The Liberal Media Is Finally Noticing Democrats Are Willing To Shred The Rule Of Law
Democrats have anointed themselves the defenders of democracy and protectors of the rule of law. For years, the liberal media has been more than willing to help push that narrative. But after the state Supreme Court struck down the Virginia gerrymander, the reaction from Democrats was so extreme that even their usual defenders couldn’t ignore how bad it looked.
On Sunday, the New York Times reported that House Minority Leader Hakeem Jeffries and Virginia Democrats held a conference call the day after the Virginia Supreme Court ruled that the party had violated the state constitution by passing its gerrymandered map, nullifying the new map before it could be implemented. According to the report, lawmakers spent the call “venting anger at their defeat,” with the atmosphere described as “desperation and fury,” and Democrats floated the idea of lowering the mandatory retirement age of the court so they could replace all the justices and restart the process of passing their gerrymandered map.
Even some of the liberal media’s old guard felt uncomfortable that such an idea was seriously considered, and what that says about the party that claims to be defenders of Democracy and the rule of law.
That’s the unmistakable takeaway from a revealing exchange between Chris Cillizza and Chuck Todd on Monday on Cillizza’s podcast.
Chuck Todd framed the Virginia ruling as the natural consequence of bad politics and worse arrogance. “That’s how I feel about this, this ruling in Virginia, right? This was a bad idea. This was terrible messaging. This was defeat. This sort of undermined every supposed principle that the Democratic Party had been running on for over a decade,” he said.
The deeper problem, as Todd and Cillizza both made clear, is that Democrats did this to themselves. “And, you know, and they didn’t dot their I’s and cross their T’s,” Todd said, acknowledging reports that Democrats in Virginia knew their plan wasn’t constitutional but pressed forward with it anyway.
“The Democratic state legislature told the Virginia State Supreme Court, ‘Do not offer a ruling on this until after the election,’” Cillizza noted. In other words, they knew exactly what they were doing. They were trying to run the clock and hope the courts would stay out of the way until after the votes were cast, and there was nothing that could be done about it.
Todd then referenced the New York Times report about the plan to lower the retirement age for Supreme Court justices to 54, which he used as another example of Democrats careening away from any serious commitment to institutional norms.
“And you’re sitting there going, ‘Wow.’ And you’re the same party that’s been complaining that Donald Trump doesn’t respect, um, the democracy? Doesn’t respect the will of the voters, doesn’t respect institutions.”
“How about rule of law?” Cillizza added.
The narrative from Democrats for years has been about protecting democracy, defending norms, and standing up for institutions. But when their own power is on the line, that lofty rhetoric suddenly turns into just another set of talking points. Todd even admitted the entire episode looked insane from the outside.
The most damning part came when Todd explained what he thinks the Democratic Party is willing to do.
“The left has become… as bad as Trump,” he said.
“I mean, look, go ahead and do it, but don’t be surprised when voters sort of decide, man, you guys are full of shit too. And you guys aren’t serious about the democracy. You just are trying to rig it in your direction.”
Todd also argued that the Democratic Party’s refusal to admit error makes the problem worse.
“The Democratic Party is not going to accept the premise that, ‘You know what? Maybe we were principally wrong about this, and maybe we should have stuck to the high ground,’” he said. Instead, he warned, they want to be “just as radical and just as, uh, anti-democracy as they accuse the other side of being.”
I was amazed/appalled by how quickly Dems screamed “RIGGED” and called for the impeachment/removal of the Virginia state Supreme Court on Friday.
That is the part that should worry Democrats the most.
When even their media allies are describing their behavior as anti-democratic, anti-institutional, and openly cynical, it’s a huge problem for them. The party that spent years sermonizing about norms is now getting caught pushing banana republic tactics and calling it righteousness.
The Central Intelligence Agency and Mexico are criticizing CNN for spreading false information after the news outlet published a report – citing anonymous sources – claiming that CIA operatives had directly participated in targeted killings as part of the U.S. intelligence agency’s alleged “secret war” against cartel members in Mexico.
The report, published on May 12, alleged that CIA Ground Branch officers had been present at or involved in targeted assassinations on mostly mid-level cartel members over the past year, including a March 28 vehicle explosion on a congested highway in Tecámac, in the State of Mexico just outside Mexico City, that killed Francisco Beltrán—known as “El Payín”—an alleged Sinaloa Cartel member, and his driver.
“This is false and salacious reporting that serves as nothing more than a PR campaign for the cartels and puts American lives at risk,” CIA spokeswoman Liz Lyons said in a statement on X.
Mexican Security Secretary Omar García Harfuch also rejected the report.
