BlackMask Breaking News

The United States Central Command (CENTCOM) said on Thursday the USS Boxer was deployed to the Arabian Sea, where the vessel is taking part in the ongoing naval blockade of Iran. Earlier today, the command announced the arrival of the USS George Washington aircraft carrier to the Arabian Sea as tensions with Iran remained elevated. In a post on X, CENTCOM added that 67 commercial vessels have been directed by US forces as part of the blockade, with 3 disabled and 2 boarded to “ensure compliance.” Washington has refrained from resuming military action against Tehran so far, resorting to additional economic pressure against the Middle Eastern country.

NN: What good does it do? We all know Trump will TACO out… again. And worse yet, the great American Armada can’t do squat against an army burred deep underground. And America is unwilling to mount a invasion with boots on the ground!

United States President Donald Trump could instruct the military to launch intensive strikes on Iran if his economic measures and pressure fail to yield results, Al Arabiya reported on Thursday, citing unnamed sources. According to the report, Trump told his negotiating team that he considers the chances of reaching a near-term agreement with Iran to be very slim and ordered the suspension of talks for several weeks. Additionally, the sources said that the US administration was briefed on intelligence of Iran’s plans to resume attacks on ships and to extend operations beyond targeting vessels, as well as on reports that Yemen-based Houthis could escalate strikes in the Bab al-Mandeb Strait.

US Treasury Secretary Scott Bessent made a fresh attempt to rein-in long-term borrowing costs from multi-year highs, sending Treasury yields and the dollar down. Just two weeks after releasing its planned schedule for buybacks this quarter, the Treasury Department on Wednesday said it’s “increasing, by at least double, the size of liquidity support buyback operations” for securities dated from the 10-year to the 30-year sector. The new plan drove the US dollar to the weakest in three months. It also pushed yields on the 30-year bond lower by as much as 10 basis points to 5.18%, moving it away from its highest level since 2007. Twenty-year yields also dropped, leaving investors with tepid demand for a $16 billion auction of the securities. Elevated yield levels have kept US mortgage and other borrowing costs high, posing a headwind for economic growth and a potential problem for President Donald Trump and his fellow Republicans ahead of the November midterm elections. They’ve also driven up the Treasury’s own borrowing costs, worsening what was already a steep trajectory for government debt. “This administration needs a win, and maybe that comes in the form of artificially trying to keep long Treasury rates contained,” said Jack McIntyre, a portfolio manager at Brandywine Global Investment Management. “They have to try something. Sentiment around the long-end globally is about as bearish as I have seen in a very long time.” How long lasting the impact will prove remains to be seen. “What really gets long rates lower is a slowing economy or resolution on the Iran conflict, and I’m not sure we’re there yet,” McIntyre said. Bessent last year invoked the buyback program as part of the department’s “big toolkit we can roll out” if needed to address dislocation in the Treasuries market. He’s also repeatedly said, since taking office, that his key financial-market benchmark is 10-year yields. Last November, he said, “my job is to be the nation’s top bond salesman — and Treasury yields are a strong barometer for measuring success in this endeavor.” Officials made the announcement as long-dated government bond yields around the globe rose to significant levels this week — with the US 30-year trading at its highest since 2007.

A 10-year auction last week drew the highest financing cost at that tenor since 2007, while a 30-year sale a day later was at the greatest yield since 2001.

What Bloomberg Strategists Say…

“The buyback is a clear signal the Treasury is watching markets and is concerned about long-end yields. That sort of increase in flow cannot in and of itself turn the tide of long-end selling, though the signal may be sufficient to prompt further short-covering.”

—Cameron Crise, macro strategist. For more analysis, see MLIV.

“If yields go too far, Treasury will try and fight it — and now we know where some pain points are,” said John Briggs, head of US rates strategy at Natixis North America. The ramped-up buybacks will begin Sept. 9, the Treasury said. Two weeks ago, the department said it anticipated purchases of up to $38 billion of older securities, known as off-the-runs, for “liquidity support.” It’s tentative calendar for Sept. 9 through Nov. 4 indicated up to $14 billion total buybacks of 10-year to 30-year Treasuries. At least doubling that total would suggest an extra $14 billion or more. The US Treasury says it will be buying back more longer-dated debt, a move designed to stop the surge in long-end yields. Former St. Louis Fed President James Bullard says this seems like an important tactical move, but it won’t change the fundamentals. He speaks on “Bloomberg Surveillance.”

