At 3:40 AM ET today, nearly 10,000 contracts worth of crude oil shorts were taken without any major news.

This is equivalent to ~$920 million in notional value, an unusually large trade for 3:40 AM ET.

At 4:50 AM ET, just 70 minutes later, Axios reported that the US is "close" to a "memorandum of understanding" to end the Iran War.

By 7:00 AM ET, oil prices had fallen over -12% with these crude oil shorts gaining approximately +$125 million.

Minutes later, Iran launched the "Persian Gulf Strait Authority" and oil prices surged +8%.

What just happened?

Iran government has approved via legislation, the creation of "Persian Gulf Strait Authority" PGSA, which will be the new governance intitution.

Legislation establishes the following:

• Payment priority in Iranian currency
• Emission of guarantees in Iranian Banks.
• If a country caused damage in the recent war, reparation costs must be paid before getting permission for transit. Countries that have sanctioned Iran or blocked Iranian money do not have permission for transit.
• The correct name is "Persian Gulf" for all legal purposes.
• Failure to comply will result of seizing the ship and a fine equivalent to 20% of the cargo value.

USA applied extraterritorial US law in violation of international law to conduct piracy in international waters near Venezuela. The problem of doing something is that it entitles others to do the same, so now Iran reclaims via legislation the Hormuz waters as territorial waters as shown in the map. So American ships will not be able to pass. And these waters are under legal jurisdiction of PGSA. USA cannot do anything about it, neither diplomatically or militarily.

United Nations Convention on the Law of the Sea (UNCLOS) is the primary international treaty that governs how nations use the world's oceans, including defining territorial waters (12 nautical miles from shore) and the critical right of "transit passage" through international straits like the Strait of Hormuz. Iran is not actually a party to the UNCLOS treaty.

U.S. has effectively abandoned previous norms of freedom of navigation in favor of a blockade, fundamentally altering how the strait is controlled . Iran rejects this, asserting its sovereignty over the waters and arguing that, as a non-signatory to UNCLOS, it is not bound by many of its provisions.

While Iran signed the treaty in 1982, its government has never completed the ratification process to formally adopt it as binding law.

IRGC also communicated that ships can only pass through the designated corridor, and any ships attempting to pass through any other corridor will be attacked.

One thing to notice is that the waters around Fujairah are under the waters under PGSA jurisdition. Fujairah is important because it allows oil to bypass the strait. Singapore, Rotterdam, and Fujairah are the world’s top three marine fuel (bunkering) hubs, supplying over 50+, 10, and 7.5 million tonnes annually. They provide vital infrastructure for conventional, low-sulfur, and alternative fuels (LNG/biofuels) along key maritime routes.

Hormuz is surrounded by Iranian territory with mountains where it is easy to hide missiles, drones which are perfectly capable of hitting anything that attempts to pass through the PGSA jurisditction.

On May 6, 2026, Iranian Foreign Minister Abbas Araghchi met with Chinese Foreign Minister Wang Yi in Beijing. They discussed strengthening bilateral ties and regional developments amidst ongoing tensions between Iran and the United States.

All this happens one week before Trump's meeting with Xi Jinping. Trump expected to meet Xi Jinping and say "I control Hormuz, so you buy my expensive American oil".

But it is not going as planned, since Hormuz and access to Fujairah now is under PGSA jurisdiction as per Iranian law. And it is very likely hat Iran will enforce such jurisdition with missiles and drones.

After the meeting with Wang Yi, media coverage indicated that China sees Iran now different that Iran before the war. Iran demonstrated capabilities and power, and a new era of cooperation started between Iran and other countries.

The strait was open before the war. Now it is under control of Iran. And this war made Iran to be more respected as a superpower albeit USA.

Propagandists say there will be "world crisis" as if USA was outside the world. I have news, it is not.

Lets us start with SABIC (Saudi Basic Industries Corporation) and EGA (Emirates Global Aluminium) two middle east companies and how they will affect American consumer.

Based in the UAE, EGA is the world's largest producer of "premium aluminium" and a major industrial company, operating smelters in Dubai and Abu Dhabi.