“The Government of Mexico categorically rejects any version that seeks to normalize, justify or suggest the existence of lethal, covert or unilateral operations by foreign agencies on national territory,” he wrote on X. “Any international cooperation is limited to the exchange of information, institutional coordination and formal mechanisms established by the Government of Mexico.”
CNN and the U.S. Department of Homeland Security did not immediately return a request for comment.
The State of Mexico Attorney General’s Office has also issued a statement that “firmly rejects” any of its members telling journalists that an explosive device had been planted inside Beltrán’s vehicle, contradicting CNN’s reporting.
“An explosive device had been hidden inside the vehicle, the State of Mexico’s Attorney General told CNN,” the contested report reads.
The office said its inquiry into the two deaths remains active and that investigators had yet to establish a cause.
Tuesday’s dispute follows weeks of compounding friction between Washington and Mexico City over efforts in Mexico to address cartel crimes.
On April 19, two U.S. Embassy employees died in a car crash in Chihuahua state, along with two Mexican state officials. Chihuahua Attorney General César Jáuregui Moreno said the four officials were on their way back from an operation targeting drug laboratories in the municipality of Morelos when the incident occurred.
The two U.S. Embassy employees were later reported by The Associated Press to be CIA agents collaborating with Chihuahua officials—claims the White House did not deny.
The White House on April 22 said that U.S. President Donald Trump was dissatisfied with Mexico’s official response to the incident. Mexican President Claudia Sheinbaum had said that no agents from any U.S. government institution may operate in Mexico without approval from Mexico’s federal government, implying that the operation with local officials in Chihuahua state had not been given the green light by Mexico City.
Also in April, the Department of Justice indicted Sinaloa Governor Rubén Rocha Moya and nine current and former Sinaloa officials on drug trafficking and weapons charges, a development that has further strained the relationship between Washington and Mexico City.
The U.S. Treasury Department separately imposed sanctions on an international narcotics distribution network linked to the Sinaloa Cartel.
Iran Claims 80% Of Bombed-Out Areas Of Tehran Restored, Amid $270BN War Loss Compensation Demand
Iran has been seeking to prove its unity and defiance to the world in the aftermath of the 38-days of heavy US-Israeli bombing it endured throughout the Trump-ordered Operation Epic Fury.
Along with fast seeking to rearm and recover its missile capability after the bombardment which heavily targeted above and below-ground missile silos, it is also rapidly rebuilding bombed-out parts of the capital city Tehran.
In what sounds like a surprising and perhaps high estimate, about 80% of war-damaged sites in Iran’s capital have been repaired, the state Islamic Republic of Iran Broadcasting (IRIB) reports.
“More than 60,000 residential and commercial units in Tehran province were hit by American-Zionist attacks during the third imposed war,” Deputy Governor of Tehran Seyyed Kamaleddin Mirjafarian was quoted in the report as saying.
The 80% claim might be met with a lot of scrutiny and doubt, given that many neighborhoods and buildings seemed to suffer damage so immense in scale, that it should take at least months if not years to rebuild.
But there has been some clear evidence that Iranian construction teams and engineers have worked around the clock to repair and replace vital infrastructure, like bridges for example.
The US and Israel had struck bridges and rail lines to cripple Iran’s national transport network. Israel especially adopted attacks against key civilian infrastructure as a battle tactic, in hopes that eventually there would be a groundswell of anti-Tehran anger domestically, leading to government overthrow.
Also, “ports and railway networks, universities and research centers, and several power plants and water desalination plants were directly hit, while a large number of hospitals, schools and civilian homes were also damaged or destroyed,” Al Jazeera describes.
By mid-April, Iran had put a price on the damage, while demanding compensation from Washington:
Iran has also raised the idea of compensation for damages to come through a Strait of Hormuz protocol, which would include a tax on ships passing through the waterway.
An early estimate indicates that Iran has suffered about $270bn in direct and indirect damages since the start of the US-Israel war on February 28, Iranian government spokeswoman Fatemeh Mohajerani said during an interview with Russia’s RIA Novosti news agency, published on Tuesday.
She did not provide further information, such as a breakdown of the damages, but said the issue of compensation was discussed in last week’s negotiations between Tehran and Washington in Pakistan, and will be raised in any potential future talks with the US and mediators.
President Trump himself repeatedly threatening to bomb bridges, power plants, and other infrastructure to send Iran “back to the Stone Age.” He’s reportedly mulling the resumption of full military operations, amid stalled or non-existent peace talks.
Tehran municipality repairs over 40,000 war-damaged apartments free of charge
While vital infrastructure and even energy sites have indeed in many cases been obliterated, the lights are still on across the country, save for the persisting government-imposed internet blackout. The internet blackout is now approaching 80 days.
