ISRAEL IS BREAKING THE DEAL IN SLOW MOTION, AND WASHINGTON IS RUNNING OUT OF WAYS TO PAPER OVER IT

• Congress passed a concurrent war powers resolution for the first time since the 1973 War Powers Resolution itself. The Senate voted 50-48, with four Republicans crossing: Rand Paul, Lisa Murkowski, Susan Collins, and Bill Cassidy 7AJE US Senate approves Iran war powers resolution: What that means for Trump 11BBC Congress passes war powers measure for first time, rebuking Trump's war with Iran. The resolution is legally symbolic because the White House argues the April ceasefire reset the 60-day clock, and because it requires a presidential signature to carry force of law, which it will not get 11BBC Congress passes war powers measure for first time, rebuking Trump's war with Iran. But it is the clearest signal yet that Trump's Republican majority is cracking on the Iran war, with midterms in November. A Reuters/Ipsos poll released the same day found only 24% of Americans think the war was worth the cost 7AJE US Senate approves Iran war powers resolution: What that means for Trump. That number, not the vote count, is what should worry the White House.

• Iran has formally refused IAEA access to its damaged nuclear sites. Deputy Foreign Minister Kazem Gharibabadi stated publicly that no meeting with IAEA Director General Rafael Grossi took place in Switzerland despite his request, and that access to damaged nuclear sites "will only be examined and decided within the framework of a final agreement and as a result of practical action by the other side to terminate all sanctions" 6MHR Iran rejects IAEA access to damaged nuclear sites. This is a harder position than yesterday's denial. Tehran is now explicitly conditioning any nuclear inspections on full sanctions removal first. That is the opposite sequence from what the US is describing as the deal's logic.

• Iran is moving fast on the 60-day sanctions waiver window. Iranian Oil Minister Mohsen Paknejad arrived in India for a BRICS energy ministers summit and confirmed Iran is actively seeking to expand oil trade with Indian refiners under the temporary US Treasury general licence 5PTV Iran, India rekindle energy partnership amid US sanctions waiver. India was Iran's second-largest crude buyer before 2019 sanctions and already received its first Iranian shipments in seven years in April. The National Iranian Oil Company (NIOC) has been contacting Indian refineries directly. Tehran clearly intends to rebuild as much commercial infrastructure as possible before the waiver expires on August 21, giving it economic leverage regardless of what the nuclear talks produce.

• A CNN exclusive describes an Iranian drone swarm capability that rattled US intelligence. A rescued F-15 pilot described seeing multiple drones "moving as one" in a jellyfish formation before being shot down over Iran in April, with smaller drones hanging below larger ones like tentacles 14CNN Exclusive: Downed US pilot reported seeing Iranian drones swarm in ‘jellyfish’ formation. US intelligence officials debriefing him were reportedly sceptical, partly because he was concussed and had previously been shot down in a friendly fire incident. But the account triggered internal debate that has not been resolved 14CNN Exclusive: Downed US pilot reported seeing Iranian drones swarm in ‘jellyfish’ formation. This is a single-source CNN story based on four anonymous officials, so treat it with appropriate caution. If it is accurate, it suggests Iran field-tested a coordinated drone swarming capability during active combat with US forces, which is a significant intelligence gap, and one that becomes relevant if the 60-day talks collapse and hostilities resume.

• Saudi Arabia and Iran's foreign ministers spoke by phone Tuesday, coordinating on the peace talks. The call follows the Bürgenstock outcomes and signals that Riyadh, which restored diplomatic ties with Tehran in 2023, is actively working to keep regional diplomatic momentum alive 2MHR Iranian, Saudi FMs discuss peace talks progress. Saudi Crown Prince Mohammed bin Salman had already welcomed the MoU in a call with Pakistan's prime minister. This matters because Gulf state anxiety about the deal has been a persistent drag on its regional legitimacy. Saudi engagement is the most stabilising signal available from that bloc right now, even if the UAE, Kuwait, and Bahrain remain more sceptical.

Oil fell sharply again. Brent dropped from $76.88 to $73.29 and WTI from $73.05 to $70.03, the lowest levels since well before the war [[market data]]. The Oil Volatility Index (OVX) ticked up to 48.02 from 46.60, a small move that suggests the market noticed the Lebanon deterioration but is not yet pricing a breakdown. The direction of travel on oil is still downward, driven by the sanctions waiver and Hormuz reopening.

The more interesting signal is in precious metals. Gold fell from $4,129 to $3,995, its first move below $4,000 in months. Silver and copper are both down. That looks like risk appetite returning. But the Gold/Oil ratio is still at 57.05, meaning gold is still historically elevated relative to oil, which says geopolitical uncertainty has not fully unwound. Defence stocks are drifting lower across the board: Lockheed Martin, Northrop Grumman, and BAE Systems are all off their May peaks. The market is pricing a war winding down, not a war restarting. Whether that is correct depends almost entirely on what happens in Lebanon over the next two weeks.

The pump price relief is feeding through. RBOB gasoline futures fell again to $2.784, down nearly 17% from a month ago. Heating oil is down 18% over the same period. European households should be seeing meaningful energy cost reductions at the retail level within weeks if current futures hold.

The political counterweight is the Pentagon's $80 billion war funding request now being formally walked around Capitol Hill 11BBC Congress passes war powers measure for first time, rebuking Trump's war with Iran 13APW Pentagon seeks $80 billion from Congress for Iran war, today’s primaries, Trump’s Reflecting Pool renovation. Americans are getting cheaper fuel and simultaneously being asked to fund the conflict that caused the price spike. The war powers resolution vote, however symbolic, reflects the political difficulty of that combination heading into November midterms. For European governments watching US political cohesion on the deal, a White House increasingly on the defensive domestically is a less reliable guarantor of the MoU's terms.