To The Moon

The U.S.-Israel coalition launched the largest and most intense airstrikes of the current war against Iran on Tuesday. The Pentagon described the operation as involving the highest number of fighter jets, bombers, and attack sorties to date. Residents in Tehran reported the overnight bombardment as the most severe wave so far, with two five-story residential buildings in the east directly hit. Rescue teams continued to recover bodies from the rubble. Iranian authorities reported dozens of casualties and damage to multiple military and civilian infrastructure sites. Despite the escalation in hostilities, global markets reacted inversely, with investors betting on a swift conflict resolution by the U.S. administration. Although oil prices closed higher on Tuesday, they plummeted over 11% intraday, marking the largest single-day percentage drop since 2022. During Wednesday's Asian trading hours, U.S. crude prices experienced a technical rebound from the previous day's sharp decline, rising to near $88.59 per barrel before stabilizing around $83.45. A political figure stated during a speech that operations against Iran are "very close to completion," having preemptively communicated via media and social platforms that the conflict would end soon. He emphasized that once objectives are met, oil prices would decline rapidly and petroleum supplies would become more secure. He claimed that most of Iran's missiles have been destroyed and a significant risk has been neutralized, but operations will continue until Iran's threatening capabilities are durably diminished. Analysts described this as a classic strategy of verbal intervention and political reassurance aimed at alleviating domestic pressure from high oil prices, inflation, and anti-war sentiment, while stabilizing economic expectations. Iran's Islamic Revolutionary Guard Corps threatened to blockade Gulf oil exports unless U.S.-Israel attacks cease. Iranian diplomats and senior officials issued firm statements, indicating no pursuit of a ceasefire and a low probability of resumed negotiations. Following the appointment of a new supreme leader, Iran rejected demands for external influence over its leadership selection, asserting the matter as an internal affair. The Revolutionary Guard Corps stated that the war's conclusion would be determined by Tehran, not Washington. A senior Israeli official stated that the country does not seek endless war and will coordinate with the U.S. on ending hostilities. Sources familiar with military plans indicated Israel aims to inflict maximum damage before a potential closing window for further strikes, operating under the assumption that the U.S. may terminate the conflict abruptly. The U.S. Congress is expected to receive a request for additional war funding shortly, though there is internal skepticism within the governing party regarding the costs of a prolonged engagement. Short-term market sentiment is predominantly optimistic, driven by the intraday oil price crash, cooling inflation expectations, and a rebound in risk assets. Investors are betting on the narrative of a swift conclusion and potential strategic petroleum reserve releases by major economies to mitigate energy shocks. However, worst-case scenarios persist. If Iranian retaliation escalates, the Strait of Hormuz faces prolonged disruption, or proxy attacks expand, oil prices could easily return to triple digits, fueling uncontrollable inflation and heightened stagflation risks. The U.S. administration must balance battlefield progress against domestic pressures. Key variables in the coming days will include Iran's response, outcomes from major economies' energy minister meetings, and navigation signals from the Strait of Hormuz. Investors are advised to monitor the actual impact of verbal interventions, developments in strategic reserve releases, and on-the-ground military dynamics, as geopolitical uncertainties and potential Iranian reactions remain significant reversal risks for oil prices, inflation trajectories, and central bank policy paths.