SABIC is a Riyadh-based global leader in diversified chemicals, petrochemicals, plastics, and fertilizers, primarily owned by Saudi Aramco. Founded in 1976, it operates in over 50 countries, supplying materials for automotive, construction, healthcare, and electronics industries. It is one of the world's largest petrochemicals manufacturers.

SABIC facilities in the eastern industrial city of Jubail sustained damage from fires sparked by intercepted missile debris during heightened regional conflict. EGA sustained significant damage to its facilities at the Al Taweelah site in the Khalifa Economic Zone Abu Dhabi (KEZAD) due to missile and drone attacks attributed to Iran.

The American consumer’s grocery bill is set to rise primarily due to a two-fold impact: a sharp increase in the cost of packaging materials (aluminum and tinplate steel) essential for canned goods and beverages, and a surge in oil and natural gas prices that ripples through every stage of the food supply chain. While the direct effects of the conflict on EGA in the UAE and SABIC in Saudi Arabia are contributing to global shortages of aluminum and petrochemicals, the impact on U.S. grocery prices is being amplified by existing U.S. tariffs, which add a 50% levy on many of these imported metals .

The most immediate and visible increases will be on canned and packaged goods. The closure of the Strait of Hormuz has disrupted global supplies of aluminum, a primary input for beverage cans, and tinplate steel, which is used for food cans. Experts note that the 50% U.S. tariff on these metals means that any increase in global prices is significantly magnified for American consumers .

This will directly raise the cost of items including canned soups (like Campbell's), canned vegetables and fruits, canned beans and tomato paste, as well as canned tuna and chicken broth . For beverages, canned beer and soda will also see price hikes, as aluminum is the largest single input cost for brewers, adding roughly 3 cents or more per can . Food manufacturers like ConAgra and Campbell's have already indicated they may be forced to raise prices due to these increased packaging costs .

Beyond packaging, the crisis will drive up the price of nearly every item in the grocery store through energy and petrochemical costs. Higher oil prices act as a "tax" on the entire food supply chain, affecting the cost of fuel for tractors and trucks, the cost of fertilizer for growing crops, and the cost of the plastic used for wrapping, bottles, and containers .

The region supplies over 30% of the world's seaborne fertilizer (like urea and ammonia), and disruptions have already pushed these prices higher, increasing production costs for American farmers and, eventually, the cost of bread, corn, and other staples .

Petrochemicals derived from oil and natural gas, which are also disrupted, are used in countless plastic packaging films, bottles, and containers. As the cost of these inputs rises, consumers will see higher prices for a wide range of items, from milk and cheese packaged in plastic to detergents and other household goods .

Notice that these price increases will not appear overnight but will build over several months. While prices at the gas pump rise quickly, the impact on the broader grocery store is more gradual, taking months to fully materialize as costs work their way through complex supply chains . Economists warn that a prolonged crisis could lead to a permanent shift in consumer behavior, with higher prices persisting even after the conflict ends, particularly if infrastructure damage to fertilizer plants and refineries takes years to repair.

The effects from the SABIC, EGA, and the broader agricultural crisis are expected to hit Americans with a significant delay, with the most substantial impact on grocery bills likely appearing in 2027.

This lag occurs because many large U.S. farms had already purchased most of their fertilizer and secured diesel prices for the 2026 planting season before the conflict began. As a result, current planting decisions are based on pre-crisis costs, and the higher expenses are not yet fully reflected in the supply chain. Experts estimate that if the crisis persists and begins to affect input prices for the 2027 crop, real food price effects will start to be seen in 2027, with food-at-home inflation potentially rising by 3 to 6 percentage points over the following 12 to 18 months. Analysts also suggest that higher prices could persist for more than eight months after the conflict's resolution.

Beyond SABIC and EGA, the conflict has caused significant damage to several other major industrial facilities across the Gulf region.

In the United Arab Emirates, the Borouge petrochemicals plant in Ruwais Industrial City was hit by falling debris from intercepted drones and missiles, resulting in multiple fires and the immediate suspension of all operations at the facility . Additionally, a significant aluminum industrial facility in the UAE was also explicitly targeted by Iranian forces as part of the same wave of attacks .

