Trita Parsi, and look again at the looming energy and commodities crunches, plus a few Seriously Bad development on the AI front that the touts are still managing to talk past.

    First to the Trump bluster

    Iran War: Trump Again Whiplashes, Threatens Sustained Bombing, Capture of Kharg Island, Then Touts Plan to Sign Not-Finalized Iran Memo; More on Oil and Metals Squeeze, Plus SpaceX, AI Tidbits

    Wall Street Journal Trump Says U.S. Will Hit Iran Tonight, Threatens Seizure of Energy Markets

    Shortly after the post, Trump told Fox News on Thursday morning that the U.S. could make a fortune by taking Kharg Island and controlling Iranian oil sales, but that Americans probably don’t have the appetite for such a military operation and would rather see U.S. soldiers brought home…

    Now, Trump appears to be relying on a far blunter instrument: raw military pressure to compel Iran into submission. But Tehran, which remains skeptical of the terms on offer from Washington, may once again absorb the pressure rather than capitulate. If so, Trump risks becoming further entangled in a widening Middle East conflict without any guarantee that escalation will deliver a decisive outcome.

    Then his retreat:

    Notice in particular the “brought to the highest level of Iranian leadership and approved” fabrication. Tasnim immediately posted a denial in Media Claims about Finalization of Text for Iran-US Understanding False

    A British media outlet has claimed that a draft agreement between Iran and the US had been finalized.

    However, the claim is incorrect as no such text has been finalized.

    It as US President Donald Trump suggested that an agreement with Iran was within reach, a claim rejected by Iranian officials.

    Trump alleged that Iranian officials had contacted him directly and requested a halt to military strikes. He also warned that military options would remain available if Tehran refused to accept Washington’s proposed agreement.

    The Islamic Revolution Guards Corps (IRGC) has denied the claim.

    In a statement early on Thursday, the IRGC’s public relations office said the US president’s claim is “a cover to escape war.”

    Earlier, some local news agencies had also rejected the claim, citing security sources.

    The sources called the claim an “absolute lie” and said Iran will give a “crushing response” to the latest act of US military aggression against Iran.

    It is odd that Tasnim pinned the false claim on the press and not on Trump himself. Some Iranian outlets were less circumspect:

    An exclusive story in Politico said the Gulf states intervened successfully. From After Trump threatened to attack Iran, a scramble to stop him:

    Soon after President Donald Trump posted Thursday morning that he would hit Iran “VERY HARD TONIGHT,” leaders from Gulf and South Asian countries called the president in a last-ditch effort to change his mind. They assured him a preliminary agreement that paves the way for more detailed talks was, in fact, at hand.

    The calls, which have not been previously reported, came from Qatari Emir Tamim bin Hamad Al Thani, United Arab Emirates President Mohamed bin Zayed Al Nahyan and Pakistani defense chief Asim Munir, according to two administration officials and a diplomat briefed on the calls. Both were granted anonymity to discuss a sensitive diplomatic mediation…

    The message from Iran was different. Iranian state media reported that Esmaeil Baghaei, a spokesperson for the foreign ministry, said that while large parts of the negotiating text have been finalized, Iran would not compromise on its red lines, Reuters reported.

    However, the fact that Trump relented so quickly is proof of inner panic, the fears that Robert Barnes described long-form in interviews we featured this week. A fresh Janta Ka segment documents the Trump flip-flop, and instructively includes a clip of John Mearsheimer, in which the University of Chicago says that he can see signs of Trump’s desperation in how he has been carrying himself:

    Larry Johnson’s new post nevertheless describes how Trump’s increasing agita has not moved a resolution any closer. From Donald “Whiplash” Trump Tacos Again:

    The day began with Trump posting on Truth Social that the U.S. would be hitting Iran “VERY HARD TONIGHT,” threatening to seize Iran’s oil infrastructure including Kharg Island.

    Five hours later, he performed another verbal backflip worthy of an Olympic gold medal for gymnastics. Speaking in the Oval Office, Trump told reporters that the U.S. and Iran had essentially reached a settlement:

    We just made a great settlement of the war with Iran. And we’re going to be subject to finalization of documents we should get done over the next few days and probably have a signing, maybe in Europe.

    He then posted on Truth Social:

    Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening.

    He added that the naval blockade would “remain in full force and effect until this Transaction is finalized — Time and place of the signing to be announced shortly.”

    Trump also claimed the Strait of Hormuz will “officially open” the moment a deal is signed, and affirmed that the U.S. will lift its naval blockade as “part of the deal.” He indicated he would not personally attend the signing but that Vice President JD Vance and other officials would go.