Oil rose to the highest in almost three weeks, as US refiners ramped up crude consumption and a spat between the United Arab Emirates and Iran heightened regional tensions. Brent futures traded near $92 a barrel after the UAE said it was cutting all economic ties with Tehran after accusing Iran of firing ballistic missiles at its territory. The latest escalation came after US President Donald Trump insisted there were no talks ongoing with Iran to end the war that has upended energy markets. “A combination of the escalation between the UAE and Iran, coupled with a market increasingly pricing a ‘closed for longer scenario,’ keeps oil and refined products supported,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management. Fresh US government data, meanwhile, indicated that refinery runs rose to their highest since September 2019, led by the Gulf Coast. That may explain why prices edged higher on the report, even as domestic crude stockpiles rose 4.4 million barrels last week. Trump Takes Hard Line as Hormuz Tensions Mark New Normal President Donald Trump insisted there were no talks ongoing with Iran, leaving control of the Strait of Hormuz in limbo. Bloomberg’s Jeff Mason shares his perspective. Further offering a floor to prices, distillate inventories fell 1.5 million barrels to the lowest in more than a month, according to the US Energy Information Administration report. Fuel prices, especially diesel, have rallied much harder than oil, as the war between Russia and Ukraine has also contributed to tighter energy markets following attacks on refineries. That’s heaping cost pressure onto drivers, truckers and farmers.

The margin for making diesel from crude oil in the US has topped $100 a barrel, setting all-time highs. In Europe, gasoil futures have more than doubled this year.

Elsewhere, three supertankers linked to China U-turned in the Strait of Hormuz, highlighting how risks remained elevated in the critical chokepoint. On Tuesday, the UK said a vessel leaving the strait was hit by a projectile, causing one casualty. Still, Persian Gulf producers have continued to covertly shuttle oil through Hormuz to reach global users, helping to contain prices that are far from the high levels many feared at the onset of the war if the turmoil dragged on into the summer. As a 60-day ceasefire between the US and Iran expired, some traders unwound long bets to avoid getting wrong-footed by a sudden de-escalation, also helping to subdue prices.

NN: Show me the freeging oil!! Show me the distillates!!!! Show me the by products!! Ill tell you what i do see. That is the biggest premium on the crack spread for diesel fuel ever!!!. That can only happen when traders realize the demand will outstrip supply.

A Ukrainian drone strike targeted an oil refinery in Ufa, the capital of the Republic of Bashkortostan in Russia, Governor Radiy Khabirov reported on Wednesday. Bashkortostan is located between the Volga River and the Ural Mountains in eastern Europe. “We have significantly strengthened our oil refining hub,” Khabirov said in his address. “The attack was small: six drones. One apparently went off course and hit a house in Zaton,” he said to reporters, adding that it injured an Indian medical student. His injuries are said to be minor, and he is receiving medical care. According to Khabirov, a unit undergoing repairs caught fire at the refinery following the attack. Firefighters are working to contain the blaze. Khabirov stated that a total of six drones were involved, with four shot down by air defenses.

NN:  Long range Drones have become so effective that war dynamics are changing.  Their has been so much damage to Russian oil infrastructure that Russia who  use to export diesel fuel and gasoline is now importing from India,

Zaye Capital Markets, asked in a market analysis released on Tuesday.  Will oil prices keep rising as Iran tensions threaten global crude supply? This was the question Naeem Aslam, CIO at Answering the question, Aslam noted that the wider oil ecosystem remains conflicted because supply risk is colliding with softer global demand expectations. “International supply estimates point to a meaningful reduction in available crude as Gulf production remains disrupted, while producer-group projections continue to show relatively modest demand growth,” he said in the analysis. “That is why oil is rising sharply on geopolitical headlines but not moving in a straight line,” he added. “Any improvement in Hormuz shipping, diplomatic progress or production recovery can quickly remove part of the geopolitical premium, while renewed disruption can push prices higher again,” he continued. Aslam went on to state in the analysis that, from Zaye Capital Markets’ perspective, “the key issue is whether the physical loss of supply remains large enough to overwhelm weaker consumption trends”. “If Gulf exports stay restricted, the market can continue supporting Brent above $90; if flows normalize, attention will quickly return to demand growth, inventories and the strength of the global economy,” he said. Aslam stated that oil can remain supported if Hormuz supply risk persists while economic data stays resilient, but highlighted that a combination of weaker labor data, softer demand, and improving Gulf shipping conditions would make the current geopolitical premium more vulnerable to reversal. In the analysis, Aslam pointed out that Brent crude was trading around $91.49 per barrel on Tuesday, adding that this was up about 0.7 percent. He also highlighted that Brent rose 2.7 percent on Monday to settle at $90.87 per barrel. “The immediate driver is not stronger global consumption but a renewed geopolitical supply premium,” Aslam said, commenting on Tuesday’s price rise.

“Progress toward reopening the Strait of Hormuz has stalled, tanker movements remain constrained, and uncertainty around U.S.-Iran relations has increased the probability investors assign to prolonged disruption of Gulf exports,” he added.

“President Trump’s warning that Oman should not interfere with U.S. policy surrounding Iranian shipping, combined with his insistence that Iran cannot obtain a nuclear weapon and his claim of U.S. control over the Strait, is reinforcing the market’s focus on physical supply risk,” he continued.

