Iran cancels flights amid new US sanctions; Saudis intercept Houthi missiles

Iranian flights have been canceled following the imposition of new U.S. sanctions, while Saudi Arabia reported intercepting six missiles fired by the Houthi movement. The sanctions, part of “Operation Economic Outcast,” target Iran’s aviation sector, intensifying economic pressures on the country. Meanwhile, the missile interceptions highlight the ongoing conflict between Saudi Arabia and the Iran-aligned Houthi movement in Yemen, indicating continued regional instability. These developments coincide with heightened tensions and may impact the likelihood of Iran closing its airspace entirely. Key Takeaways Market behavior suggests the recent flight cancellations and missile interceptions are consistent with increased odds of a full airspace closure in Iran. Participants appear to have reduced the likelihood of a near-term closure by September 30, with pricing stable at 3.4% YES. Longer-term odds for a December 31 closure are priced at 22% YES, indicating a potential shift in market sentiment over the coming months. What to Watch Observers will be closely monitoring any official statements from the Civil Aviation Organization of Iran or major news outlets like Reuters or AP for indi...