The Liberty Daily 
(Zero Hedge)—Seven months into the war, the Iran story has settled into a familiar loop: Tehran sets conditions, Washington rejects them, a tanker catches fire, oil stays at $100, repeat… then a modest de-escalation before markets open on Monday morning and reversal around Friday’s closer.
This weekend, though, felt different. Nearly every piece of the puzzle moved at once, and the man at the center of it all made clear that he has a decision to make.
“We have a decision that I’ll make about Iran. Iran’s been decimated. So the only question is, it’ll either be the easy way or the hard way,” President Trump told reporters outside the White House on Saturday. Asked what was coming, he offered the kind of non-answer that tends to precede actual answers, or even more non-answers: “If I told you, you’d have a major story, right? But you’ll see.”
Here is what happened over the weekend, and what to watch in the week ahead.
The Camp David War Council
The “you’ll see” makes more sense in light of what happened on Friday. CBS News confirmed that the administration’s entire Iran brain trust met at Camp David: Vice President JD Vance, Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, special envoy Steve Witkoff, CIA Director John Ratcliffe and Joint Chiefs Chairman Gen. Dan Caine. Axios first reported the unannounced session, which Vance chaired. Two items were on the agenda: the Iran war, and the Saudi-Houthi war in Yemen that is now spilling into global oil routes (more below).
The White House has not said what was decided. One person familiar with the meeting told Axios that “things were decided or at least deeply discussed,” which is a remarkably candid way of saying nothing, right about par for the course for an Axios “scoop.” For context, the last time this crowd quietly decamped to the Maryland mountains to talk Iran was in June 2025. You may recall what followed (spoiler: it involved B-2s).
Meanwhile, the military is moving into position regardless. The USS Theodore Roosevelt carrier strike group and the USS Makin Island amphibious group are heading to the Middle East with about 7,000 sailors and 2,000 Marines, due by the end of October. Bloomberg notes that this could give the US three carrier strike groups in the region, a concentration not seen since the opening phase of the Iraq war in 2003. Hegseth, for his part, called the US blockade of Iranian ports “ironclad.”
We flagged the build-up when the third carrier was first announced in “Supertanker Ablaze After Iran Attack In Hormuz As US Deploys 10K More Troops & Third Carrier To Mideast” (Oct 1). Trump himself had been dropping hints for days:
On timing, Trump told TIME last week that heavier strikes are “possible” after the Nov. 3 midterms. And according to Bloomberg, Iranian officials themselves see little chance of a deal before the vote and a “high chance of escalation” after it. So “decision week” may yet turn into “decision month” (this is still Washington, after all).
Bombers Out Of Britain
The other military headline came from England. The Pentagon confirmed on Sunday that all US bombers deployed to RAF Fairford, a dozen B-1Bs that had been used for strikes on Iran, have returned to their home stations in the United States. The move came a week after several men were arrested near the base on suspicion of preparing terrorist acts. The WSJ first reported the redeployment.
“While operational security precluded us from confirming the movement of our assets and forces in real-time, we can acknowledge now that all US bombers that were deployed to RAF Fairford have re-deployed to their home stations in the United States,” a Pentagon spokesman wrote, per Reuters.
UK Prime Minister Andy Burnham said on Wednesday that Britain has “strong indications” Iran was involved in the plot. US intelligence describes an IRGC-linked handler recruiting British citizens for a multi-stage operation, starting with a diversion near the base. Trump said the plotters had planned “big damage,” while Rubio pointed to the “hands of a foreign actor.” Tehran called the accusations baseless and summoned the British ambassador. Five British suspects, plus a sixth with dual British-Iranian citizenship who was arrested in London, have all since been released on bail. Some UK officials have also questioned whether the plot was as sophisticated as US accounts make it sound.
The Pentagon insists that moving the bombers does not reduce its long-range strike capability. That is probably true: B-1s can reach Iran from the continental US with aerial refueling. It just takes a lot longer, and nobody has to worry about who is loitering near the fence line. Make of that what you will.
Two More Tankers Hit, And Hormuz “Will Not Be Opened”
On the water, the attacks continued. On Sunday the UK Maritime Trade Operations agency (UKMTO) reported two more tankers struck by unknown projectiles (CNBC). One was hit inside the Strait of Hormuz and suffered engine-room damage. The other, a crude carrier roughly four nautical miles east of Oman, was hit on its port side. All crew were reported safe and no environmental damage was reported. By SBS’s count, that makes at least four incidents in October alone. The first was the 2.5-million-barrel supertanker set ablaze off Oman on Thursday, which Iran’s Fars said was using an “unauthorized” route.
