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Fragile Iran 'Pause' Shattered As US Base In Jordan Comes Under Attack, Oil Soars

Tyler Durden's Photo
by Tyler Durden
Authored...

Summary

  • Oil soars on reports of Iran targeting US Jordan base; Iraqi militants attack KSA for 2nd day.
  • Hormuz indirect talks continue amid reports of a possible resurrected MoU deal.
  • Shipping remains stalled with virtually no tanker traffic through Hormuz.
  • Iran insists Hormuz stays closed unless its terms are accepted.
  • Houthis escalate attacks, prompting more ships to avoid the Red Sea.

*  *  *

Fresh Unilateral Strikes on Jordan Base; Iraqi Militants Again Target KSA 

Iranian state media in the overnight hours (local) are reporting fresh apparent Iranian missile attacks in Jordan. A "US base in Jordan was possibly targeted" after reports of explosions there, Fars and IRIB report. Tehran officials have insisted they have not requested US talks following the prior nearly two straight weeks of fighting, though a 'pause' took effect last Friday when President Trump ordered a halt to US airstrikes. The day was filled with headline hype of a potential 'resurrected' MoU deal. Once again these 'deal is close' headlines prove misleading and premature. CENTCOM is confirming on the heels of the Iranian media reporting:

  • Senior American official: Iran launched missiles toward an American base in Jordan (Axios)
  • CENTCOM: IRGC forces launch multiple ballistic missiles from Iran and all Iranian missiles were effectively intercepted

Adding to the uncertainty and jitters of already sensitive global oil, Iraqi militants on Tuesday fired projectiles on Saudi Arabia for a second day, also amid the ongoing missile threat from Yemeni Houthis. According to the Associated Press:

Saudi Arabia said Tuesday that it shot down drones fired by Iran-backed militias in Iraq for a second day, while Iran-backed Houthi rebels in Yemen claimed to have forced a Saudi oil tanker to turn around as part of their self-styled blockade of the kingdom.

The attacks underscored lingering tensions despite a period of calm between the United States and Iran, neither of which has announced attacks for days following weeks of escalation over the Strait of Hormuz.

The Saudi Defense Ministry said in a statement that air defenses intercepted and destroyed several drones that had attempted to target petroleum facilities in the nation’s eastern region. It said the attacks were “once again launched from Iraqi territory and carried out by Iran-affiliated terrorist militias.”

Oil climbing on the headlines of the rare pro-Tehran aggression during a 'pause':

WTI OIL JUMPS 5% AS US INTERCEPTS IRANIAN ATTACK ON ITS TROOPS

Below: unconfirmed initial image circulating...

Shipping Latest: Bab El Mandeb & Hormuz

Iran has reaffirmed that if Oman does not agree to its terms for the Strait of Hormuz, the the vital oil transit waterway will remain closed, per Iran's Deputy Foreign Minister. This also as things are again heating up in the Red Sea region, with the Houthis late Tuesday announcing they've once again targeted a Saudi oil tanker for violating the blockade. Reuters reports:

Yemen’s Houthis claim to have fired ballistic missiles at a Saudi oil tanker, accusing the vessel of violating what they describe as their maritime blockade on Saudi Arabia in the Red Sea and ignoring warning calls.

The Iran-aligned group’s military spokesperson, Yahya Saree, claims the vessel was forced to turn back.

According to separate reporting, China is holding direct negotiations with Yemen's Houthis to ensure safe passage for its ships through the southern Red Sea.

Iran says it hasn't sought US talks in past 16-17 days, reports Irib News

And a US CENTCOM update on its latest figures: it says that as of Tuesday the US military has redirected 18 commercial vessels, disabled two, and boarded another two to "ensure full compliance of the US blockade against Iran." The latest from Netanyahu's meeting with Trump at the White House:

Channel 12 on a senior Israeli official: Netanyahu confirmed to Trump that additional strikes on rehabilitated Iranian nuclear facilities are unavoidable

More vessels reportedly turning away from planned routes after Houthi threats:

Fox Reports Mediators 'Close' to Resurrecting MoU

Here we go again... despite no evident change in war posturing on either side, and despite shipping traffic still largely at a complete standstill in the Strait of Hormuz, Fox News is out with claims that the failed Memorandum of Understanding (MoU) could be 'resurrected'... bringing us back to the 'deal is close' constant headlines of earlier this summer (though of course the sides were never in reality close - and simply returned to a wider bombing campaign)...

"Mediators of the ongoing conflict in the Middle East believe the U.S. and Iran are close to a deal that would resurrect the failed memorandum of understanding, according to The Times of Israel," Fox writes, based on the earlier Israeli media article. Negotiators from Pakistan, Egypt and Qatar have been haggling over an Oman-proposed Strait of Hormuz management plan. It will involve fee-collection and is backed by the Gulf states, supposedly. The timing of all of this interesting given Trump is currently hosting Netanyahu at the White House. More from Fox:

Iran and Oman — both of which are situated on the Strait of Hormuz — have reportedly signed off on the proposal advanced by the mediators.

