Analyst sees a chance for Trump to retreat in the impasse with Iran until the election in Israel, but oil remains above US$100

The presenter of the Meet Kevin channel assesses that the most likely window for American President Donald Trump to retreat from the confrontation with Iran ends with the election in Israel, with the count scheduled for Tuesday. According to him, the chance of an agreement before the vote is 95% if the retreat occurs by then, and drops to 70% if this does not happen.

In the presenter's assessment, after the election, the motivation on both sides to close an agreement tends to zero. The biggest incentive, he says, would be precisely on the eve of the vote: Iran could claim the minimum political gain for Trump, and the American president could still declare victory before the election. The presenter also mentions that there are those who believe that the likelihood of war would be lower if Israeli Prime Minister Benjamin Netanyahu does not win.

Signals from Tehran don't sound like war

According to Meet Kevin, Iran's behavior does not indicate escalation. The Iranian capital hosts a security meeting with officials from Türkiye, Pakistan and Saudi Arabia, with other countries expected. The meeting, the presenter notes, takes place shortly after Trump said there would be no attack. On Tuesday, the Iranian president travels to Moscow, and the channel's reading is that Tehran is seeking to know whether it will have support if the United States violates a possible agreement. "That's not the sound of a war starting", summarizes the presenter.

The channel also highlights images released by Al Jazeera of a tanker leaking oil in the Strait of Hormuz.

What has changed since February

The presenter compares the current scenario with that of February. That month the Strait of Hormuz was open; today it is affected, although there are alternatives. There was no blockade either, and now there is an economic blockade. The oil risk premium, which was around US$6, is close to US$60, which means that a barrel is trading above US$100. The dispute between the Saudis and Houthis, which was not a problem in February, has become so.

On the Iranian side, according to him, oil sales, which were flowing before the war, are close to zero, perhaps 10% of the previous level. The currency continues to fall: around 2.6 million riyals are needed to buy US$1, compared to around 500,000 two years ago, a loss of purchasing power of approximately five times. Unemployment has risen and Iran's GDP is contracting by 7% to 12%, depending on the metric, according to the presenter.

Less pressure on Washington

For the market, the central point of the analysis is that Trump faces less pressure to close a deal than in the six-week period of economic pain between March and early April. According to Meet Kevin, if GDP growth and the American stock market continue to rise, the White House will have little incentive to give in. There are still alternatives to the Strait of Hormuz in operation, and talks focus on the duration of a possible nuclear agreement and the acceptable level of uranium enrichment.

The presenter shows a graph indicating that, in the price of oil, the portion attributed to supply problems has grown in the last approximately five weeks, while demand has retreated a little. According to him, there is an expectation of a recovery in demand in China.

For investors, the message is that oil above US$100 remains the main channel for transmitting the conflict for inflation, interest and exchange rates. A deal could ease the risk premium, while its absence keeps pressure on energy chains. The odds quoted are the presenter's estimates, not official projections.

Automatically translated from Portuguese.