#iran

With no end in sight to the war in Iran and oil prices stuck above $100 a barrel, bond traders worried about inflation have sold off long-term government debt in the U.S. and developed economies in recent days. That has the effect of raising bond yields, including on the benchmark 10-year Treasury note , which rose nearly 24 basis points in the past week to end Friday near 4.6%. 

The 10-year Treasury yield influences the cost of mortgages, auto loans, credit card rates and other consumer debt. When it goes up, consumers feel the pinch. Its rate is set by the market, not the Federal Reserve.

If we’re going to live in a world in which fiscal deficits continue to increase indefinitely, there’s really not any political will to do something about that, and you have, at least in the U.S., a central bank that’s, let’s just say, uniquely hesitant to hike, then it just stands to reason that the yield curve is going to steepen. Long-term yields will continue to increase, because buyers need more compensation against the fiscal risk and the inflation risk that they’re absorbing now.

Savvy investors will understand this is a multi-stage process, and the U.S. government will also get to decide how to react to a sharp and sustained spike in long-end yields.

If this continues, and let’s say Treasury yields [on the 10-year note] march to 5% or above, it won’t be long before the Treasury secretary says, “Listen, I have a toolkit as well, and I’m not afraid to use it.” The Treasury secretary can shorten the weighted average maturity of our debt issuance, make more aggressive use of the buyback tool, and potentially jawbone the market with the Fed and say we may have to engage in purchases of long-end bonds to align them with long-term fundamentals.

In other words, that is financial repression [when the government artificially holds interest rates down, making debt more manageable at the cost of harming savers, among other risks].

I think that’s the end game for the bond market, because 5%-plus bond yields are not sustainable for a variety of reasons.

According to US media reports, Washington sent Iran a 14-point document earlier this week. Under its proposals, Iran would be required to agree not to develop a nuclear weapon and halt all enrichment of uranium for at least 12 years. It would also be required to hand over an estimated 440kg (970lb) stock of uranium, which it has enriched to 60 percent.

In return, the US would gradually lift sanctions and release billions of dollars in frozen Iranian assets and withdraw its naval blockade of Iranian ports.

Both sides, which are currently engaged in a naval standoff in the Strait of Hormuz, would reopen the critical waterway within 30 days of signing.

Iran has been subject to crippling US sanctions for decades. The lifting of some of these under a 2015 nuclear agreement drawn up with the former Obama administration, five other countries and the European Union, was reversed when Trump unilaterally walked out of the deal in 2018, during his first term as US president.

Iran is believed to have about 440kg (970lb) of uranium enriched to 60 percent. A 90-percent threshold of enriched uranium is needed to produce a nuclear weapon. Under the Obama-era Joint Comprehensive Plan of Action signed with several other states, Iran had been permitted to enrich uranium to 3.67 percent – enough to develop a nuclear power programme. Now, the US is demanding that it be reduced to 0 percent.

“From the US positions, it appears that Iran would need to compromise significantly, but they have not demonstrated any appetite to make big concessions, likely because they don’t trust the Trump administration to keep to their commitments,” he added.

Oil demand is expected to contract by 80 kb/d this year, as the Iran war upends our global outlook. This is 730 kb/d less than in last month’s Report and a forecast 1.5 mb/d 2Q26 decline would be the sharpest since Covid-19 slashed fuel consumption. Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific, mainly for naphtha, LPG and jet fuel. However, demand destruction will spread as scarcity and higher prices persist.

Global oil supply plummeted by 10.1 mb/d to 97 mb/d in March, with continued attacks on energy infrastructure in the Middle East and ongoing restrictions to tanker movements through the Strait of Hormuz leading to the largest disruption in history. OPEC+ production fell 9.4 mb/d m-o-m to 42.4 mb/d while non-OPEC+ supply declined 770 kb/d m-o-m to 54.7 mb/d, as lower Qatari output offset gains in Brazil and the United States.