UKMTO’s latest weekly report counts 91 incidents of damage to vessels since February. Since July 6, 31 of 48 projectile strikes have happened along the southern Omani route, the US-facilitated corridor that much of the recovering Gulf traffic now uses.
Hours before the latest strikes, Iran restated its terms. Per Reuters, parliament speaker and chief negotiator Mohammad Baqer Qalibaf said:
“The position of the Islamic Republic of Iran is completely clear and firm, and the Strait of Hormuz will not be opened until our seven conditions, based on the Islamabad Memorandum of Understanding, are met… [Washington] must understand that the period of dragging out the (diplomatic) process and dictating one-sided demands is over.” (emphasis ours)
For anyone who has lost track, these are the seven conditions Tehran presented in September: (1) lift the maritime blockade; (2) restore Iran’s frozen assets; (3) lift sanctions on Iranian oil exports; (4) halt all US actions “under the pretext of threats and military operations”; (5) end the war on Iran and its regional allies; (6) withdraw US forces from areas around Iran’s borders; and (7) pay compensation for war damage and commit not to interfere with Iran’s nuclear and missile capabilities. Translation: everything, plus reparations. So it is perhaps not a shock that Trump “promptly rejected” the seven-day reopening plan built on these terms.
Foreign Ministry spokesman Esmaeil Baghaei said that the US counter-proposal, relayed via Qatar, is “more or less in line with their previous positions, specifically on the nuclear issue.” He added that Tehran’s focus “in this stage is the issue of the Strait of Hormuz,” and denied that Iran had offered UN inspections in exchange for sanctions relief. One official briefed on the talks told Reuters that the dispute is about the sequencing of steps, not their content. Meanwhile, FM Abbas Araqchi warned that if the US “again move[s] towards military solutions, we are more prepared than before.”
“Iran Zero”: The Blockade Bites
The irony is that the strait Iran is “keeping shut” is increasingly open to everyone except Iran. As we laid out in “Gulf Exports Roar Back To Pre-War Levels, Goldman Says” (Sep 30), Goldman’s commodity strategists estimate that Persian Gulf oil exports, including “dark exports,” have effectively recovered to their 2025 average. Saudi Arabia led the rebound… while Iran fell below 20% of its 2025 level.
In this weekend’s update for clients (available here for pro subs), Struyven, co-head of Goldman’s global commodities research, put the latest number at 23.6mb/d, about 4mb/d of which is estimated dark exports. He added that “the data show no seaborne crude exports from Iran in September.” JPMorgan, cited by Bloomberg, estimates Middle East crude shipments are back to 17.5mb/d, or 98% of pre-war levels. According to Bloomberg tanker tracking, Saudi crude exports jumped from 3.4mb/d in August to roughly 6.1mb/d in September.
Treasury Secretary Scott Bessent kept score in our earlier post “First Time In History”: Bessent Says Iran Faces Zero Oil Revenue As Tanker Loadings Collapse: “barrels out of the Strait: U.S. about 1.1 billion, Iran zero… For the first time in history… they will have no oil on the water this week. They will have no revenue.”
Which brings us to the man whose job was to produce that revenue.
The Oil Minister Who Had No Oil To Sell
Iran’s oil minister Mohsen Paknejad resigned on Sunday. State media said the reasons were “personal.” Hamid Bovard, chief executive of the National Iranian Oil Company, takes over as acting minister.
Mehdi Tabatabaei, communications deputy in the president’s office, told state TV that Paknejad had resigned “a long time ago” and that President Pezeshkian accepted it at Paknejad’s insistence. The timing is still remarkable. Just hours before the news broke, Paknejad was quoted by state media insisting that “revenues of the oil that we have sold are still coming and that will continue, God willing.” When an oil minister leans on divine intervention for cash flow, the cash flow is probably not great.
The Rial: 2.7 Million And Counting
The clearest scorecard of the economic war is Iran’s currency. On the open market the rial has fallen to a record low of about 2.7 million per dollar, and the euro topped 3 million rials for the first time (per Iran International). That is despite a central bank plan to inject $2 billion of banknotes, with the first $1 billion sold through banks at up to $10,000 per ID holder. Official year-over-year inflation has hit a record 89.8% (in reality it is much higher), and at the current rate the monthly minimum wage of 166 million rials works out to roughly $66.
