TWO NIGHTS OF FIRE, ONE DOCUMENT HOLDING BY A THREAD

• The IRGC has explicitly threatened to withdraw from nuclear negotiations. Its Sunday statement warned that "violating the ceasefire constitutes a breach of Clause One of the Islamabad understanding and will result in the complete suspension of all related processes" 1TTM Iran to respond more forcefully to MoU violations after 2nd night of fire exchange with US. That is not just rhetoric about the Hormuz dispute. It is a direct threat to walk away from the nuclear working group, the 60-day sanctions waiver, the asset unfreezing, and everything else the MOU set in motion. The IRGC is telling Washington that the price of the southern corridor is the entire diplomatic architecture.

• Congress passed a war powers resolution demanding Trump seek approval or halt operations, and he struck Iran again anyway. The Senate passed the resolution 50-48 on Tuesday, with four Republicans crossing the aisle 6AJE US strikes Iran for second day: Is it a violation of war powers resolution?. The House passed a companion measure on June 3. Democratic Representative Ro Khanna called the weekend strikes "a blatant violation" and threatened to take Trump to court 6AJE US strikes Iran for second day: Is it a violation of war powers resolution?. Legal experts quoted by Al Jazeera note the resolution is technically nonbinding, meaning Trump can ignore it and probably will, but the political cost accumulates with every strike he orders without congressional sanction 6AJE US strikes Iran for second day: Is it a violation of war powers resolution?.

• Iraq carried out sweeping pre-dawn raids on its own Green Zone, arresting over two dozen politicians and officials on corruption charges 8CRD Iraqi forces storm Green Zone, arrest politicians in 'anti-corruption' crackdown: Report. The operation involved the Counter-Terrorism Service, the Iraqi Army, and the Integrity Commission, hitting targets in Baghdad and multiple provinces. Among those arrested: the Deputy Oil Minister for Refining Affairs and several members of parliament 8CRD Iraqi forces storm Green Zone, arrest politicians in 'anti-corruption' crackdown: Report. A Popular Mobilization Units (PMU) leader said the campaign would continue until Prime Minister Ali al-Zaidi's planned July 17 Washington visit 8CRD Iraqi forces storm Green Zone, arrest politicians in 'anti-corruption' crackdown: Report. Read this in context: Zaidi was installed with Trump's blessing after Washington vetoed Nouri al-Maliki, and the arrests disproportionately appear to target Iran-aligned political figures. Whether this is genuine anti-corruption enforcement or a US-backed political cleanse ahead of the Washington visit is a question the available sources raise but cannot resolve. Either way, Iraq's domestic politics are shifting fast, and not in Tehran's favour.

• Israel's first fatality since the Lebanon framework was signed occurred within 24 hours of the ink drying. Captain David Hazutt, 21, a platoon commander in the Golani Brigade, was killed in a clash with a Hezbollah gunman in the village of Deir Siryan 7TOI IDF officer killed in clash with Hezbollah gunman in south Lebanon. Hezbollah leader Naim Kassem said the group would keep fighting until Israel leaves Lebanon, and Hezbollah's parliamentary bloc is already warning of internal Lebanese conflict over the deal 5GDN Donald Trump threatens to annihilate Iran after crossfire over Hormuz, Middle East crisis live 15APW Lebanon-Israel deal requires Hezbollah's disarmament. The framework links Israeli withdrawal to Hezbollah's full disarmament, which Hezbollah has explicitly rejected. Netanyahu says Israel will stay "until Hezbollah and the rest of the terrorist organizations are disarmed" 13TOI PM: Iran, Hezbollah to have ‘no role in Lebanon’ under deal, Israel can maintain security zone 15APW Lebanon-Israel deal requires Hezbollah's disarmament. Those two positions do not overlap.

• Secretary of State Marco Rubio acknowledged Gulf states have "very concrete concerns" about Iranian proxy activity that the MOU does not address 10GDN Gulf shares concerns with US as Iran’s influence and power continue by proxy. Analysts cited by the Guardian say Iran is likely to increase, not decrease, support for Hezbollah, Iraqi militias, and the Houthis after the conflict, having confirmed that its strategic framework survived a direct US-Israeli assault 10GDN Gulf shares concerns with US as Iran’s influence and power continue by proxy. The Gulf states signed up to regional security arrangements that assumed a weakened Iran. What they are getting is an Iran that is militarily damaged but strategically emboldened and still actively projecting power through proxies.

Oil fell again, which at this point is the market's most reliable tell. Brent dropped from $75.00 to $72.60 over the past two sessions despite confirmed tanker strikes, missile attacks on two Gulf capitals, and Trump threatening Iran's existence [[market data]]. The Oil Volatility Index (OVX) also fell slightly to 46.46 [[market data]]. Markets are still pricing the MOU as structurally intact, which may be rational or may be dangerously behind the news cycle.

The number that stands out is Frontline, the tanker operator, which has now dropped from $40.93 on June 19 to $35.52, a 13% fall in 10 days [[market data]]. The broader shipping index is barely down. Someone is pricing tanker-specific risk into that stock, and they are doing it consistently and directionally. Watch whether Frontline continues to fall while crude holds: that would signal the market believes oil will flow but tanker operators will take the pain of insurance repricing and route disruption.

Gold ticked up again to $4,096, and the Gold/Oil ratio hit 59.17, the highest in this dataset [[market data]]. The Israeli TA-125 index has dropped from 4,432 in late May to 3,968 [[market data]]. Quiet money is still hedging. It is not panicking. But it is not unwinding either.

The war powers fight in Congress is now directly colliding with live military operations. Trump ordered strikes on Iran on Saturday and Sunday after the Senate had already told him he needs congressional approval. Democratic lawmakers are threatening legal action 6AJE US strikes Iran for second day: Is it a violation of war powers resolution?. Republican leadership is holding the coalition together senator by senator, which is not a sustainable management strategy heading into autumn. The political cost of each additional strike without authorisation is not zero, and it is compounding.

On energy: wholesale crude prices are now below pre-war levels, but retail pump prices remain significantly elevated due to refining and distribution lag. The Kiku tanker strike adds a new transmission mechanism: if Gulf maritime insurers begin repricing war risk premiums for Hormuz transits this week, that cost eventually reaches the pump even if Brent stays below $75. Watch for Lloyd's of London market commentary in the next 48 hours.