    Tehran wasted no time raining on Trump’s framing of the negotiations… Iran denied any movement toward a longer-term agreement. Iranian Foreign Ministry spokesman Esmail Baghaei said reports of a finalized agreement with the United States are “speculation” and stressed that “nothing has been finalized,” adding that Iran “has not yet reached a final conclusion regarding an agreement.“

    He added that much of the draft text had already been completed but that “the Americans kept changing their positions,” while emphasizing that Iran “does not compromise on what it has defined as its red lines.” There are five red lines: remove sanctions, unfreeze frozen assets, lift the blockade, recognize Iran’s control of the Strait of Hormuz and end Israel’s attacks on Lebanon and Gaza. Iran is not going to budge on these.

    And let us not forget that Israel will wreck any deal, in the highly unlikely event that Trump folded:

    The US is continuing to spew shameless messaging:

    Keep in mind that the pattern above the negotiations have a process problem on top of the pre-existing lack of trust and yawning-chasm-between-the-two-sides impediments.

    We mentioned that the “deal is near” hype had also been coming from journalists with contacts on the negotiating team and/or relevant governments when it seemed inconceivable that either side had given enough ground for that to be remotely conceivable. Indeed, Trump seemed to be working very hard with his regular belligerent statements to lash himself to the mast of the war. And as Johnson and others have said, there is no reason to think Iran has meaningfully or even trivially changed its position.

    So as we said before, it looked as if the negotiators are pulling on levers not connected to anything. That makes sense if you consider both sides are trying to avoid a problem that I call “double brokering”. A principal never never should negotiate directly with an agent. Any commitments the principal makes will be treated as settled, while the agent can go back to his principal and the principal can try to extract more.

    Despite the negotiators trying to tell Iran to ignore what Trump says, that is simply ludicrous. When a big Iranian team came to Islamabad for talks, they saw JD Vance repeatedly having to call Trump and even speak to Netanyahu. The Iranian side was authorized to make commitments within clear parameters. The US side was not set to do the same; everything was up to Trump and Netanyahu.

    Thus the Iran team cannot afford to have anyone make solid commitments in this messaging process. It too has to mimic the shambolic US and reserve the right to withhold approval by the top level.

    And the US has also been, unbelievably, hardening its positions. We either misread or the news outlet in question was incomplete about stating the fact that the Treasury was assessing conflict damage and proposing to make payouts from Iran assets to Gulf states for reconstruction. Either the writer’s or my assumption was that Iran would be treated as a child, with its funds doled out to Gulf state concerns who would do the rebuilding subject to total expenditures that the US in its infinite wisdom deemed reasonable.

    That part may be still be true….but Treasury also intends to expropriate frozen Iranian assets for Gulf state reconstruction. From Scott Bessent on Twitter yesterday:

    The Iranian regime will lose the zero-sum game it is playing.

    Any damage it inflicts on our allies in the Gulf will be paid for with funds extracted from Iranian Accounts.

    Any tolls paid to the Persian Gulf Strait Authority will be offset by funds extracted from their accounts.

    Every attack Iran launches will only deepen the economic and financial consequences it faces.

    And it is not as if the state of play will hold through the end of the weekend:

    Next to the Administration persecution of parties it deems to be engaged in wrong-speak or overly consorting with designated US enemies, as in when Scott Ritter was barred from traveling to Russia as well as on the receiving end of an FBI raid where they seized electronic devices and important historical records.

    Now Trita Parsi of Responsible Statecraft is under threat. From Jay Solomon in The Free Press: EXCLUSIVE: Will the U.S. Deport Trita Parsi?:

    Since the United States and Israel went to war against Iran, perhaps no one in America has been quoted more often as a critic of the conflict than Trita Parsi, co-founder of the think tank Quincy Institute for Responsible Statecraft.

    From the far-left Democracy Now! and The Nation to Steve Bannon’s pro-MAGA War Room podcast to television networks CNN, MS NOW, and Al Jazeera, Parsi has said again and again that President Donald Trump faces a quagmire in Iran and that diplomatic accommodation with Tehran’s ayatollahs and generals is the only way out. Parsi’s writing in Quincy’s online magazine and his own newsletter on Substack also reports what he describes as threats to the U.S. from the Islamic Republic, often attributing them to “sources in the Iranian capital.”

    “Tehran is likely to target American data centers in the UAE,” he wrote in May, essentially warning the U.S. and Israel not to abandon the ceasefire that took effect in April by resuming attacks against Iran. “Tehran sees an opportunity to cripple the UAE’s ambitions to become a global artificial intelligence hub.”

    In the eyes of some inside the Trump administration, Parsi isn’t just another Washington pundit eager to share his point of view. The State Department has launched an investigation of Parsi and could try to deport him, according to U.S. officials and documents reviewed by The Free Press. Parsi was born in Iran, grew up in Sweden, has lived in the U.S. for over 25 years, and holds a green card.