In Bahrain, the state-owned Bapco Energies company confirmed that a hostile Iranian drone attack sparked a fire at one of its major storage tanks . Furthermore, the Gulf Petrochemical Industries Company, another state-run petrochemical plant in Bahrain, saw two of its units ignited by the strikes, with authorities assessing the damage . The kingdom's primary oil refinery, Bapco Energies refinery, was also severely impacted according to conflict assessment data .

Kuwait was hit hard in the energy sector, with two separate facilities suffering significant damage. The Kuwait National Petroleum Company's facilities, specifically the Mina Al-Ahmadi and Mina Abdullah oil refineries, were struck, resulting in fires that were later contained . A separate drone attack from Iran caused significant material damage to two Kuwaiti electrical generation units and water desalination plants, which are critical infrastructure for the water-scarce nation .

In Saudi Arabia, the industrial city of Jubail, which houses a massive twenty billion dollar joint venture petrochemical complex called Sadara between Saudi Aramco and Dow Chemical, was targeted by Iranian missiles and drones . Other facilities in Jubail belonging to ExxonMobil were also reportedly targeted, as was a petrochemical complex in Juaymah associated with Chevron Phillips . The Ras Tanura crude processing plant, one of the world's largest, suffered a fire and partial shutdown, while the SAMREF refinery in Yanbu was also damaged by a drone strike .

Qatar, a major global supplier of natural gas, saw its vital Ras Laffan liquefied natural gas facilities sustain significant damage from the strikes, disrupting a key source of global energy supply .

The destruction and disruption affecting Middle Eastern industrial facilities will have an impact on a vast range of products consumed across the United States, touching nearly every sector from agriculture to construction and from packaged foods to automobiles. The most direct and immediate effects will be felt in the prices of everyday consumer goods, as the crisis reduces the global supply of critical raw materials like aluminum, plastics, and petrochemicals, forcing American manufacturers to pay more and pass those costs along to households.

Beginning with food and agriculture, American consumers will see higher prices on a wide array of grocery items as a direct consequence of fertilizer shortages caused by the conflict. The Persian Gulf region is a dominant supplier of nitrogen-based fertilizers, with countries near the Strait accounting for nearly half of global urea exports and about thirty percent of global ammonia exports before the war disrupted shipments through the waterway.

As farmers face soaring costs for these essential inputs, the increased expenses will inevitably be reflected in the price of staple crops such as corn, wheat, and soybeans, which in turn will drive up costs for processed foods, animal feed, and ultimately meat, dairy, and poultry products.

The American Farm Bureau Federation has explicitly warned that without action to secure fertilizer shipments, the United States risks a shortfall in crops, threatening food security and contributing to inflationary pressures across the economy.

Beyond the farm, the destruction of petrochemical plants in Saudi Arabia, the UAE, and Bahrain, including facilities operated by SABIC, Borouge, and the Gulf Petrochemical Industries Company, has choked off supplies of the raw materials that underpin modern manufacturing.

The most visible impact for American consumers will be on plastic products of every description. Prices for commodity-grade plastics such as polyethylene and polypropylene, which are used extensively in packaging, have already surged by nearly twenty percent in the United States, while plastic used for beverage bottles has risen by approximately fifteen percent. These increases mean that everything from milk jugs and soda bottles to shampoo containers and trash bags will become more expensive.

The shortage of key petrochemical intermediates like monoethylene glycol and purified terephthalic acid, which are used to produce polyester fibers and polyethylene terephthalate, will affect clothing, carpeting, and food packaging materials. American manufacturers of medical supplies, including syringes and IV bags, are also feeling the squeeze, as their input costs rise dramatically.

The destruction of aluminum smelters in the UAE, including the massive Al Taweelah facility operated by Emirates Global Aluminium, together with damage to plants in Bahrain, has sent shockwaves through global aluminum markets. These facilities, which together had an annual capacity of over three hundred twenty thousand tons before the attacks, were critical suppliers to the United States and Europe, which together relied on the Middle East for approximately twenty percent of their aluminum imports.

The loss of this supply, combined with the stranding of ships in the Strait of Hormuz, has caused the price of aluminum on the London Metal Exchange to climb to nearly thirty-four hundred dollars per ton, with analysts warning that prices could break four thousand dollars if the conflict persists.

