Trump warns Iran, Oman amid Strait of Hormuz tensions

President Donald Trump has called on Iran to “put up the white flag of surrender,” following the expiration of a Memorandum of Understanding deadline. Trump also issued a warning to Oman, stating it would be targeted if it obstructs the reopening of the Strait of Hormuz. This development comes amidst escalating tensions in the region, as Iran has resumed attacks on ships, and the United States maintains a naval blockade. The Strait of Hormuz is a critical maritime passage, and the involvement of Oman, a non-combatant mediator, suggests a widening of the conflict. The prediction markets have responded to these developments with a notable decrease in the probability of a US-Iran agreement to restore normal traffic through the Strait of Hormuz by the end of August. The market pricing now suggests only a 10.5% chance of such an agreement, down from 12% a day ago and 25% a week ago. This reflects an increase in perceived risk and a further deterioration of diplomatic channels, as indicated by Trump’s ultimatum. The market for extending the US-Iran 60-day negotiation period has also seen a decrease in confidence, with current pricing indicating a mere 3.5% likelihood of an extension. The...