IRAN IS RUNNING A TWO-TRACK STRAIT POLICY AND IT IS WORKING

• Iran's Foreign Minister Abbas Araghchi publicly accused the UAE of being an "active partner" in the US-Israeli war at the BRICS foreign ministers' meeting in New Delhi 6CRD Iranian FM blasts UAE at BRICS summit over 'direct involvement' in US-Israeli war. He named the UAE directly in a closed session, said hosting US bases and allying with Israel "cannot bring security" to Abu Dhabi, and told the Emirati delegate that cooperation with Israel was "unforgivable." The context: this came hours after Netanyahu's office confirmed he made a secret wartime visit to the UAE, which the UAE denied 13BBC Netanyahu says he 'secretly visited' UAE during war with Iran. Araghchi's comments at a multilateral diplomatic forum are a step beyond private channels. He is putting Iranian grievances on the record in front of the Global South audience Iran most wants to cultivate.

• Saudi Arabia and Kuwait conducted covert strikes on Iran-backed militia targets inside Iraq during the war, according to Reuters, citing multiple Iraqi, Western, and US-briefed sources 8RTN Gulf states attacked Iraq amid waning faith in US, Reuters12TOI Saudi warplanes struck Iran-backed militias in Iraq during war, sources say. Saudi air force jets hit sites near the kingdom's northern border from which drones and missiles were launched at Gulf states. Rocket strikes from Kuwaiti territory hit Kataib Hezbollah positions in southern Iraq in April, killing fighters and destroying a drone operations facility. Neither country has acknowledged the strikes. This adds to a now well-documented picture: Saudi Arabia, Kuwait, and the UAE all conducted independent offensive military operations during this conflict that they publicly denied. The Gulf states are not passive clients of Washington. They fought their own corners.

• A classified US intelligence assessment, reported by the Washington Post, found the Iran war has handed China strategic advantages across diplomatic, informational, military, and economic dimensions 7RTN US intel fears Iran war handed China strategic advantage, WaPo. The document, produced by the Joint Staff's intelligence directorate for the chairman of the Joint Chiefs, found the war has depleted US cruise missile and air defence stockpiles critical to any Taiwan contingency, allowed China to portray the US as an "irresponsible steward" of the international order, and given Beijing a clearer picture of US military doctrine. Meanwhile, China's coal output and renewable energy base have made it the second-most energy-insulated country in the world after the US itself, enabling Beijing to play "energy benefactor" to Thailand, Australia, the Philippines, and others 7RTN US intel fears Iran war handed China strategic advantage, WaPo. One Brookings analyst quoted in the piece put it plainly: "This is not altruism. It is Beijing seizing on an opportunity to drive wedges between America and its traditional partners."

• Israel signed a $34 million contract to develop extended-range fuel tanks for its F-35 Adir fighter jets, covering external tank integration based on existing F-16 designs 9AAM Israel says it inks $35 million deal 'to extend F-35 fighter jet range' amid Iran war. The stated goal is to reduce reliance on aerial refuelling and extend operational range on "long-range missions." The timing is not subtle. Israel has raised its military alert level in preparation for possible resumed war with Iran if diplomatic talks fail 9AAM Israel says it inks $35 million deal 'to extend F-35 fighter jet range' amid Iran war. Extended-range F-35s means Tel Aviv can reach Tehran with less exposure to interdiction along the way.

• The US has so far redirected 70 commercial vessels and disabled four others to enforce its Hormuz blockade on Iranian-bound shipping, US Central Command (CENTCOM) confirmed 3AJE Trump, Xi discuss Strait of Hormuz as Chinese vessels transit key waterway. Meanwhile, the Pentagon revised its war cost estimate upward again, from $25 billion in late April to $29 billion now, with independent analysts at the Security Policy Reform Institute putting the real figure closer to $71.8 billion when munitions consumption is properly valued 15RTN Pentagon hikes estimate of Iran war cost. The gap between the official number and the independent estimate has never been wider.

The interesting signal today is not oil, it is the divergence between oil and everything else. Brent ticked up to $106 but the Oil Volatility Index (OVX) dropped again to 68.8, its lowest point in weeks. Markets are reading the China-Iran shipping corridor deal as genuine near-term de-escalation, at least for one major buyer. That is premature. What actually happened is that Iran carved out a preferential lane for one country while continuing to seize and sink everyone else's ships. The broader Hormuz crisis has not moved.

The producer price number reported Wednesday deserves attention: US wholesale inflation hit 6 percent year-on-year in April, with energy up 22.7 percent annually and diesel up 12.6 percent in a single month 17APW Producer prices shot up 6%, adding to pressure on companies to raise prices for customers. That is the pipeline figure. It becomes consumer inflation in 30 to 60 days. The S&P 500 at 7,506 keeps grinding higher regardless, which either means investors have decided the war is priced in or that they have not yet absorbed what a 6 percent producer price print means for corporate margins in Q3.

US wholesale inflation came in at 6 percent year-on-year in April, the hottest reading in more than three years, driven almost entirely by energy 17APW Producer prices shot up 6%, adding to pressure on companies to raise prices for customers. Gasoline soared 15.6 percent in a single month. Diesel, which powers trucking and farming, jumped 12.6 percent. The national average pump price is now $4.51 per gallon 17APW Producer prices shot up 6%, adding to pressure on companies to raise prices for customers. The International Energy Agency warned this week that global oil inventories are being depleted at a record pace, with 12.8 million barrels per day removed from supply since February 17APW Producer prices shot up 6%, adding to pressure on companies to raise prices for customers. Food prices, so far muted, face upward pressure the longer diesel costs remain elevated, because diesel powers every tractor, truck, and cargo ship in the food supply chain 17APW Producer prices shot up 6%, adding to pressure on companies to raise prices for customers. The November midterms are less than six months away, and affordability is already the dominant kitchen-table issue. One chief economist quoted Wednesday said the producer price report "will set off alarm bells at the Fed and add fuel to the political conversation about affordability" 17APW Producer prices shot up 6%, adding to pressure on companies to raise prices for customers.