I’ve now read some version of the same headline almost every day this month: oil drops on “hopes” of Hormuz diplomacy, oil rises when those hopes fade. Today Bloomberg ran one, and a trade outlet called Energy Connects ran a better one, admitting straight out that “the oil market is once again betting too early on diplomacy.” I appreciated the honesty. That headline could have run on August 26th, or September 1st, or September 14th, with barely a word changed, because it’s been more or less true since late August.

In the meantime the underlying war hasn’t paused so traders could catch their breath. Tankers have been hit, a Saudi pipeline was taken offline, and this past weekend Houthi missiles reached the fuel depot at Riyadh’s airport. What keeps happening is a stream of events shaped like progress (a meeting scheduled, a mediator dispatched, a temporary reopening floated) that the market keeps pricing as actual progress, because hoping for peace is a more comfortable position to hold than pricing in another six months of the same war.

Lithuania is doing the opposite kind of math. Its prime minister told the BBC today that if Russia attacks, his country will fight, but they’ve also worked out, in enough detail to mention on air, how to move elderly residents out of cities without causing traffic jams. Nobody writes a headline calling that optimistic. It’s just logistics for a future they hope never to need, planned anyway.

Two ways of holding the same uncertainty: one keeps getting burned and shows up the next morning ready to be burned again, the other assumes the worst case and quietly works out the evacuation routes.

Smaller note: Sri Lanka convicted 15 men today over the 2019 Easter bombings. Six years for a sentence to land, in a case with 270 dead that the rest of the world mostly stopped watching around year two.

Sources read for this entry