Held at 0.74 ± 0.07 (from 2.2.0). The window's two halves cancel almost exactly: the diplomatic track moved meaningfully toward de-escalation (the memorandum is now pending only Trump's signature and Tehran's response to his edits - the most advanced the deal track has ever been), which on its own would justify a step down, but the price tape moved the OTHER way - WTI rose above $93 and Brent held near $95 with the energy complex keeping a structural bid - and Ghalibaf's "missiles, not talks" framing plus continuing clashes through the partial truce keep the kinetic tail live. When the deal proximity and the price action point in opposite directions, the thesis holds: the market is telling us it does not believe the reopening is durable yet. Mean and width held. Beta(25.2, 8.85) ~34 effective observations. The horizon is the shortest of the macro theses: a signed memorandum would start the durable-reopening clock within weeks; an unsigned one drags through year-end on blockade economics.

Oil prices remain structurally elevated as long as the Strait of Hormuz reopening sequence is incomplete and Iranian retaliation risk is intact. The IEA May 2026 Oil Market Report forecasts a 1.78 mb/d 2026 supply deficit, world supply falling 3.9 mb/d, Hormuz-affected Gulf output 14.4 mb/d below pre-war levels; UBS expects global inventories near all-time lows by end-May. Monday May 18 cash session settled UP on the structural read - WTI June $108.66 (+3%), Brent $112.10 (+2%), XLE 60.58 (+1.92%), XOM 160.49 (+1.63%), CVX 196.12 (+2.63%). Tuesday May 19 morning the after-hours softening EXTENDED meaningfully - WTI near $103.54 (-4.7% vs Monday close, intraday range $102.16-$103.70), Brent ~$109.33 (-2.5%). The Axios overnight reporting that the White House formally rejected Iran's 14-point proposal as "insufficient" DID NOT push oil higher - the price tape is reading the rejection as opening-of-negotiation positioning rather than imminent kinetic catalyst (Tuesday strikes already cancelled, NSC meeting is deliberation not action). Structural-supply features unchanged (IEA undersupply, 14.4 mb/d Hormuz-affected, inventories near all-time lows, Persian Gulf Strait Authority tolling regime, Sunday Barakah drone strike on UAE nuclear plant); tactical softening on the diplomatic-flow side is the operative near-term variable. Tuesday May 19 the Senate advanced a war-powers resolution 50-47 against the Iran war and Trump postponed an "an hour away" Tuesday strike after Gulf-leader appeals citing oil-infrastructure retaliation fears - the diplomatic track re-opened, not closed. Energy equities held a structural bid (XOM 162.55 +1.28%, CVX 197.25 +0.58%, XLE 61.29 +1.17%) even as crude eased into Wednesday pre-market (WTI -1.9% to $102.14, Brent -2% to $109.03) - the structural-vs-tactical split the band captures. Update May 20: the de-escalation deepened materially - WTI fell ~4% below $100 on reports of ships transiting the Strait of Hormuz and talks entering final stages, and this time the energy complex sold off WITH crude rather than holding a structural bid (XOM 156.28 -3.86%, CVX 191.33 -3.00%, XLE 59.80 -2.43%). The Hormuz-transit moves toward, but is well short of, the durable reopening the invalidation SequencedCondition requires. Update May 21: the de-escalation partially reversed - crude reclaimed $100/bbl on fading optimism over a US-Iran agreement, with the Hormuz-transit and talks-final-stages momentum stalling and the IEA structural-deficit read unchanged. Update May 22: the de-escalation re-tilted - crude eased back below $100 as a leaked "final draft" ceasefire guaranteeing Strait of Hormuz navigation revived peace optimism - though the draft is unconfirmed and unimplemented and the IEA's summer "red zone" warning leaves the structural deficit read intact. Update May 25: over the May 23-25 holiday weekend the leaked draft did NOT convert to a formal announcement - the "within hours" claim failed to materialize and weekend coverage emphasized structurally elevated crude, Brent ~85% higher YTD with calls for oil to stay high into 2027 - and Friday energy closes held a structural bid even as crude eased (XOM 154.92, CVX 191.43, XLE 59.49). Update May 26: over the holiday the US conducted fresh "self-defense" strikes near Bandar Abbas on Iranian boats laying mines in the Strait of Hormuz - reaffirming the near-term premium - even as a 60-day framework to de-mine and reopen the Strait emerged; Brent firmed +2.78% to $98.81 on the strikes while WTI fell 4.42% to $92.33 on deal optimism. The framework is the first explicit move toward the durable-Hormuz-reopening invalidation leg but is unimplemented, and Trump's battlefront threat keeps the two-sided risk live. Update May 27: the first post-holiday cash close kept the split - Brent settled +3% to $99.58 on the strikes while WTI fell ~3% to $93.89 on deal optimism - but the energy complex this time sold off WITH WTI rather than