Chekhov's gun in Iran. Deal? Almost? No? Maybe?

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Week of 3 August – 9 August 2026

Iran. This seemed like one of the most mixed messaged weeks of the Iran war, with the deal staying somewhere between almost done and disintegrating back into word puzzles and standoffs. Iran and Oman said their Strait of Hormuz agreement is in its final stages, but that doesn't mean it opens; Tehran says they stopped talking to the US, and the strait stays shut until Washington pays compensation, lifts the blockade, removes sanctions and pulls its forces back; President Trump says they're talking, but the US is "low-keying it" and can wait for 77% inflation to do the negotiating.

My favourite short and sweet assessment of the situation was one by Carlyle, which put the more optimistic odds for a negotiated settlement at 60%, 30% for escalation, 10% for a US exit without resolution. The only thing I'd change is the split between the hopeful deal option and the escalation to be more even, because Chekhov's gun still has many bullets left. Carlyle recounts that nearly 60,000 US troops, two nuclear carrier strike groups, dozens of warships and hundreds of combat aircraft remain in the region, across bases and at sea, munitions depleted but substantial combat power intact; and while Iran has lost about 65% of its military capacity, what remains is still plenty to keep fighting. The Houthi drone on the Jizan refinery, two days after Saudi Arabia signed a defence pact with Turkey and Pakistan, shows the cast widening while the principals talk through intermediaries.

Meanwhile, the UAE has managed to move over 130 million barrels out of the Gulf, more than anyone else, pointing to its skill at both strategy and communication.

US diesel exports hit a record 1.9 million barrels a day amid global shortages, Sinopec is swapping Saudi barrels for Russian, and the majors banked a record $70 billion in quarterly free cash flow and spent it on debt, positioning for the downturn rather than celebrating the boom as told by Javier Blas in his Bloomberg column. However, that cyclical story is not well known outside of the industry and its experts, so the optics of windfall profits amidst high consumer prices are still fuelling Donald Trump's demands of the oil companies to "get your consumer (retail!) Oil Prices DOWN, NOW!"

Turning the page to industry in Europe. The UK is now retelling Europe's story of dire statistics in the chemicals sector, with closure rates doubling between 2020 and 2025, speciality output down nearly 40%, the sector's economic contribution down 70%, reaching as far as medicines and missile propellants. Ineos has wagered over €400 million that the sector is undervalued, a rare insider betting on the recovery of what everyone else is writing off, and to the frustration of its creditors, who would have preferred the cash went towards the group's $19 billion debt.

Power balance. My radar for hardening electricity system reliability risks has been shining bright lately. One indicator, I think, is when you start seeing words like "capacitor" and "oscillation" in several major non-engineering titles. The heatwave knocked out nuclear and coal plants across six European countries due to cooling problems, Norway's hydro reservoirs sit at a 30-year low, gas storage is at its lowest for this time of year in almost two decades, and to make matters worse, Wednesday's eclipse removes 9.7GW of generation. The saving grace here is that we are in the dead of August, during which Europe's predominant occupation becomes the beach, so the overall lower energy demand is probably keeping this manageable. So far.

Asia has no August cushion. Nearly 60% of the region's land area has dimmed since the war began, and Indonesia, the third-largest producer of thermal coal, cannot keep its own lights on. The strongest El Niño in 76 years is now building over these economies, promising drought and heat for grids already running on fumes. And the newest load is proving to be no gentler than the war: AI data centres' sudden and massive demand spikes, up to 50% above design capacity, are breaking the energy equipment, with gas turbines cracking and batteries needing replacement within months or even weeks from the aggressive ramping.

