THE STRAIT BECOMES THE WAR

• Iran's diplomatic no-show is now complete. Despite Trump extending the ceasefire specifically to allow Iran to "submit a unified proposal," Tehran has not sent any delegation to Pakistan and published videos mocking the US negotiating posture 1IHY Trump plans next blow against Iran after ceasefire ends. Qalibaf stated flatly that talks cannot happen while the blockade and "Israeli aggression" continue 2AAM Iran says breach of commitments, blockade are primary obstacles to 'genuine' talks with US. Pakistan says the prospect of talks has not evaporated, but the gap between that optimism and Iranian public statements is wide enough to drive a warship through.

• A source familiar with the Trump administration told Israel Hayom that the next phase of strikes is already planned, targeting Iran's national infrastructure, including power plants and energy networks 1IHY Trump plans next blow against Iran after ceasefire ends. The only off-ramp described: a "very significant softening" of Iran's nuclear position, which shows no sign of materialising 1IHY Trump plans next blow against Iran after ceasefire ends. A Western diplomat told the same outlet that Trump has held off on energy infrastructure strikes specifically because of the impact on global oil prices, but that destroying the infrastructure enabling the Iranian regime to function is now seen as unavoidable 1IHY Trump plans next blow against Iran after ceasefire ends. This is a single source, but it is consistent with Trump's own public statements and the trajectory of the past week.

• US missile stockpiles are significantly depleted and cannot be quickly replaced. A Center for Strategic and International Studies (CSIS) analysis cited by CNN found the US has expended at least 45 percent of its Precision Strike Missiles, roughly half its Terminal High Altitude Area Defense (THAAD) inventory, nearly 50 percent of its Patriot interceptors, and about 30 percent of its Tomahawk missiles 9CRD US missile stocks 'significantly depleted' since start of war on Iran: Report. Replacement timelines run three to five years. The implication that matters most: the US is still capable of resuming strikes on Iran, but is now burning through an asset it needs for any potential Pacific conflict. A retired Marine Corps colonel told CNN the Iran war has created "a window of increased vulnerability in the western Pacific" lasting one to four years 9CRD US missile stocks 'significantly depleted' since start of war on Iran: Report. That is the strategic cost nobody in Washington is discussing publicly.

• The US is squeezing Iraq's finances to force militia disarmament. The US Treasury blocked a cargo plane delivery of nearly $500 million in Iraqi oil revenue dollars, the second such blocked shipment since the war began 8CRD US blocks delivery of Iraqi oil revenues to pressure Baghdad into disarming resistance: Report 14AJE US halts shipment of Iraq’s oil dollars to curb Iran-linked groups: WSJ. Washington has also suspended some counterterrorism training funding for Iraqi forces. The State Department said Iraq must "immediately take all measures to dismantle the Iran-aligned militia groups" to restore the relationship 8CRD US blocks delivery of Iraqi oil revenues to pressure Baghdad into disarming resistance: Report. Iran, separately, has given its Iraqi militia commanders greater operational autonomy, allowing attacks without Tehran's explicit approval 19APW Iran gives its field commanders more power over militias in Iraq. The US is trying to cut the funding while Iran is loosening the leash. These pressures point in opposite directions, and Baghdad, caught between them, has no clean exit.

• The UK and France convened a 30-plus-nation military planning conference today at the UK's Permanent Joint Headquarters in Northwood to develop a coordinated strategy for reopening the Strait of Hormuz 16AAM UK, France to lead multinational Strait of Hormuz military planning conference. The conference runs two days and focuses on command structures and force deployment. The key word in the official statement is "once conditions allow, following a sustainable ceasefire." Translation: the Western alliance is building a plan for the day after, not trying to force one now. That this meeting is happening publicly is itself a signal to both Washington and Tehran that European patience with the economic consequences has a limit.

Oil has slid from $112 in March to $93 today, which tells you markets still believe some version of a deal eventually happens. But the Oil Volatility Index (OVX) at 82 says traders are paying heavily to hedge against being wrong about that. The number worth sitting with is the gold-to-oil ratio: at 52.68 ounces of gold per barrel, it is near its highest since the war began, meaning gold is expensive relative to oil. That is what fear without full panic looks like. Defence stocks are quietly bleeding: Lockheed Martin is down nearly 10 percent from its March peak, Northrop Grumman down 13 percent. Markets had priced a longer, more decisive war. They are now pricing an expensive, inconclusive one. If today's ship seizures trigger a US military response in the strait, all of that re-prices violently overnight.

Lufthansa announced today it is cutting 20,000 short-haul flights this summer because jet fuel has doubled in price since the war began 12BBC Lufthansa cuts 20,000 summer flights as fuel prices surge. KLM and Delta have also cut flights or raised ticket prices 12BBC Lufthansa cuts 20,000 summer flights as fuel prices surge. The Gulf supplies roughly 50 percent of Europe's aviation fuel imports, with Kuwait's Al-Zour refinery alone accounting for about 10 percent of European jet fuel 12BBC Lufthansa cuts 20,000 summer flights as fuel prices surge. The International Energy Agency warned last week Europe could run out of jet fuel within weeks, though UK authorities say they are not yet seeing supply disruption 12BBC Lufthansa cuts 20,000 summer flights as fuel prices surge. The gap between "not yet" and "running out" is the number of weeks the Hormuz closure continues. Meanwhile, the US has urged all American citizens remaining in Iran to leave immediately via commercial flights or overland through Armenia, Turkey, or Turkmenistan, warning that Iranian authorities may prevent departures and that dual nationals will be treated solely as Iranian citizens 7AAM US urges citizens to leave Iran immediately as airspace partially reopens.