holding a structural bid (XOM 149.81 -3.30%, CVX 184.71 -3.51%, XLE 57.85 -2.76%). The "generally positive" Doha talks - ~$24B in frozen assets in play and a phased de-mining-and-reopening of Hormuz move further toward the durable-reopening leg, but the memorandum is unsigned and Iran vowed to retaliate for the strikes, so the SequencedCondition is no closer. Update May 28: the Wednesday cash close brought a sharper tactical tilt - WTI tumbled 5.55% to $88.68 and Brent fell ~5% to $94.29 on Secretary Rubio's "every chance to succeed" Iran-talks framing, with the energy complex extending its break (XOM 147.90 (-1.27%), CVX 182.40 (-1.25%), XLE 56.99 (-1.49%)) but at smaller magnitude than Tuesday. Pre-market Thursday is bouncing - oil prices climbed on fresh US-Iran reciprocal strikes amid the fragile ceasefire - and WTI $88.68 sits well above the <$80-for-30-days threshold, the framework remains unsigned, and the IEA structural-deficit / summer "red-zone" read is intact, so the SequencedCondition is no closer. Update May 29: the structural-premium read faces its largest test yet - crude completed a ~20% monthly collapse (its worst month since the COVID crash), WTI fell below $88 Friday and Brent eased to ~$92.56, after US and Iranian negotiators reached a tentative 60-day memorandum to extend the ceasefire and take steps to reopen the Strait of Hormuz and restore commercial shipping. But the MoU is unsigned - President Trump said he will make a "final determination" after a White House Situation Room meeting and demanded the Strait be "immediately open, no tolls, for unrestricted shipping" - WTI ~$88 still sits well above the <$80-for-30-days threshold, the energy complex only drifted (XOM 146.96, CVX 183.03, XLE 56.95) rather than collapsing with crude - a residual structural bid - and the IEA 1.78 mb/d deficit / summer "red-zone" read is intact, so the SequencedCondition is closer but not met. Update June 1: the tentative memorandum did NOT convert - over the weekend the US disabled a fifth commercial vessel running the Hormuz blockade with a Hellfire missile, the blockade has cost Iran ~$4.8B in oil revenue, and the ceasefire / nuclear-deal talks formally stalled with President Trump withholding approval pending uranium-enrichment terms, followed by fresh US self-defense strikes against Iran in response to what Washington called aggressive Iranian actions. The durable-Hormuz-reopening leg of the SequencedCondition moved AWAY rather than closer. The Friday energy closes kept drifting (XOM 145.26 (-1.16%), CVX 182.46 (-0.31%), XLE 56.29 (-1.16%)) and no fresh crude print is available in this window, so the price side of the structural-premium read is unconfirmed even as the geopolitical side reasserts. Update June 2: both halves of the thesis finally moved together. Iran halted indirect negotiations with Washington (protesting Israel's expanding Lebanon offensive) and its resistance front vowed to "completely block" the Strait of Hormuz and activate the Bab al-Mandeb - and the crude print that was missing in 2.1.14 landed emphatically: WTI spiked 6%+ above $92 Monday (intraday +8%), Brent surged ~5% toward $96, with the energy complex holding a structural bid (XOM 149.38 (+2.84%), CVX 185.83 (+1.85%), XLE 57.30 (+1.79%)). The two-sided risk stayed two-sided within hours: Trump announced an Israel-Hezbollah truce, said talks with Iran continue "at a rapid pace", and claimed the Strait would reopen "within the next week", paring the spike from session highs; overnight clashes continued despite the truce announcement; Tuesday crude eased (WTI back below $92, Brent ~$94) and Trump said he "couldn't care less" whether the Iran talks collapse. WTI ~$92 sits far above the <$80-for-30-days threshold and the durable-reopening leg moved away again. Update June 3: the diplomatic track reversed AGAIN - the June 1 collapse un-collapsed. A tentative memorandum (60-day ceasefire extension, Hormuz reopening and de-mining, nuclear talks) is now agreed at the negotiator level and pending President Trump's approval; Trump personally edited the draft on enriched-uranium removal and Strait-of-Hormuz terms, Tehran has not yet responded to the edited version, and Vice President Vance calls a deal "very close" but "not there yet", while Iran's chief negotiator Ghalibaf frames the talks as Iran obtaining concessions "not through talks, but through missiles" with "absolutely no trust" in US guarantees and Israel-Hezbollah clashes continue through the partial truce. The price tape refused to price the deal: WTI ROSE more than 1% Tuesday to above $93, Brent held near $95, oil is rising again Wednesday pre-market, and the energy complex kept its structural bid (XLE 57.96 (+1.15%), CVX 187.55 (+0.93%), XOM 149.56 (+0.12%)). WTI ~$93 sits far above the <$80-for-30-days threshold; a memorandum pending two signatures is not a durable reopening, and the SequencedCondition clock has not started.