Global observed oil inventories fell by 85 mb in March, with stocks outside of the Middle East Gulf drawn down by a significant 205 mb (-6.6 mb/d) as flows through the Strait of Hormuz were choked off. At the same time, with limited outlets after the effective closure of the Strait, floating storage of crude and oil products in the Middle East rose by 100 mb and onshore crude stocks in the region were up by 20 mb. China added 40 mb of crude to tanks.

However, at the time of writing, it remains unclear whether the ceasefire will turn into a lasting peace and a return to regular shipping flows through the Strait of Hormuz. With oil-importing nations scrambling to source replacement barrels from an increasingly shrinking pool of supply, physical crude oil prices surged to record levels near $150/bbl, far above the prices in futures markets, with the physical-futures disconnect becoming increasingly acute. Even steeper gains have been seen for refined products, with middle distillate prices in Singapore reaching all-time highs above $290/bbl.

Resuming flows through the Strait of Hormuz remains the single most important variable in easing the pressure on energy supplies, prices and the global economy.

In early April, shipments through the Strait remained severely restricted, with loadings of crude, natural gas liquids and refined products averaging around 3.8 mb/d, compared with more than 20 mb/d in February ahead of the crisis. Exports through alternative routes – most notably from the west coast of Saudi Arabia and Fujairah on the east coast of the UAE, as well as the ITP pipeline that runs from Iraq to Ceyhan in Türkiye – had increased to 7.2 mb/d from less than 4 mb/d before the war. The overall loss in oil exports exceeds 13 mb/d, with associated production curtailment and damage to energy infrastructure in the region resulting in cumulative supply losses of more than 360 mb in March and 440 mb projected for April.

Overall, global oil demand is estimated to contract by 800 kb/d year-on-year in March and by 2.3 mb/d in April. Global oil demand is now projected to decline by 80 kb/d on average in 2026, compared to growth of 730 kb/d expected in last month’s Report.

Trump also claimed to have rejected an offer from Iran to reopen the strait three days ago, saying that "it will open when we make a deal".

Iranian President Masoud Pezeshkian placed the blame on Trump for upending talks — saying the U.S. blockade of Iranian ports, the president’s threats of violence against the country and his “breach of commitments” made negotiations untenable.  “World sees your endless hypocritical rhetoric and contradiction between claims and actions,” Pezeshkian wrote on the social platform X.

Vatanka pointed out that the nuclear deal negotiated under the Obama administration took well more than a year to be ironed out. “It’s going to take many months this time, too, but you need to have the ceasefire in place,” he said. “You need to have the Strait of Hormuz open, you need to build trust.” Morgan Viña, who served at the United Nations in Trump’s first term, said the Iranians have a greater ability to withstand pressure than Trump, given his promises to avoid forever wars and his party facing the midterm elections amid high gas prices.  “It is to their advantage to make this as long and as painful,” she said on the “Fault Lines” podcast on Wednesday. “But President Trump being too willing, too eager, to find an agreement here, I think that is to our detriment when it comes to finding a long-term solution.”

And Treasury Secretary Scott Bessent said the administration was pressured into issuing another 30-day sanctions waiver to allow Russian oil on the market at the request of “more than 10 of the most vulnerable and poorest countries in terms of energy,” during a Senate Appropriations Committee hearing.  Bessent was criticized by Sen. Chris Coons (D-Del.) for padding Russian President Vladimir Putin’s pocket with another $4.5 billion to fund his war in Ukraine.

Israel is not a normal democracy that abides by the rule of law or legal restraint. It is very much an expansionist state with bold ambitions and a demonstrated willingness to break international law. The events of the past two years have made this reality impossible to ignore.

The “Greater Israel” project, a term that has carried two primary meanings over the decades, has moved from the ideological fringe into the governing coalition of Israeli politics. In its narrower, post-1967 usage, “Greater Israel” referred to Israeli sovereignty over the West Bank, Gaza Strip, and Golan Heights. In its maximalist, biblicist form, drawn from Genesis 15:18, it invokes the territory stretching “from the river of Egypt unto the great river, the river Euphrates,” a vast area encompassing parts of modern Jordan, Syria, Lebanon, and potentially reaching into Iraq.