    “The secretary has been very clear,” said a Trump administration official about Secretary of State Marco Rubio’s efforts to combat Iranian influence inside the U.S. “Anyone who seeks to undermine the U.S., we’re taking a hard look at.” That includes “people who support adversaries of ours and whose work furthers their agenda and undermines our security.”

    I find it remarkable that Parsi is framed as a critic of the war for daring to make fact-based assessments, particularly when it is more accurate to depict him as an advocate of finding a negotiated solution to the conflict. There is a vast array of commentators who are far more pointed in their criticism of this conflict (start with Daniel Davis, Douglas Macgregor, and Larry Wilkerson) and at least as high profile. But as a green card holder, he is an easy target.

    Ana Kasparian at The Young Turks saddled up quickly to lambaste this threat:

    I am told the Judge Napolitano crowd will be piling on bigly.

    And a frontal attack on a less prominent and more critical voice. From DD Geopolitics on Twitter:

    WE WILL NOT BE SILENCED!!!!

    Yesterday, our colleague and DD Geopolitics correspondent Chris was told that the US government has placed him on the FBI’s no-fly list while trying to board a flight in Beijing.

    He is an American citizen. He received no warning, no charge, and no ly when the airline refused to issue his boarding pass after eight hours of waiting, stranding him abroad. As an American, he is now barred from flying to, from, or even over his own country.

    His “offense” is journalism.

    Chris was traveling to cover Iran’s national team at the World Cup. In recent months he reported on the ground from Minab in southern Iran and from the site of the Starobelsk strike in the Donbass, where a dormitory full of teenagers was killed. His work documents the human cost of the wars Washington funds and fights: the children who never make the press releases.

    For that, an American citizen has been placed on a terrorism watchlist with no due process and no explanation.

    This is not a small thing. The no-fly list operates with almost no transparency, Americans are routinely listed without ever being told why, and the redress process is a black box that a federal court has already found violates constitutional due process. It is one of the most powerful quiet censorship tools the government holds, and it is now pointed at a journalist for reporting things they would rather no one see.

    DD Geopolitics will not be silenced. We are pursuing every legal avenue available to Chris, and we will not let this be buried.

    DD Geopolitics is a reasonably high profile account, with over 500,000 followers. An American cannot be denied entry at the border, merely harassed a bit. But the new ploy is not to let parties this extremely insecure Administration sees as a threat get to the border.

    Chris could fly to Canada and then present himself at a land border, assuming the US has not cancelled his passport, as they did with Edward Snowden when he was in transit. Regardless, this is meant to be and is punitive.

    Briefly on the economic front: in a deliciously pointed short talk, Arthur Berman debunks two of the Big Lies underlying paper oil market complacency:

    An important tweet by Nick W, who is @Hattusilis_III, summarizes an upcoming paper which manages to make sense of continuing low oil prices relative to the coming end of inventories supporting demand and the fact that it will take a long time, and may be never, before Strait of Hormuz energy transits normalize. He finds the pricing would make sense if the inventory subsidy to supply would continue, which of course it won’t. He also estimates how high prices will go when the oil cliff finally arrives. I have omitted his flow calculation table, whi you can find at the link:

    Net deficit with all measures deployed: 1-5 mb/d

    Elasticity literature
    Fed consensus short-run elasticity: –0.13.
    Recent 2001–06 estimates: –0.077 to –0.034.

    Price range consistent with current market
    At 1-5 mb/d net deficit, the calculation using consensus elasticity produces:
    $74-95.
    Current $85-100 consistent with that range.

    When the temporary offsets go, the net deficit moves to:
    7-10 mb/d crude
    + 5.9 mb/d products shortage, which has no offset and transmits directly into crude pricing

    Durable net deficit = 13-16 mb/d

    At that point, depending on elasticity used, the calculations give:
    Consensus –0.13: $136-151
    –0.077: $182-208
    –0.034: $325-387

    In a supply shock of this magnitude, the probability shifts toward the more inelastic estimates.

    The market is correctly priced if the temporary buffers were durable. It is not priced for when those temporary buffers run out.

    Another cheery economic sighting comes from the Financial Times in Iran war tightens ‘super-squeeze’ in metals markets:

    The Iran war is creating a “super-squeeze” in industrial metals such as copper and aluminium, say executives and analysts who believe persistent tight market conditions mean prices could be set to stay high for years to come.

    The price of copper is close to its all-time closing high while aluminium is at its highest level in four years….

    But unlike energy markets, where there is plentiful global supply, concerns about looming shortages existed in some of these industrial metals before the war…

    For metals, the war has increased the costs of operating a mine because of the higher price of the diesel used to run trucks and other mining equipment, and due to a jump in the price of sulphuric acid, a crucial ingredient used in some copper and nickel mines…

    In the case of copper, the market was already expected to be in deficit — where demand outstrips supply — this year, because of disruptions at major mines.