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The Week's Stories

Iran and the Strait of Hormuz

Monday, August 3

• Asia’s Energy-Starved Nations Go Dark as Hormuz Tensions Drag On (Bloomberg)

Tuesday, August 4

• Three paths forward on Iran (Carlyle)

Wednesday, August 5

• Dozens of Idling Iranian Oil Tankers Show US Blockade Is Working (Bloomberg)

Thursday, August 6

• Iran Says Deal With Oman on Strait of Hormuz Agreed in Principle (Bloomberg)

• Oil Holds Three-Day Drop as Iran, Oman Reach Hormuz Agreement (Bloomberg)

• UAE Defies Hormuz Risks to Keep Crude Flowing to Global Market (Bloomberg)

Friday, August 7

• Oil Ships Signal Egypt and Suez to Mask Saudi Red Sea Loadings (Bloomberg)

Saturday, August 8

• Tehran says US must meet new conditions before Iran reopens strait (Financial Times)

Sunday, August 9

• Iran Rejects US Talks as Trump Displays Patience for Hormuz Deal (Bloomberg)

• Iran says Oman deal is in 'final stages' but US must act to open Hormuz (Reuters)

• Yemen's Houthis attack Saudi refinery after kingdom signs defence pact (Reuters)

Energy Security

• Record El Niño Threatens Fragile Economies Squeezed by War (Bloomberg)

• Trump Says Hormuz Talks ‘Moving Along’ Even as Iran Mulls US Ban (Bloomberg)

• Solar eclipse threatens to tighten Europe’s electricity squeeze (Financial Times)

Capital

• Aramco Profit Jumps 33% as US-Iran War Boosts Oil Prices (Bloomberg, August 4)

• Big Oil Is Bracing for Lower Prices — and Rightly So (Bloomberg, August 6)

Industry

• UK’s ability to make medicines and missiles hit by decline of chemicals industry (Financial Times)

• Jim Ratcliffe’s Ineos doubles down on European chemical sector shares (Financial Times)

New Map

• US Diesel Exports Surge to Record as World Grasps for Supply (Bloomberg)

• UAE’s Adnoc Buys Tankers for $1.3 Billion as Crude Exports Boom (Bloomberg)

• Middle East buyers interested in LNG cargoes from Canada, Pacific Energy says (Reuters)

• Venezuelans take to the streets as country hit by daily blackouts (Financial Times)

Russia

• Russia expands shadow LNG fleet to beat EU crackdown (Financial Times)

• EXCLUSIVE: Sinopec steps up Russian oil imports to offset Mideast supply cuts, traders and tracker say (Reuters)

AI and Data Centres

• AI’s Volatile Power Demand Is Damaging Its Own Data Centers (Bloomberg)

Transition

• Solar’s Boom in Europe Is Reaching Places Once Deemed Too Dark (Bloomberg)

• The global green transition won’t be driven by self-interest alone (Financial Times)

Coal

• Sasol’s Wartime Windfall Revives Debate Over Coal’s Future (Bloomberg)

• One of the world’s biggest coal producers battles to keep lights on (Financial Times)

Africa

• South Africa Seeks Adviser for Eskom Spin-Off Creditor Talks (Bloomberg)

• A Half-Century Wait for Soviet-Era Nigerian Steel (Bloomberg)

• Libya Sees 2 Million-Barrel Oil Plan on Track as US Pushes Unity (Bloomberg)

Upstream

• Energy Dept. draws fire for slow pace of Venezuelan oil deals (Axios)

• BP North Sea exit presents wake-up call on Scottish energy (Financial Times)

Minerals

• Trump expected to attend event with mining execs amid critical minerals push (Reuters)

• Copper Marches Closer to $14,000 as Flows to US Tighten Market (Bloomberg)

Deals

• BP Puts Biogas Unit for Sale as O’Neill Steps Up Turnaround (Bloomberg)

Policy and Regulation

• UK state subsidies soar as post-Brexit support boosts energy projects (Financial Times)

Macro

• US gas guzzlers see off Europe’s EVs in latest round of car wars (Financial Times)

Emissions and Climate

• European wildfire costs this year have already surpassed €3bn (Financial Times)

If you are looking to go deeper and determine your positioning, engagement, or develop communication, let's chat. Book a free call below, or send us an email.

SOURCES Bloomberg, Financial Times, Reuters, Axios, Carlyle

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