Once confined to religious nationalists and settler ideologues, this expansionist vision now sits at the cabinet table. Finance Minister Bezalel Smotrich has called for Israel to “expand to Damascus,” displayed a map showing Jordan as part of Israel at a 2023 speech in Paris

Netanyahu’s coalition agreement explicitly declares that “Jewish people have an exclusive and indisputable right to all parts of the Land of Israel” and that “the government will promote and develop settlements in all parts of the Land of Israel.”

Perhaps most striking is that this rhetoric is no longer confined to the religious right. Opposition leader Yair Lapid, an ostensibly secular figure, stated in February 2026 that he supports “anything that will allow the Jews a large, broad, strong land,” adding that “the borders are the borders of the Bible.” When even centrist politicians invoke biblical mandates to justify territorial expansion, the ideological transformation becomes undeniable.

Smotrich has repeatedly asserted that the military campaign in Lebanon must result in a “change of Israel’s borders.” On March 23, 2026, he told an Israeli radio program that the campaign “needs to end with a different reality entirely, both with the Hezbollah decision but also with the change of Israel’s borders.” He then declared at a Knesset faction meeting that “the Litani must be our new border with the state of Lebanon, just like the Yellow Line in Gaza and like the buffer zone and peak of the Hermon in Syria,” adding, “I say here definitively, in every room and in every discussion, too.”

Defense Minister Israel Katz has adopted a complementary posture. He announced at the end of March that the IDF will maintain “security control over the entire area up to the Litani River” and that “hundreds of thousands of residents of southern Lebanon who evacuated northward will not return south of the Litani River until security for the residents of the north is ensured.”

Similar to IDF's current Gaza model, the defense establishment intends to destroy villages near the Israel-Lebanon border, and establish permanent military outposts in the area between the border and the Litani River

The defense establishment's perception is that all of these villages are used by Hezbollah for activities against Israel, and therefore they must be completely destroyed to prevent Hezbollah operatives from returning to the area.

Defense Minister Israel Katz said on Tuesday that all houses in Lebanese villages near the Israeli border will be demolished "like in Rafah and Beit Hanoun," referring to areas in the Gaza Strip where the IDF carried out widespread demolitions of homes during the war.

more than 600,000 Lebanese residents who have been evacuated will not be allowed to return to south Lebanon "until the security and safety of northern residents are guaranteed." The defense minister said that following the IDF's operation in Lebanon, Israeli troops will continue to be stationed in a "security zone" inside Lebanese territory to defend against anti-tank missiles and to maintain security control of the area south of the Litani River.

Italian ‌Prime Minister Giorgia ‌Meloni said on Tuesday that her government has halted the automatic renewal of a military Memorandum of Understanding (MoU) with Israel, as Italy has become increasingly critical of Israel’s wars and killing of civilians.

According to Haaretz, the MoU includes the exchange of military equipment and cooperation on military research, though an Italian source told the Israeli newspaper that Meloni’s announcement reflected a policy already in place.

The source said that Italy halted military cooperation with Israel shortly after October 7, 2023, though according to reports from last year, Italy suspended weapons exports to Israel but was still fulfilling previous arms deals. Meloni has been under significant pressure from her opposition and from Italian citizens to cut ties with Israel. Italian Foreign Minister Antonio Tajani visited Lebanon on Monday, where he slammed Israel’s “unacceptable attacks by Israel against the civilian population” and said it called for the avoidance of “another escalation like the one in Gaza.” When asked if Italy would take a similar step toward the US, the source speaking to Haaretz said that Italy was still assessing the impact on Iranian civilians in the US bombing campaign in Iran, which started with the bombing of an elementary school, which slaughtered more than 100 children.

The US wants a clear and enforceable commitment that Iran will not develop nuclear weapons – or even the capability to do so quickly.

