President Trump described the ceasefire with Iran as on 'massive life support' after rejecting their counteroffer as 'garbage'. He met with top military advisors to discuss potential military options. Energy Secretary Wright said if no negotiated settlement is possible, they will return to military methods to open the Strait.

The president is jumping to conclusions many reached last week. Iran is confident because its response to Trump's outreach was almost identical to previous demands, showing they see their nuclear program and control of the Strait as leverage that doesn't align with US interests.

The question is whether the US can extract enough leverage to move the needle, or if external forces like China will be needed. President Trump has a rescheduled meeting with Xi Jinping in Beijing this week, originally delayed from March with the hope the war would be wrapped up.

President Xi is deeply concerned about regional instability and loss of oil flow to China, but it's highly unlikely we see new outcomes or deliverables on the conflict. Xi has taken a backseat approach, supporting Pakistan as mediator but not stepping in directly.

Morgan Stanley describes the effort to reopen the Strait as a race against time. Base case: Brent at $110/barrel this quarter, $100 next quarter, $90 Q4. Bull case: $130-150/barrel in case of longer closure. Based on everything we're hearing, we're getting a longer closure.

Everything points to a longer closure. Even a prolonged stalemate or ceasefire in name only will continue to have deep impacts on the oil market due to lack of trust that ships can freely move. The supply shortage is real and countries only have so much stockpiled before it impacts consumers at the pump.