Skandinaviska Enskilda Banken AB (SEB)  In a report sent on Tuesday, Bjarne Schieldrop, Chief Commodities Analyst outlined that Brent crude was trading 0.9 percent higher at $91.7 per barrel, which he pointed out was “the highest level since 31 July”. Schieldrop projected in the report that Brent was heading towards $100 per barrel again “as it looks now”. He noted, however, that “a pattern we have seen on repeat this year is that whenever the Brent crude oil price hits $100 per barrel or so, it doesn’t take much time before [U.S. President Donald] Trump is out heralding that some good negotiations are ongoing and that there will soon be a new MoU, a ceasefire, and normalized flows of oil out of the SoH [Strait of Hormuz]”.

 HSBC analysts, including Kim Fustier, the company’s senior global oil and gas analyst, noted that “more than five months into the Middle East conflict”, oil prices remained “dominated by geopolitics and the day to day reality of transit risk through the Strait of Hormuz”. “After touching tripled digits in the second half of July, Brent briefly dipped below $80 per barrel on rising prospects of an Iran-Oman agreement, before rebounding to around $90 per barrel as a deal has proved more elusive than hoped,” the HSBC analysts stated. The analysts outlined in the research note that, in the Strait of Hormuz, traffic remained “volatile” and had “settled around 10 crossings per day, down from 30-40 per day before the re-escalation”.

“Liquids flows have averaged around four million barrels per day, well below public estimates of nine million barrels per day,” the analysts said.

“Following Houthi threats around the Bab el‑Mandeb Strait, crossings have halved and flows are being redirected via the Suez/SUMED system in Egypt, increasing freight costs (estimated at $4-5 per barrel to Asia via Egypt and around the Cape of Good Hope),” they said.

Looking at demand and balances, the analysts said China remains the biggest swing factor.

“July imports rose slightly from June lows, reflecting the lagged arrival of cargoes bought during the ceasefire; China’s crude inventories remain high at c1.20 billion barrels, only c50 million barrels below the early May peak,” they noted. “Elsewhere, Asia ex‑China and Europe have returned to pre‑crisis import levels, while U.S. inventories have risen in recent weeks on lower net exports. Tightness is more visible in products than crude,” they added.

The analysts went on to state that global inventories had fallen by more than 400 million barrels since March, “implying an average rate of drawdowns of c2.8 million barrels per day”.

“This is much smaller than initially feared, thanks to pipeline rerouting, some continuation of Gulf flows, significant demand destruction and the pre-conflict surplus from growing non-OPEC supply,” they said. “At c7.9 billion barrels, global stocks are below year-ago levels but still above 2022-24 levels, suggesting that ‘tank bottoms’ are not imminent,” they concluded.

NN: This is the temporary  reprieve. Demand for oil is the lowest this time of the year. Summer driving season is over Refineries shut down for badly need maintenance and to switch over to heating oil production. Crunch time comes in Early November. Oil  by products are the next crises like fertilizer and high distillates. It will be ugly.

Iran is considering expanding its military targets to Europe if Washington escalates the current conflict, the Financial Times reported, citing people close to the authorities. Military planners have reportedly evaluated options that include striking United States assets in southeastern European countries like Bulgaria and Cyprus, and also considered cutting subsea fiber-optic cables in the Strait of Hormuz. These heightened threats emerged as diplomatic negotiations remain at a standstill. US President Donald Trump previously instructed his negotiating team not to engage in any further discussions with Tehran until Iranian officials are ready to conclude a final deal.

NN: Iran is not so stupid as to drag Europe into the fray. So this is nothing more than Hyper blow. The Key takeaway  is the fact oil is not flowing through the straights!

The yields on United States Treasuries with a remaining maturity of 10 and 30 years were on the rise on Monday, as continued tensions in the Middle East weighed on demand for government bonds. The ceasefire agreement between the United States and Iran is set to expire today, with no official confirmation yet that it will be extended. In addition, uncertainty surrounding the agreement continued to push crude oil prices higher, raising concerns that elevated energy costs could prolong inflationary pressures in the United States and keep inflation above the Federal Reserve’s target, potentially limiting the central bank’s room to cut interest rates and driving yields on government bonds higher. The yield on the 30-year bond rose 1.4 basis points to 5.280%, reaching its highest level since 2007. The return on the 10-year Treasury note climbed 1.0 basis point to 4.706%.

NN: Fair warning> We will SOON  begin buying our beloved 30 year zero coupon bonds, principal portion. I hope to buy 4 layers 50 basis point each time higher. Starting at 5.25% hopefully  as high as 6.5%. And when the treasury is forced to bail out long bonds as the private debt and circular lending  AI bubbles in the trillions WIPE OUT  we could cash in BIG TIME!

The United States and Iran have agreed to extend the 60-day ceasefire that expires today, Al Arabiya reported on Monday, citing sources briefed on the matter, without unveiling further details. The news comes after Iranian Foreign Ministry spokesperson Esmail Baghaei claimed that the 60-day negotiations that Tehran and Washington agreed upon as a preliminary step to implementing the memorandum of understanding (MoU) never began before expiring today. Neither the US nor Iran has confirmed the news so far.

NN: How long do you tnink that bullshit will last?