Washington and Tehran signed a nuclear deal in 2015 under US President Barack Obama. The agreement put a limit on Iran’s uranium enrichment of 3.67 percent in return for sanctions relief. But Trump, who succeeded Obama, withdrew Washington from the deal three years later and slapped sanctions back on Iran. Since then, Iran has accelerated its uranium enrichment to 60 percent. To make an atomic bomb, 90 percent enrichment is required.

During Israel’s 12-day war on Iran in June, the US carried out air strikes on Iran’s three main nuclear sites, after which Trump claimed that Iran’s nuclear programme had been obliterated. But eight months later, he started a war against Iran by saying one of his main goals was to keep Iran from obtaining a nuclear weapon.

The war was launched while talks mediated by Oman were under way between Iran and the US. Oman had said a short time before the attacks began that a deal was “within reach”.

Iran is pushing for a broader regional ceasefire, including an end to fighting involving its allies, such as Hezbollah in Lebanon.

While Israeli Prime Minister Benjamin Netanyahu has expressed support for Washington’s decision to suspend the strikes on Iran, he said the ceasefire will not extend to Israel’s ongoing military operations in Lebanon.

Hours into the ceasefire, which began on Wednesday, Israel carried out dozens of attacks across Lebanon, killing more than 300 people in one day.

However, Tehran insisted the ceasefire included Lebanon, citing Pakistani Prime Minister Shehbaz Sharif’s ceasefire announcement on X, which unequivocally stated this was the case.

“Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” posted President Donald Trump on Easter Sunday. In case one thought that was an impulsive utterance, it’s notable that the president in apparently prepared remarks a few days earlier said, “If there is no deal, we are going to hit each and every one of their electric generating plants very hard and probably simultaneously.”

Such rhetorical statements – if followed through – would amount to the most serious war crimes – and thus the president’s statements place servicemembers in a profoundly challenging situation.

Iranian power plants and other critical civilian infrastructure are protected from attacks by the law of war the United States helped craft after World War II. Such an object can lose its protection only if it is used for military purposes by the enemy and its destruction “offers a definite military advantage.” Even then, such an object can be attacked only if, after a case-by-case rigorous analysis, the “concrete and direct military advantage anticipated” outweighs the civilian suffering that is expected to result. (Geneva Convention Additional Protocol I art. 52, art. 57; DOD Law of War Manual, § 5.6, § 5.12).

Despite those well-settled legal parameters, President Trump has repeatedly threatened to obliterate such infrastructure without regard to the law’s high demands. His comments are blatant expressions that he is willing to turn the United States into a rogue State like Iran and Russia, one that rejects the fundamental legal restraints that protect innocent non-combatants like children, and the Iranian civilian population itself.

U.S. military commanders have sworn to obey the Constitution and only those orders from their superiors that are lawful.  Threats to bomb Iran “back to the Stone Ages” and to show “no quarter, no mercy” are plainly illegal.  Trump’s outrageous statements gravely threaten our military professionals’ bedrock moral and legal principles, ones enshrined in the law of war that they’ve been trained to follow their entire careers.

the DOD Law of War Manual’s note on targeting civilian infrastructure states: “Diminishing the morale of the civilian population and their support for the war effort does not provide a definite military advantage. However, attacks that are otherwise lawful are not rendered unlawful if they happen to result in diminished civilian morale.”  DOD Law of War Manual, § 5.6.  Such “morale bombing” has been rejected for many decades; it had gained support during World War II only to be roundly rejected by Additional Protocol I to the Geneva Conventions and customary international law.  The idea of using civilian pain in order to effectuate political goals would rightly stoke criticisms that the United States’s use of military force against civilian targets equates to acts of sheer terrorism. (See Additional Protocol I art. 51(2) (“Acts or threats of violence the primary purpose of which is to spread terror among the civilian population are prohibited.”) (emphasis added); DOD Law of War Manual, § 5.2.2 (“Measures of intimidation or terrorism against the civilian population are prohibited, including acts or threats of violence, the primary purpose of which is to spread terror among the civilian population.”) (emphasis added).