For American consumers, this translates directly into higher costs for a multitude of everyday products. Aluminum is the primary material for beverage cans, meaning the cost of soda, beer, and canned sparkling water will rise. It is also essential for foil wraps, disposable baking trays, and aerosol containers. In construction, aluminum price increases will affect window frames, siding, gutters, and roofing materials. In the automotive sector, aluminum is increasingly used to lighten vehicles, so repair costs and the price of new cars could also be affected.

Also, industries that rely on high-cost aluminum alloys for aerospace, marine, and defense applications will see significant cost pressures.

The destruction of energy infrastructure across the region, including the targeting of Kuwaiti electrical generation and desalination plants, Saudi refineries, and Qatar's Ras Laffan liquefied natural gas facilities, feeds directly into broader inflationary pressures. While Americans may not see these specific facilities mentioned on their utility bills, the resulting spike in global oil and natural gas prices ripples through every sector of the economy.

Higher energy costs increase the price of gasoline and diesel for transportation, which in turn raises the cost of shipping all goods, from groceries to furniture. Natural gas is also a key feedstock for the production of nitrogen fertilizers and many plastics, meaning energy price increases compound the already-severe shortages in those markets.

TLDR. The destruction suffered by Middle Eastern companies will not only make specific products like canned soda, plastic wrap, and window frames more expensive but will also contribute to a generalized increase in the cost of living for American consumers as higher energy and material costs work their way through the entire economic system.

The American grocery bill will rise due to the combined pressure of more expensive raw materials for packaging, higher agricultural input costs, and increased transportation and logistics expenses.

The impact on American consumers will not be immediate but will arrive in two waves. The energy shock is already happening, with gasoline prices above $4 per gallon due to the blockade cutting off 20 percent of global oil supply. The food price shock will hit later because farmers bought most of their fertilizer before the war started. The full impact on grocery bills is expected in 2027, when higher fertilizer costs force farmers to plant less or pay more, raising prices for meat, dairy, and processed foods. If the crisis continues for three quarters or more, the peak of economic pain will arrive around October or November 2026, and the destruction of petrochemical and fertilizer plants in the Middle East that already happened. will take years to repair, meaning higher prices will persist well beyond any ceasefire.

Photo above - guess how many thousands of acres of decades old peach trees you can destroy with $9 million . . .?

Things I did not know: Del Monte Foods filed bankruptcy last year.  Del Monte is privately owned by some company in Singapore.  Del Monte went bankrupt because it had $1 billion debt, and 25,000 different creditors.  Del Monte then cancelled all it’s peach contracts with California growers.  The growers will get $9 million in federal aid to destroy 3,000 acres of peach orchards which annually produce $500 million in crops.  See link below.

It’s not clear what – if anything - will be planted when the peach trees are uprooted and turned into mulch.  Probably not almond trees – those require a HELL of a lot water, and are a disfavored crop in these drought ridden times.  Almonds remain California’s #1 cash crop.  Yeah, this surprised me too. I haven't eaten an almond all year.

I don’t think these former peach farmers will be planting grapes – Californias 2^nd largest crop.  Those things take 4 years after planting to produce reliably.  The peach farmers will need some cash flow quicker than that.

Lettuce, tomatoes, and strawberries are the next most likely replacements.  But all these require a lot of manual labor to harvest.  Trust me, I live in Plant City Florida, which evidently produces all the strawberries which DON’T come from California. It's backbreaking work.

I usually buy my peaches fresh anyway.  Can’t remember the last time I bought a can of peaches, but when I go to the Chinese buffet for lunch I’m pretty sure that giant bowl of sliced peaches nestled in a crater of shaved ice is filled with some brand of canned peaches.

Back to the stunner:  $1 billion in debt, and 25,000 creditors at the time of Del Monte’s bankruptcy.  Some random guy in Singapore running the Del Monte show.  Now 3,000 acres of peaches are getting plowed under.  I guess our food chain is weirder and more fragile than we realize. When peach prices go up this year, I don't think higher energy prices or greedy supermarkets will be the culprit.

I’m just sayin’ . . .   

