11 MILLION BARRELS AND THE BLOCKADE'S CREDIBILITY PROBLEM

• Pakistan says a nuclear deal breakthrough is close. Al Jazeera, citing Pakistani sources, reports that the likelihood of an agreement on Iran's nuclear program has "improved significantly" after Pakistan's army chief Asim Munir arrived in Tehran Wednesday carrying a new US message 14RTN Pakistan-mediated US-Iran talks nearing breakthrough, media. Options reportedly under discussion include sending Iran's 440kg enriched uranium stockpile to a third country or diluting it to 3 percent or below 14RTN Pakistan-mediated US-Iran talks nearing breakthrough, media. Russia's offer to host the stockpile remains on the table after the US previously rejected it, per Kremlin spokesman Peskov 18RTN US turned down Russian offer to take Iran’s enriched uranium, Kremlin. However, Pakistan's Foreign Ministry said Thursday that no dates have been set for the next round of talks 14RTN Pakistan-mediated US-Iran talks nearing breakthrough, media, so "breakthrough" may be generous. Trump said Wednesday the conflict is "close to being settled" but also that a 20-year enrichment moratorium isn't long enough 14RTN Pakistan-mediated US-Iran talks nearing breakthrough, media. Those two statements don't sit comfortably together.

• Israel and Lebanon agreed to a 10-day ceasefire starting Thursday at 21:00 GMT, announced by Trump on Truth Social 2SPK Israel, Lebanon Agree to Begin 10-Day Ceasefire on Thursday - Trump. Netanyahu said Israeli forces will remain in their positions in southern Lebanon, and the Israeli cabinet did not vote on it 2SPK Israel, Lebanon Agree to Begin 10-Day Ceasefire on Thursday - Trump. The IDF chief of staff said Wednesday that plans for continued fighting on both the Lebanese front and against Iran are approved and ready, with Israeli Air Force planes "armed and ready" with targets loaded 19IHY IDF chief: Israeli Air Force ready for immediate strike, including in Iran. Read together: this is a pause, not a peace. Israel is keeping every option live.

• The US Senate blocked a bill to halt further strikes on Iran without congressional approval, 52 to 47 16SPK Senate Blocks Move to Halt US War Against Iran. This is the fourth time Congress has effectively rubber-stamped the war's continuation. The 60-day War Powers deadline is approaching later this month, which should force a real authorization vote, though the current trajectory suggests Congress will find a way to avoid that confrontation too.

• The Pentagon is asking General Motors and Ford to retool factories for weapons production 4RTN Pentagon taps US carmakers for weapons production, WSJ. Discussions began before the war started but have accelerated as the US burns through munitions. Over 850 Tomahawk cruise missiles have been launched in 49 days, against an estimated pre-war inventory of 4,000 to 4,500. The war is costing roughly $2 billion per day, with independent tracker WarSpend estimating nearly $48 billion spent since February 28 4RTN Pentagon taps US carmakers for weapons production, WSJ. Trump has requested a $1.5 trillion defence budget for fiscal 2027, up from roughly $1 trillion this year 4RTN Pentagon taps US carmakers for weapons production, WSJ.

• Australia's largest oil refinery caught fire at a terrible moment. The Viva Energy plant in Geelong, Victoria, which produces about 10 percent of Australia's fuel, suffered a gas leak and blaze on Wednesday night 15AJE Fire breaks out at crucial Australian refinery, raising fuel supply fears. The fire hit the high-octane petrol section; jet fuel and diesel production were spared. PM Albanese secured emergency diesel shipments from Brunei and South Korea 15AJE Fire breaks out at crucial Australian refinery, raising fuel supply fears. Australia imports 80 percent of its fuel and has minimal strategic stockpiles, so this is a genuine vulnerability layered on top of the global supply crisis.

Data is still from April 13, so take it directionally. The big signal is that Brent at $98.80 and the blockade leaking 11 million barrels suggests the market is right to not price in a full Iranian export shutdown. Defence stocks are drifting (Lockheed at $619.70, Northrop at $681.30, both below their mid-March peaks), which reads as the market expecting negotiation rather than escalation. The VIX at 19.43 remains suspiciously calm. The real number to watch isn't in this snapshot: it is how oil reacts when traders digest both the blockade porousness and IEA head Fatih Birol's warning that Europe has roughly six weeks of jet fuel remaining 6AJE Jet fuel shortage: Why Iran war could ground flights in Europe. If those two data points pull in opposite directions (more oil flowing, but not the right kind to the right places), you get a bifurcated crisis where headline crude prices stabilise but refined product shortages bite hard in specific sectors and regions.

The jet fuel warning is the sharpest new data point for Western consumers. IEA chief Birol told AP that Europe has "maybe six weeks or so" of jet fuel left, warning of possible flight cancellations "soon" if oil supplies remain disrupted 6AJE Jet fuel shortage: Why Iran war could ground flights in Europe. Around 75 percent of Europe's jet fuel imports come from the Middle East 6AJE Jet fuel shortage: Why Iran war could ground flights in Europe. This lands just as summer travel season approaches (Europe saw 747 million international arrivals in 2024). In the UK, the government is planning for worst-case food shortages, specifically chicken and pork, by summer if the Hormuz situation persists 11BBC UK prepares for food shortages in worst case scenario as Iran war continues. The concern centres on carbon dioxide supply disruptions (CO2 is used in animal slaughter and food preservation). Tesco's CEO says no supply issues yet, but the British Retail Consortium noted the war is adding "inflationary pressures at a time when retailers already face significant new costs" 11BBC UK prepares for food shortages in worst case scenario as Iran war continues. The FAO is now explicitly warning that fertiliser shipments stuck in the strait will affect the next planting cycle, meaning food price impacts arriving late 2026 and into 2027 20ABC Strait of Hormuz blockade could turn into global agrifood crisis. The damage is slow, structural, and compounding.