Wall Street market maker Jane Street reduced its exposure to Bitcoin exchange-traded funds (ETFs) in the first quarter of 2026 while increasing positions in Ether funds.
Jane Street cut major Bitcoin ETF holdings in Q1 2026, including BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC), according to a 13F filing published Tuesday.
IBIT holdings fell about 71% from Q4 2025 to roughly 5.9 million shares valued at about $225 million, while FBTC dropped about 60% to around 2 million shares worth roughly $115 million.
At the same time, Jane Street increased its exposure to Ether (ETH) ETFs, nearly doubling its position in BlackRock’s iShares Ethereum Trust (ETHA) and sharply raising its stake in Fidelity Ethereum Fund (FETH), adding about $82 million combined across the two products over the quarter.
The move comes amid early signs of institutional Ether ETF buying in early 2026, including increased exposure reported at Wells Fargo. The filing points to a reshuffling of Jane Street’s reportable crypto-linked holdings at quarter-end, though 13F disclosures do not show the market maker’s full trading book or net exposure.
Bitcoin exposure weakens further as Strategy stake falls
Jane Street’s Bitcoin-linked exposure weakened further in Q1 2026 as it reduced its stake in Michael Saylor’s Strategy (MSTR) alongside major ETF cuts.
In Q4 2025, the firm held about 968,000 MSTR shares worth roughly $145.9 million. By Q1 2026, the common stock stake fell to about 210,000 shares valued at roughly $27 million, a decline of about 78% quarter-over-quarter.
Jane Street increased its Strategy (MSTR) position by 473% in Q4 2025. Source: TheBTCTherapist
Strategy selling followed significant buying in the previous quarter as Jane Street reportedly increased MSTR position by 473% in Q4 2025.
In Q1 2026, the company also trimmed exposure across several Bitcoin mining stocks, including IREN, Cipher Mining, TeraWulf and Core Scientific.
Increased exposure to Coinbase, Galaxy and Riot
Despite broad downside pressure on Bitcoin-related assets, Jane Street increased exposure to several crypto-linked equities over the quarter, suggesting more selective positioning in crypto-related equities rather than a broad exit from the sector.
Jane Street raised its stake in the crypto mining company Riot Platforms (RIOT) to about 7.4 million shares, up from 5 million, increasing its value to roughly $91 million from $63 million.
It also increased its position in Coinbase (COIN) to about 888,000 shares from 778,000, with the value rising to about $155 million from $176 million in the prior quarter.
Galaxy Digital (GLXY) saw the sharpest expansion, jumping to about 1.5 million shares from just around 17,000, lifting its value to roughly $28 million from around $380,000.
Jane Street posted a record $16.1 billion in Q1 trading revenue, according to Reuters, as volatile markets and gains tied to artificial intelligence-related investments boosted financial results.
Ugly, Tailing 30Y Auction Makes History With First 5%+ Yield Since The Great Quant Crash Of Aug 2007
Moments ago, the last refunding auction of the week, the sale of $25BN in 30Y paper, made history: it was the first 30Y auction to print with a high yield above 5%, and a coupon of 5%, since August 2007… which as veteran traders will recall was the month of the historic quant crash which marked the S&P highs at the time and eventually culminated in the global financial crisis.
The auction priced at a high yield of 5.046%, up sharply from 4.876% in April, and tailed the 5.041% When Issued by 0.5bps, the second consecutive tail following 4 stop-throughs.
But, as noted above, what is more notable was that this was the first 5% interest rate coupon 30Y auction, and the the first 30Y auction with a high yield above 5% since… August 2007 when surging rates sparked a quant crash. Come to think of it, unlike retail momentum chasers, quants have had a terrible month. How much longer can they last? But we digress…
Going back to the auction, the uglyness was all around: the bid to cover was 2.303, down from 2.385, below the 2.43 six auction average and the lowest since Nob 2025.
Internals were not quite as bad, with Indirects taking down 66.6%, up from 64.1% in April and just below the 66.8% recent average. And with Directs awarded 21.74%, Dealers were left with 11.7%.
Overall, this was an ugly, tailing auction, but the question on everyone’s lips is whether today’s quction will – like in August 2007 – be the VaR shock equivalent of a bond auction that pops this particular bubble. For the answer keep a close eye on quants who are suffering badly.
The court’s 2025–2026 term is expected to end in June with a series of rulings that could impact social issues and President Donald Trump’s agenda.