Bloomberg calculates that the rial has lost about 25% against the dollar in the past two months alone. Readers who were with us for “Iran’s Deadline Expires Today”: Tehran Threatens Renewed Attacks As Blockade Bites, Rial Collapses will recognize that the slide is accelerating rather than leveling off. Bessent calls the collapse proof that the sanctions campaign is working. Economy Minister Ali Madanizadeh says “predictions of collapse repeatedly proved wrong” and blames “psychological pressure.” Both may well be true, which is what makes Tehran’s next move so hard to call.
Kuwait University’s Bader Al-Saif put the dilemma well to Bloomberg: “Everyone has a breaking point, and Iran is no exception… The irony is that such pressure can yield opposing responses: concessions or a preemptive strike.”
Meanwhile In Yemen: Oil Advances As Traders Track Saudi-Backed Offensive
As if one war weren’t enough, a second front reopened on Sunday. Yemen’s Saudi-backed government launched a major offensive to recapture all Houthi-held territory. Presidential Leadership Council head Rashad al-Alimi vowed to fight “until the country is liberated from the grip of the terrorist militia.” According to Reuters, the Saudis are leading the air campaign while Yemeni forces fight on the ground, and the US is already providing intelligence.
The stakes are about oil as much as territory. Last month’s Houthi offensive captured the Bab el-Mandeb strait and some 150km of Red Sea coast, the very bypass route Riyadh has been using to get crude out without getting blasting for shipping through Hormuz. On Sunday the Houthis responded by claiming missile and drone strikes on Saudi Aramco sites in Riyadh and Khurais, saying they caused major fires. Saudi Arabia has not confirmed the claims. We covered the opening shot in “In The Name Of God”: Yemen Leader Orders All-Out Offensive Against Iran-Backed Houthis.
Oil noticed. Brent rose 81 cents to $103.06 in early Asian trading Monday and WTI rose to $91.57. December Brent was already up almost 5% last week, even though OPEC+ agreed to keep November quotas unchanged and the G7 announced a release of up to 100 million barrels of emergency oil and diesel. The world’s largest crude exporter is now fighting a ground war on its southern border while its Gulf coast exports run through a strait it doesn’t control. That is not a recipe for cheaper oil.
Regular readers know we have argued since March that the Hormuz bypasses (Fujairah, Yanbu and the Saudi East-West pipeline) would become the war’s main battleground. The Houthi push on Bab el-Mandeb is the darker version of that call: Iran’s proxies don’t need to close Hormuz if they can close the exit. Abu Dhabi is reading from the same playbook (See “Zero Hormuz”: Abu Dhabi Crown Prince Readies Tens Of Billions To Turn Fujairah Into Hormuz Bypass).
Why Is Oil Still $100? Goldman Explains
That is the question Goldman’s commodity desk says it keeps getting. Gulf exports are back to 2025 levels, global inventories are still above early-2025 levels (when Brent was $75), and Goldman Research sees the market roughly balanced in September. Desk strategist Thomas Evans answered in Sunday’s Weekly Commodity Thoughts (available to pro subs):
“The physical story has eased; the risk premium has not… Futures and spreads sit near local highs because the market continues to price substantial risk premium – we’d put it at roughly $20-25/bbl. That premium is justified here, because the balance delta matters: we entered this conflict with inventories on the highs and ample spare capacity; we now sit at record-low global stocks (ex-OECD commercial), with spare capacity of uncertain/at risk availability… The relevant risk is an attack taking Gulf flows back below 50% inside a few days – against a far thinner buffer. Stocks and price go non-linear once thresholds break.” (emphasis ours)
The positioning detail matters more. For the first time in this conflict, Evans says, specs are buying outright delta instead of calls: “Many macro books are structured to perform if the crisis eases but bleed badly if oil spikes toward $130 – effectively short oil in the tail.” In other words, a large chunk of the macro community is positioned for the “easy way.” It is worth keeping that in mind when a president keeps saying “or the hard way.”