The Pew survey released on Tuesday reported that overall, 60% said they have an unfavorable view of Israel. In 2022, only 42% of Americans held negative views of Israel.  There was a sharp divide between Democrats and Republicans. 41% of Republicans have an unfavorable view of Israel; that number is double with Democrats. There was also a large split between younger and older Americans. 70% of Americans under 50 had an unfavorable view of Israel, including 57% of Republicans.

On Tuesday, Trump announced a new ceasefire with Iran. Within hours, Israel violated the ceasefire with a massive round of strikes on Lebanon.

US officials were aware that a statement from Pakistan Prime Minister Shehbaz Sharif on the US-Iran ceasefire that was issued on Tuesday included a truce in Lebanon as part of the deal, according to media reports. The New York Times reported that the US had already seen and signed off on Sharif’s statement before he posted it

A diplomatic source familiar with the negotiations leading up to the ceasefire announcement told ITV News that Iranian and Pakistani officials ended the talks with the understanding that the US was aware that the truce also applied to Lebanon, contradicting claims from Trump and Vice President JD Vance that it did not.

Israel not only continued its attacks on Lebanon, but it also dramatically escalated the bombardment, launching a new military operation dubbed “Operation Eternal Darkness” and killing hundreds of people across the country. According to NBC News, Trump asked Israeli Prime Minister Benjamin Netanyahu to scale down the attack, but heavy Israeli strikes continued on Thursday.

Iranian Foreign Minister Abbas Araghchi affirmed in a statement on Wednesday that the ceasefire must include Lebanon or the deal will be off. “The Iran-US Ceasefire terms are clear and explicit: the US must choose—ceasefire or continued war via Israel. It cannot have both,” Araghchi wrote on X. “The world sees the massacres in Lebanon. The ball is in the US court, and the world is watching whether it will act on its commitments.”

The two-week pause in the fighting was announced by Pakistan's Prime Minister Shehbaz Sharif - who has been serving as mediator between the warring parties. Sharif said the US and its allies "have agreed to an immediate ceasefire everywhere including Lebanon and elsewhere".

The guns were supposed to have fallen silent. It was, after all, just hours after US President Donald Trump had announced that a two-week ceasefire had been agreed to halt the war in the Middle East. But just as the region was breathing a sigh of relief, Israeli jets conducted a 10-minute blitz across Lebanon - a massive aerial attack that killed at least 303 people and wounded 1,150 others, according to Lebanon's health ministry. Local and Western condemnation was swift and widespread, but no criticism came from the US against its ally in this war. Iran said this was "a blatant violation" of the ceasefire deal and has asked the US to halt the Israeli "aggression".

In Lebanon, opponents and supporters of Hezbollah are coming together in anger, united in the view that what happened here was unacceptable and unjustifiable.

This last bit may be Israel’s goal:

Iran's President Masoud Pezeshkian denounced the "blatant violations" by Israel, which, he added may render negotiations "meaningless".

Israel’s Channel 12 cites a security official as saying that the Iranians demanded extending the ceasefire to Lebanon, where Israel has been invading the south of the country.

US President Donald Trump says he has agreed to a two-week ceasefire with Iran, paving the way for a temporary cessation of US-Israeli strikes in exchange for the reopening of the Strait of Hormuz. Iran’s Foreign Minister Abbas Araghchi says Tehran has also accepted the truce, adding that safe passage through the Strait of Hormuz during the two-week period would be possible in coordination with Iranian armed forces. Pakistan’s Prime Minister Shehbaz Sharif, who mediated the ceasefire deal, says the agreement between Iran and the US, along with their allies, also includes “Lebanon and elsewhere” and is effective immediately. He also confirmed that talks between Iran and the US will begin in Pakistan’s capital, Islamabad. Dozens of Democratic lawmakers condemn Trump’s threatening rhetoric towards Iran, calling for his removal from office despite the announcement of the ceasefire deal. The US oil benchmark plunged more than 17 percent after the ceasefire announcement while major stock markets in Japan and South Korea opened strongly.

