# Regarding Today

#Oil and Global Liquidity: Thoughts on Middle East Variables

On the surface these past two days, things seem to be easing, and oil prices are falling back. But underlying risks are actually accumulating.

On one hand, negotiation rhetoric is being put out there, but it looks more like buying time. Both the US and China have been conducting evacuation operations this week—this kind of thing doesn't happen just because "the situation is improving."

On the other hand, military preparations haven't stopped. US troop reinforcements are ongoing and being planned for worse-case scenarios.

Looking at Iran's statement today, saying it won't affect non-belligerent transit, it sounds like de-escalation. But actually it leaves room for flexibility. Once the situation escalates, major oil-producing states in the Gulf can easily be redefined as "belligerents." In other words, this signal itself indicates that the Strait's initiative is in Iran's hands.

If viewing this pessimistically, the window of opportunity is only one week, possibly even shorter.