Trump yesterday hinted that France would ultimately get involved in a Hormuz operation and now we’re seeing signs that’s true, though with some strange caveats:

• Once strikes have stopped, we are read to take the responsibility of an escort system in Hormuz
• Any role in Hormuz would be only if there is an end to hostilities
• Any such Hormuz mission would need Iranian coordination

This is a tough position to make sense of as it implies Iran would be involved rather than fighting it. Perhaps that makes sense if Iran splinters and a central government seeks peace while commanders near Hormuz continue to wage war? Or maybe it’s Macron trying to walk a fine line where he doesn’t really want to get involved while not directly rebuking Trump.

Oil is higher today with WTI up $1.76 to $94.23 on the May contract. The news overnight was that Iran struck oil infrastructure targets in the UAE along with another taker near Oman.

I think it’s worth a look at the monthly oil chart as it shows the spike falling short of the covid highs and now retracing somewhat. That’s a somewhat optimistic view but it’s worth highlighting that we’re only halfway though March and that candle could look much different on March 30, depending on what happens in Hormuz.

Also notable today is that US stock market are higher despite higher oil prices. That’s a break in the recent correlation and suggests some optimism around the flows of oil. There is a sense that Iran doesn’t want to alienate the whole world so it’s allowing the shipping of oil for countries that are not Israel, the US or ‘allies’. That last one is tough to pin down but it’s a system that could ultimately allow enough oil through to keep prices where they are in the next month or two.