The mediate East conflict has spawned many emotions in the financial markets from the beginning. From utmost panic, which led to nearly 10% of the fall on S&P 500 and rising the profitability of American bonds, to optimism all time Trump announced a swift end to the conflict.
Recently, we have witnessed another episode of the White home revelation. Well, as the media reported, Trump issued a one-page memorandum that is yet to end the conflict in the mediate East. This was a decision that one more time led to a advanced volatility not only on oil quotations, but besides on the leading S&P 500 index, bonds and ]]>precious metals]]>.
Trump’s Non- Accidental Memorandum
On May 6, 2026, Donald Trump's administration presented a proposal for a one-page memorandum of agreement with Iran to formally end the two-month conflict in the mediate East. Accepting the paper by the Iranian side would trigger a 30-day period of negotiation on the simplification of Iran's atomic programme, the abolition of US sanctions and the restoration of freedom of navigation in the strategical Strait of Ormuz. Trump, commenting on the substance on fact Social, expressed optimism, stressing that Operation "Epic Fury" could be concluded rapidly if Tehran accepted the agreed terms.
How did Iran respond to this memorandum?
The Iranian side accepted the proposal skeptically. MFA spokesperson Esmaeil Baghaei confirmed that the paper is being analysed and the consequence will be transmitted through Pakistani mediators. However, we hear that the Iranians specify the memorandum as a "American want list" alternatively than a real basis for an agreement.
So was this another Trump game to buy a small more time?
It seems that the minute the memorandum was announced was not accidental. erstwhile again, specified a "breakdown" occurs at a time erstwhile the profitability of US 10-year bonds exceeds 4.4%.
Source: tradingview.com
Earlier, at akin levels of bond yield (end of March of this year) we heard about the extension of the suspension of attacks on Iranian power installations, or by going back a small bit in time were the levels at which Trump introduced a 90-day customs tariff pause in April 2025.
Why is this level important? It is recognised by the strategists as a "pain zone", a minute erstwhile the costs of serving US debt emergence to unacceptable levels.
Cheap oil, is that inactive possible?
If we are talking about ending the conflict in the mediate East, we immediately think of cheaper oil, which is to be the wake of the beginning of the Strait of Ormuz. Although the situation even after the beginning of this delicate passage will not stabilise overnight, yesterday shows that investors perceive it completely differently.
So will oil rapidly return to pre-conflict levels?
According to Morgan Stanley, the current oil shortage is the largest in the past of the oil market, covering as many as 13–14 million barrels a day, while the marketplace is divided into 2 camps: specialists focusing on a immense scale of shock, and general investors hoping that the crisis will be short-lived due to political decisions.
Oils are added to the fire by the statements of specified people as Amos Hochstein, erstwhile advisor to Joe Biden for mediate east Affairs, who in an interview with Bloomberg Podcasts stated that we are approaching the supply cliff of oil and its products. Hochstein points out that despite what prices we see on the future contracts (for the minute of the $110 podcast per barrel of Brent oil), they have nothing to do with the reality where the physical marketplace sells a barrel of the same oil from $115 to even $177.
What, then, is the real market?
Let me mention one more time to the analysis of institutions/people from the industry.
Morgan Stanely: The planet has been coping so far thanks to the large stocks collected in 2025 and oil transported by sea. However, these supplies run out at a very fast pace. If the flow through the Ormuz Strait is not resumed within 4–6 weeks, the marketplace will become highly tense as early as June.
Very akin situations are seen by well-known natural material marketplace analyst Jeff Currie. The expert emphasizes that the only minute in his career, erstwhile he saw specified gigantic weekly changes in stock levels, was the period of the COVID-19 pandemic – at that time we had a reverse situation, the stockholding states grew dynamically due to deficiency of demand. There are now 25 million barrels a week in stock, which is an utmost and different scale under average conditions. According to him, the biggest threat concerns diesel, aviation fuel and LPG, which could paralyze transport and logistics on a global scale.
Shock is expected to be even greater, as these evidence declines in stocks happen in the alleged transition months, i.e. during the year, which is usually characterised by the lowest economical activity and the lowest request for oil – the strategy is not yet subject to the summertime highest of departures.
Currie stresses that present we are surrounded by ]]>oil deficit]]>where request exceeds supply. A real shock, on the another hand, is expected to happen erstwhile there is simply a deficiency of physical goods, not until the current stock is emptied. According to him, Europe will scope "the bottom of the reservoirs" (total deficiency of supplies) in May, while in the US it will happen around 4 July or earlier.
Why are specified forecasts, since we are to have around 8 billion barrels of oil worldwide in storage, what is the illustration (the red line) below?
Source: JP Morgan Global Commodities Research
JP Morgan's strategists come to answer that question. They estimation that with 8.4 billion barrels of oil available at the beginning of this year only about 900 million barrels can be utilized in real terms without overburdening the operating strategy (technical-logistics strategy of global oil stocks). By now, around 280 million barrels have been used, meaning that about 580 million barrels are inactive available. According to analysts, this oil can be utilized by June or July this year – we are talking about stocks that can be freely traded.
If ]]>The Ormuz Strait will not be opened]]> By September this year, JP Morgan predicts that we will scope the level of reserves (approximately 6.7-6.8 billion barrels), which in practice will mark the bottom of global oil stocks in the world. Why? due to the fact that they are to be “technology” quantities that are blocked in pipelines, tanks, refineries and the full operating system, which guarantee the correct operation of the network.
Given all of this, it is not amazing that the global oil marketplace is not prepared on a real scale of shortages, and the optimism of stock investors is separated from the brutal reality of deficiency of physical natural material. Although the full planet is now awaiting Iran's decision on Trump's memorandum, experts point out that even if it is opened, it will not be like a "snap of the switch" or alternatively a "slow unwinding of the cock", which will be linked to the reconstruction of infrastructure, supply chains or the demining of the strait.
Continue reading: ]]>Independent Trader - Financial independence]]>
Dividend investments. ]]>How to analyse dividend companies?]]>
Author: ]]>Krzysztof Miazga]]>