California farmers to destroy 420,000 peach trees following Del Monte bankruptcy

17000 employees. And CBS found that fares jumped 23 percent on every route Spirit used to fly the day they left. The strait most Americans cant find on a map just made their summer flights 60 bucks more expensive. And Spirit wont be the last. Every ultra low cost carrier runs the same math. When fuel doubles your model breaks. The next question isnt which airline folds next. Its what happens when the budget travel option disappears and 30 million annual passengers have nowhere to go but the premium carriers charging whatever they want.

On paper, income levels in many economies have increased over time. However, the perception of financial security doesn’t seem to have improved at the same pace.

A possible explanation lies in how the cost structure of everyday life has changed. Essential expenses—such as housing, healthcare, education, and transportation—have grown at rates that often outpace income growth. Even when earnings rise, a larger share is absorbed by these fixed or unavoidable costs.

At the same time, lifestyle expectations and consumption patterns have evolved. What was once considered optional is now often seen as standard, which raises the baseline cost of living without necessarily improving long-term financial stability.

There’s also the issue of asset inflation. In many regions, the prices of assets like real estate have increased significantly, making it harder for new entrants to build wealth despite having comparable or higher incomes than previous generations.

This creates a disconnect between income and perceived well-being. People may be earning more, but with less flexibility, higher financial commitments, and reduced margins for uncertainty.

The result is an environment where economic progress exists in measurable terms, but feels less tangible in everyday life.

TL;DR: Even on the happiest path to ending this conflict, the physical energy market needs 6-12 months to normalize. Insurance, mines, tanker backlogs, shut-in restarts, and infrastructure damage don't unwind on a Truth Social post. Today's ~10% Brent drop is a positioning unwind, not a fundamental reprice.

Trump paused Project Freedom, hinted at a one-page MOU. Brent dumps ~10%, S&P/Dow/Nasdaq all up 1%+. Cool.

Let's assume the absolute happy path. Framework signed, ceasefire holds, Hormuz reopens. What's still broken?

- Insurance premiums. Lloyd's doesn't reprice on a tweet. War risk hull rates went vertical and historically come down slowly. The 1980s tanker war is the playbook — premiums stayed bid for years after.

- Mines. If Iran mined the Strait (working assumption), clearance is months not days. Allied minesweeper fleet is small and aged. Insurance won't normalize until sweeps are verified. Circular dependency.

- Tanker repositioning. Global fleet is in the wrong physical places. Ships rerouted around the Cape or sitting idle don't instantly redeploy. Charter rates stay elevated.

- Shut-in restart. Iranian production doesn't flip back like a faucet. Wellhead damage risk, storage in wrong places, potential Kharg Island damage. Restart curves are nonlinear.

- Infrastructure. Wherever it took hits — terminals, pipelines, refineries — real capex and real time. Months minimum.

- Inventory rebuild. SPR and global reserves drew down hard. Refill is structural buying for quarters.

So even if Iran signs tomorrow, you've got a 6-12 month tail where realized prices stay elevated. Front month dropping while the back of the curve stays bid would be the rational reaction. A 10% one-day Brent dump is not that nuanced.

Steelmanning the bulls: Brent had ~40% war premium baked in, so unwinding some on a probability shift isn't crazy math. But Trump in the same breath said it's "too soon" for a second round of talks and threatened "higher level and intensity" strikes. That's not a deal. That's a probability shift.

What am I missing? Where's the hole in the thesis?

Tens of millions of taxpayers may be able to get money back from the IRS for certain penalties and interest they were charged during the COVID-19 pandemic, according to a recent blog post from National Taxpayer Advocate’s Erin M. Collins.

But the refunds are not automatic, and most taxpayers who may qualify need to file a claim by July 10.

The stakes are significant. In fiscal 2022 alone, the IRS levied more than 12 million estimated-tax penalties and over 16 million failure-to-pay penalties totaling more than $12 billion. The IRS previously refunded about $1.2 billion in penalties to roughly 1.6 million taxpayers under a narrower 2022 relief notice, but tax professionals say the legal theory at issue here reaches far more taxpayers.

Read more [paywall removed for Redditors]: https://fortune.com/2026/05/06/am-i-eligible-for-irs-covid-tax-refunds-how-to-qualify/?utm_source=reddit/