Jerome Dortmans, Goldman’s global co-head of oil and products trading, was blunter on the bank’s Weekend Macro Call:
“My view remains that the ability for Iran to disrupt the flows out of the Strait is significant… And there’s a part of this that thinks they are allowing these barrels flow out, for whatever reason… But I would think it would be too complacent to think that this is going to be the regular state of the Strait… the headline that they’re bringing a third carrier group into the region and 10,000 more Marines.. is certainly not going to be something that the Iranians are going to ignore.”
On the research side, Struyven is sticking with Goldman’s base case that “Brent prices moderate to $85/bbl by year-end and to $80 in 2027.” He adds that “we still worry about renewed potential escalation that damages more energy infrastructure, which could cause significant upside to prices.” Sam Dart, his co-head, points out that the LNG recovery lags far behind oil. Hormuz LNG crossings are running at only 21% of pre-war levels, and if Gulf LNG exports stay stuck near 25% through the winter, Goldman estimates that European TTF gas would need to rise above €100/MWh.
Bloomberg’s own explainer lands in the same place. Global stockpiles of about 4.3 billion barrels are down more than 400 million barrels since March (Energy Aspects) and at a five-year low. Tanker rates top $1.2 million a day for the Persian Gulf to China run. And with bond yields at 2002 highs, traders are once again using oil as an inflation hedge. BofA’s economists summed up the mood in their Global Economic Weekly (“The fog of war”): “oil flows are normalizing in the Middle East, but Brent keeps trading above $100 per barrel… Something does not add up.”
Decision Week: Easy Way Vs. Hard Way, Priced
So what is each path worth? BofA’s commodity team, in Friday’s Oil Gusher (also available to pro subs), raised its 2H26 Brent baseline to $95 (from $83) on the view that “skirmishes seem likely to continue into yearend.” Its scenario tree maps neatly onto Trump’s binary:
- Deal / back to the MoU (“less likely”): flows of more than 10mb/d resume; Brent averages $83 in 2H26 and $75 in 2027.
- Skirmishes continue (baseline): intermittent flows of 5mb/d; Brent averages $95 in 2H26 and $80 in 2027.
- Back to intense combat (“unlikely”): Brent goes to $120 in both 2H26 and 2027.
- War hits energy assets (tail risk): Brent averages $150 in 2H26 and $150+ in 2027, with ICE gasoil at $300.
Brent at around $103 is pricing something between “skirmishes” and “combat,” which is about where the Camp David attendees appear to be. Here’s what to watch this week:
- Trump’s “decision.” The president has now said “you’ll see” at least three times in five days. The Camp David readout, or the lack of one, is the main event.
- Tehran’s reply. Baghaei says “additional points” still have to go back to Washington through Qatar. Watch for any movement on sequencing, which is the real sticking point.
- Yemen. The Houthis are advancing on the last road between Taiz and Aden. Any confirmed damage at Riyadh or Khurais, or a stalled Saudi push near Bab el-Mandeb, puts Goldman’s “below 50% inside a few days” scenario in play.
- The southern Omani route. At least four tanker strikes since Thursday. If UKMTO keeps reporting at this pace, the “dark export” recovery in Goldman’s chart above will be tested.
- Tehran’s home front. With an acting oil minister, a rial at 2.7 million and inflation near 90%, the next rial print matters as much as the next tanker report.
- Macro crosswinds. FOMC minutes (Wednesday), 10- and 30-year Treasury auctions, and China’s return from Golden Week on Thursday with October fuel exports suspended. In a market where Goldman says oil is “tracking rates far more tightly than usual,” these matter for crude too.
Bottom Line
Bloomberg’s best summary of the standoff came from the Chatham House associate fellow Aniseh Bassiri Tabrizi: “Both sides generally want an agreement, but they are moving further apart rather than closer.” Iran’s leverage over Hormuz is fading, its currency is in freefall and its oil minister just walked out the door. That is exactly what makes the “easy way” more likely, and the “hard way” more dangerous. Tehran’s hardliners, as one former US intelligence official told Bloomberg, “are betting that they can absorb more domestic pain and wait out US engagement in the region.”
Meanwhile, the oil market, which entered this war with full tanks and ample spare capacity, now has neither. Goldman’s desk puts the risk premium at $20-25/bbl, and the macro crowd is positioned for it to shrink. If Trump picks door number two, that premium will look cheap. We’ll know soon enough. After all, we’ve been told by the president, “you’ll see.”
Much more in the full Goldman Weekly Commodity Thoughts and BofA Oil Gusher notes, available to pro subs.