The two sources said the White House was waiting to make a decision until after President Donald Trump meets with Israeli Prime Minister Benjamin Netanyahu on Tuesday.

Meanwhile...

JMIC: DATA INDICATES ZERO TANKERS IN EITHER DIRECTION OF HORMUZ

Still, the return to deal 'optimism' has pushed oil prices down further - which is perhaps the entire point of US officials anonymously hyping that a deal is 'close' once again.

And S&P futures briefly reached High of Day on the headline...

Oman's Hormuz Management Proposal

US-Iran attacks have remained paused, and oil prices have extended their declines, as President Trump has claimed Tehran and Washington are now having "very friendly talks" while at the same time suggesting negotiations might not be prolonged.

"We are in very deep talks with Iran. If they don't work out, we will go back to very strong military action," Trump told Axios, as we highlighted previously. But possibly the most promising development in terms of an off-ramp is that Oman has presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz.

This would reportedly include including collecting voluntary fees for using it, ​according to sources who spoke to Reuters Tuesday. The report notes that "The plan could serve as a basis to end the disruption to trade through the strait caused by the ‌U.S.-Israeli war on Iran."

via Reuters

However, this also to some degree represents the stalemated situation going back to square one, given the United States has consistently and vehemently opposed any fees being collected that would go to Iran. An immediate response from Tehran on the proposal has not been forthcoming, and talks could drag on for days related to the Oman plan. Already Tehran is adding some strict conditions regarding frozen or seized Iranian assets abroad, per Bloomberg citing state media:

"Any company or country that receives funds from Iranian assets will not be allowed to pass through the strait," semi-official Tasnim news agency cites a spokesman for Iran’s central military command as saying in response to recent US proposal.

Reuters provides more detail in the following: "The system would be analogous to one in place on Asia's Strait of Malacca, where Indonesia, Malaysia and Singapore ask ships to pay voluntary contributions to fund navigation, environmental protection and search-and-rescue operations."

"The Western diplomat compared it to a voluntary carbon tax for flights, where anyone buying a plane ticket can choose to tick a box if they want to pay to offset their emissions," the report adds.

'Glimmer of Hope' Amid Indirect Hormuz Talks

The Wall Street Journal has said this represents a "glimmer of hope" as fighting has halted since last Friday:

A U.S. official and mediators said Iran and Oman were still far apart on some issues, including whether to charge fees for transit. But both sides said there was progress, marking the first glimmer of hope for diplomacy since President Trump ordered a new round of military strikes on Iran more than two weeks ago in response to Tehran firing on commercial vessels in the strait. 

...The goal of the Iran-Oman talks is to agree on which route vessels can take through the 22-mile-wide strait. Conflict erupted earlier this month after the U.S. began guiding ships through the strait by hugging the Omani coast, while Iran wants vessels to cross through its territory. 

In the meantime President Trump had laid out Monday while speaking to reporters aboard Air Force One his view that there's "plenty of time" to deal with Iran and that "we are talking right now.." He laid out that while "there's a good chance that something could happen," it remains that If not, "we go back to doing what we were doing two days ago."

Trump has on Tuesday reiterated to Fox News that Iran understands it will never have a nuclear, and reaffirmed that the two sides are talking.

Jazan Oil Refinery Shut Down for Repairs After Strikes

Over in Saudi Arabia, where missile and drone attacks out of Yemen (and possibly Iraq) over past days have damaged Aramco facilities, one regional media source says that "Saudi Aramco has shut down its Jazan oil refinery after a Houthi missile and drone attack damaged key facilities at the site, according to reports."

"The refinery, which processes 400,000 barrels of crude per day, suffered damage to its Integrated Gasification Combined Cycle (IGCC) complex and tank farm area. Repairs are expected to be completed and operations to resume by Aug. 15, according to a note from consultancy IIR," Turkiye Today adds.

Satellite imagery also shows alleged damage to gas storage tanks at Saudi Arabia's Abqaiq facility, most recently to be hit targeted likely by the Houthis:

However, there still no official Saudi confirmation of Abqaiq being struck, but only that it was targeted:

As for the possibility of where things go from here, amid potential escalation which could see the Houthis further target Saudi oil complexes, President Trump had also warned in the aforementioned Fox interview that the US will "take out" Pickaxe Mountain if it doesn’t reach a deal with Iran.

He noted that Israeli Prime Minister Benjamin Netanyahu wants the US to stay involved in the Iran war, and the two leaders will meet Tuesday in the late morning hours at the White House.

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