【Trump Performs "Art of the Buck Pass": Where Will the Middle East Situation Head?】

US President Trump has claimed to be considering a gradual reduction in large-scale military operations against Iran in the Middle East, stating that the objective is nearly achieved. Notably, this announcement was released after market close. Over the past three weeks, each time he has escalated the situation immediately after market close. This time, however, he seems to be de-escalating, or at least hinting that he might withdraw. The strategy he's implying here is something many have speculated about—that he will simply declare "mission accomplished" and leave the mess for others to clean up.

He stated that the strait "needs to be guarded and patrolled by other nations that use the strait," which excludes US involvement. He did indicate that the US would provide assistance if requested, but I believe this would come at a steep price. Additionally, he said this morning that ensuring strait security would be easy for America, but now he's changed his tune to say "it will be easy for them."

Setting politics aside, this significantly reduces the likelihood of a US ground invasion or protracted warfare. It sounds like Trump intends to abandon action and allow the Iranian regime to remain in place. Now we can only wait and see how Iran and Gulf states will respond. I have a hunch that Iran will demand these nations close US military bases.

In any case, Europe, Japan, Canada, and Bahrain have issued statements expressing willingness to work together to ensure safe passage through the Strait of Hormuz.

(The above views are for reference only and do not constitute investment advice)