    The conflict in the Middle East has dented production further, by causing the price of sulphur — a byproduct of oil refining — to more than double.

    Disruptions in sulphur availability could remove as much as 125,000 tonnes of copper production in the Democratic Republic of Congo, according to consultancy Wood Mackenzie. A further 200,000 tonnes of production in Chile could be at risk because of sulphur disruptions, including China’s ban on exports of sulphuric acid, according to Amy Gower, analyst at Morgan Stanley…

    Goldman Sachs, which initially forecast a 60,000-tonne deficit this year outside the US market, recently revised that up to a 640,000-tonne deficit….

    Mining executives say the shortfall has been building for years and investors have often not allowed them to make the necessary investment in new copper mines…

    In aluminium, the war has had a direct impact, with the Middle East accounting for almost 10 per cent of global refined production…

    Meanwhile, high fuel prices triggered by the war have caused some countries to accelerate investments related to energy security, for instance in renewables, a move that is expected to boost demand for copper and aluminium over the medium term, according to analysts…..

    “I haven’t seen much demand destruction,” said Jean-Sébastien Pelland, executive director at Eland Cables, which makes copper cables used in offshore wind farms and oil rigs.

    High costs are passed on to end users, who are willing to pay for them, he said. “People are not going to stop buying cables for renewables energy any time soon.”

    Too briefly, on to AI, in a tiny nod to the SpaceX IPO and to make up in a small way for our neglect of this beat. But the length and extensive documentation in Ed Zitron’s posts shows how hard it is to do that well.

    No less than the Wall Street Journal published OpenAI Considers Drastic Price Cuts, Anticipating War for Users With Anthropic on Wednesday. lGary Marcus quickly described why this was a Bad Thing that he had predicted. On Thursday, Marcus published Maybe Section 230 doesn’t shield AI companies from liability, after all. Key observation:

    The new German decision that holds companies liable for their chatbots’ errors, might arguably be true as well under US liability law. Because Section 230 doesn’t exempt companies from what their own software does.

    Section 230 is, and always has been about 3rd party speech. The German courts remind us that chatbot-product speech is not that.

    More sobering sightings from Marcus:

    And to SpaceX in particular:

    Do click through:

    Plenty more where that came from…

    Francine McKenna read the SpaceX prospectus and found boatloads not to like. Some snippets from her article, Watching the SpaceX IPO:

    MarketWatch’s MW Brett Arends does a very good SpaceX “red flags” preview column. In it he mentions many of the obvious things like the fact that SpaceX loses a lot of money. He also mentions another funny strange, not funny ha ha, thing:

    In case you missed it, jumbo Wall Street bank JPMorgan had a stock analyst covering Musk’s other publicly traded company, Tesla, who was resolutely bearish. By an absolutely amazing coincidence, JPMorgan a month ago suddenly reallocated that analyst. His replacement initiated coverage of Tesla with a target price more than three times as high. And Musk cut JPMorgan in on the IPO. JPMorgan declined to comment.

    Nothing to see here, folks. Move along….

    SpaceX admits in the risk factors to its prospectus it has no idea when it will ever be profitable.

    We have a history of net losses and may not achieve profitability in the future.

    We incurred net losses of $(4,937) million and $(4,628) million for the years ended December 31, 2025 and 2023, respectively, and a net loss of $(4,276) million for the three months ended March 31, 2026. We may not achieve or, if achieved, sustain profitability in the future. As of March 31, 2026, we had an accumulated deficit of $41,311 million. While we have experienced significant growth in revenue over the last three years, we cannot predict whether we will maintain this level of growth or when we will achieve profitability again.

    Cash balances have been artificially propped up by massive borrowing.

    Why does SapceX need this IPO? Like always Elon Musk says a lot of things but the reality is often something very different. Via the Motorhead newsletter:

    When Jamie Dimon, JPMorgan’s iconic CEO, asked Elon Musk at an investor meeting last week why SpaceX is going public now, Musk smiled and replied, “We’re embarking on a massive new growth phase, and we need capital for that.”

    This isn’t exactly true. In fact, it’s as close to a lie as one can get without lying, given that the $75 billion of funds that will be raised by SpaceX’s IPO will go to pay down liabilities linked to Musk’s failed AI start-up, xAI:

    • xAI, was burning cash at a rate of over $1 billion per month last year, with minimal revenue. While segment cash flows aren’t disclosed, the EBITDA less capex in SpaceX’s AI division last year came to a $15.5 billion deficit.

    And Iran has it in its crosshairs:

    Done for today! Will see you Monday or perhaps over the weekend if Trump loses it yet again.

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