Every US presidential administration since President Nixon has maintained an understanding with Israel under which the US and Israel do not acknowledge Israel’s nuclear weapons program, and the US doesn’t pressure Israel to sign the Non-Proliferation Treaty. The ambiguity has allowed the US presidents to provide military assistance without worrying about the 1976 Symington Amendment, a foreign assistance law that prohibits aid to countries that traffic in or receive nuclear enrichment equipment or technology outside of international safeguards.

Israel’s nuclear arsenal, which is estimated to be somewhere between 70 and 400 nuclear warheads, is almost always missing from the conversation in US media coverage and political discussions surrounding Iran’s nuclear program, which has never been used to develop weapons. Unlike Israel, Iran is a signatory of the NPT, and Ayatollah Ali Khamenei, the Iranian supreme leader killed by an Israeli strike on February 28, had maintained a Fatwa banning the development of nuclear weapons.

According to Israel's Channel 12, Iran must fulfil a number of demands for the war to end.

The proposals request that Iran must "commit never to pursue nuclear weapons", pledge to dismantle nuclear facilities and to hand over the enriched amounts of uranium it possesses to the International Atomic Energy Agency (IAEA), the UN nuclear watchdog, which is to monitor the issue going forward. According to the proposals, Iran would agree that its missile programme be limited in range and quantity. Additionally, Iran would stop funding regional proxies - Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. Iran would also be required to reopen the Strait of Hormuz so it could function as a "free maritime corridor". Closure of the strait - through which a fifth of the world's oil and gas supplies pass - has sent prices spiking and led to fears of recession in the world economy. All international sanctions would be lifted on Iran, the plan says. Full sanctions were reimposed last November after Iran suspended inspections of its nuclear facilities in the wake of Israeli and US bombing of several of its nuclear sites and military bases.

According to Press TV, Iran has listed five conditions to end the war. They include a complete halt to "aggression and assassinations by the enemy". Other Iranian conditions include "concrete mechanisms to ensure that the war is not reimposed on the Islamic Republic", though it is unclear what guarantees could be provided and which countries would take part - or monitor their observation. On the economic front, Iran is also demanding the payment of war damages and reparations, as well as the right to remain solely in charge of the Strait of Hormuz.

“The mullahs are desperate and scrambling,” he said at a recent Pentagon press briefing, referring to Iran’s Shiite Muslim clerics. He later recited Psalm 144, a passage of Scripture that Jews and Christians share: “Blessed be the Lord, my rock, who trains my hands for war and my fingers for battle.”

Hegseth has a history of defending the Crusades, the brutal medieval wars that pitted Christians against Muslims. In his 2020 book “American Crusade,” he wrote that those who enjoy Western civilization should “thank a crusader.” Two of his tattoos draw from crusader imagery: the Jerusalem Cross and the phrase “Deus Vult,” or “God wills it,” which Hegseth has called “the rallying cry of Christian knights as they marched to Jerusalem.”

Matthew D. Taylor, a visiting scholar at Georgetown who studies religious extremism and has been a frequent Hegseth critic, said, “The U.S. voluntarily going to war against a Muslim country with the military under the leadership of Pete Hegseth is exactly the kind of scenario that people like me were warning about before the election and throughout his appointment process.”

Taylor said Hegseth’s rhetoric and leadership “can only inflame and reinforce the fears and deep animosity that the regime in Iran has towards the U.S.”

Hegseth’s church network, the CREC, preaches a patriarchal form of Christianity, where women cannot serve in leadership, and pastors argue that homosexuality should be criminalized. Hegseth last year reposted a video in which a CREC pastor opposed women’s right to vote. Wilson, its most prominent leader, identifies as a Christian nationalist and preached at the Pentagon in February at Hegseth’s invitation.

Both Wilson and Hegseth have questioned Muslim immigration to the United States. Wilson argues the country should restrict Muslim immigration in order to remain predominantly Christian. In “American Crusade,” Hegseth lamented growing Muslim birth rates and that Muhammad was a popular boys’ name in the U.S.

As head of the armed forces, Hegseth has overseen changes that are in line with his conservative Christian worldview, including banning transgender troops, curtailing diversity initiatives and reviewing women in combat roles.