This outcome is probably the best that markets can hope for. Trump has been able to hold oil prices down just by saying 39 times there would be a deal. Diplomacy with Iran is slow, technical, painful, and they tend to outfox their opposite number, but in the very short term opening the strait to traffic is what the market wants to see.

For the first time, Trump announced a deal was imminent and the Iranian state news agency didn't contradict him.

Geostrategy, not just geopolitics, is now a superpower for leaders. Iran has been able to monetize the Strait of Hormuz, strengthen its position, and get frozen assets released using its limited set of cards to its advantage. Understanding geopolitics is driving state behavior in an era of enhanced competition with knock-on effects to shipping, waterways, global trade, and supply chain rewiring.

Neither side wants full-throttle state-to-state conflict, which is good. But diplomacy not backed by force doesn't have a good track record. Iran can count on Trump not wanting to turn the dial back up on full-scale escalation between now and midterms, which encourages 'cheating'. Israel is the loser in the current outcome.

Iran has a loaded gun it can point at the global economy anytime it wants. I think Iran ends up being able to monetize the strait in some fashion. Monetizing a major global chokehold and normalizing that is one of the big outcomes here. The hardliners are in charge, domestic reform is much slimmer, and they will be a much tougher neighbor to deal with.

There was interesting language coming out of Oman about perhaps there needing to be a fee for ecological consequences.

It's safe to assume some of it will be used to fund their proxies, which are not part of this deal, and to continue to strengthen their position. They end up in a better place than before the war, holding more cards than they started with.

Iran says this is their money, the state has been run down after 47 years of sanctions.

China boosted its inventories before this conflict and has weathered the storm. The US view that it pulled a 'judo move' on China's sources of cheap energy doesn't seem to be bothering China. China has been playing this geostrategy game much longer and better, with strength in renewables and a portfolio of suppliers. China can watch and wait.