Trump says another operation against Iran may be coming

At a rally, Trump mentioned the possibility of conducting "another operation" against Iran.

• We may do another little Epic Fury
• We'll take care of Cuba on our way back from Iran

Markets are clearly wagering on imminent action by Trump, which has driven oil prices sharply higher over the last two days.

In a statement on Friday, the IRGC Navy claimed two supertankers hit naval mines while using what it described as an unauthorized southern route through the Strait of Hormuz, resulting in explosions and fires. The report should be treated with caution, but it is clear the current situation is unsustainable.

Trump had recently stated there would be no strikes before the midterm elections, though his credibility on that matter is questionable.

A clue that a "little Epic Fury" operation is being considered comes from rumors of strikes on missile sites, Pickaxe moutain, and infrastructure, with signs the plan may have been telegraphed. This could be a face-saving move from Trump, after which he could declare victory and potentially negotiate a deal to reopen the Strait of Hormuz.

Of course, there are two parties involved, and the outcome depends on Iran’s response. Iran has hinted at heavy retaliation but is as prone to exaggeration as Trump. Optimism lies in indications that Trump has already informed all parties, including Russia, which was reported to be evacuating today. If so, the situation could be resolved by Monday, allowing oil prices to decline.

For the moment, the market fully reflects the escalation, with WTI rising $4.21 to $103.74 and brent at its highest since May at $117.27.