The last scheduled oral argument was held on April 29; the justices considered whether Trump wrongfully terminated deportation protections for thousands of Haitian and Syrian nationals. That decision and a ruling on Trump’s order restricting birthright citizenship could influence immigration policy for decades to come.
So far, the court has already issued opinions on Trump’s tariffs and redistricting. Its remaining decisions could change how elections are conducted, as well as alter the balance of power between Congress and the president.
Here are the main decisions expected before the end of June.
Birthright Citizenship
A key part of Trump’s immigration agenda has been his attempt to limit who receives American citizenship. The 14th Amendment states that “all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”
Historically, the executive branch interpreted this amendment to grant citizenship to babies born to illegal immigrants. Trump changed this interpretation on his first day in office, passing an executive order stating that the amendment only applied to children who had at least one parent with citizenship or lawful permanent residency.
In Trump v. Barbara, the president asked the Supreme Court to intervene after a federal judge blocked his executive order. During oral argument on April 1, the Justice Department said that parents should be legal residents or have some kind of allegiance to the United States before their children receive citizenship. The justices, however, seemed skeptical and indicated they may view citizenship more broadly.
Another highly anticipated decision focuses on Idaho’s and West Virginia’s laws preventing males from participating in girls and women’s sports. Federal appeals courts blocked those laws, stating that they conflict with another portion of the 14th Amendment known as the equal protection clause. That clause generally prohibits laws that classify or discriminate on the basis of certain characteristics.
The appeals courts said the state laws conflict with that clause because they classify individuals on the basis of their sex and “transgender status.” The U.S. Court of Appeals for the Fourth Circuit also said West Virginia’s law violated Title IX of the Civil Rights Act. That law prohibits sex-based discrimination in federally funded education.
The justices heard oral argument in January for the cases, known as Little v. Hecox and West Virginia v. B.P.J. Overall, the justices seemed inclined to uphold the states’ laws.
Monsanto’s herbicide, known as Roundup, has cost the company millions of dollars following lawsuits alleging one of its ingredients, glyphosate, increases cancer risk.
One of those lawsuits made it to the Supreme Court in April and could determine how much Monsanto has to pay in future lawsuits. The case, Monsanto v. Durnell, focused on a Missouri jury that held the company liable for not warning about glyphosate’s purported risks.
Monsanto told the Supreme Court that the jury’s verdict was based on a faulty interpretation of the law. The jury said Monsanto was liable under a Missouri law that requires warnings for consumer products. Monsanto argued that the jury interpreted the law in a way that conflicted with another law passed at the federal level.
The Supreme Court’s eventual decision is expected to touch on a legal doctrine known as preemption, which says that federal law takes precedence over state law when there is a conflict between the two. In this case, Monsanto said the Federal Insecticide, Fungicide, and Rodenticide Act should take precedence.
That law gives the U.S. Environmental Protection Agency authority to regulate chemicals such as glyphosate. Because the agency already approved glyphosate’s use and didn’t require additional warnings, Monsanto said Missouri couldn’t require more either. Durnell argued that the verdict didn’t conflict with federal law and that Missouri should be able to protect its citizens’ health.
Trump’s Ability to Fire Bureaucrats
One of the main legal complaints leveled during Trump’s second administration was that he fired high-level bureaucrats without good reason. Leaders of so-called “independent” agencies, such as the Federal Trade Commission (FTC), sued, alleging that Trump didn’t show the type of cause federal law required of presidents when firing officials.
In Trump v. Slaughter, Trump asked the Supreme Court to intervene after a lower court blocked his attempt to fire FTC Commissioner Rebecca Slaughter. The justices seemed inclined in December 2025 to not just allow her firing, but also expand the authority presidents have in removing bureaucrats like her.
Their eventual decision could overturn a 90-year-old precedent from Humphrey’s Executor v. United States. In that 1935 case, the Supreme Court held that former President Franklin D. Roosevelt wrongly fired a former FTC commissioner and that Congress could restrict his ability to do so.
The Trump administration argues that the Constitution gives the president greater authority and that Congress cannot use laws such as the FTC Act to restrict his ability to remove bureaucrats.
Like the FTC Act, another law, known as the Federal Reserve Act, said presidents couldn’t remove high-level officials without cause. That was the law that Federal Reserve Governor Lisa Cook cited when she challenged Trump’s attempt to fire her last year.
Trump removed Cook while citing allegations that she committed mortgage fraud, something she has denied. During oral argument in January, the Supreme Court wrestled with multiple questions: whether Trump gave Cook enough due process before firing her, how the firing would impact the economy, and how Trump’s view of his authority would impact the Federal Reserve’s independence.
Overall, the justices seemed inclined to side with Cook. The case, Trump v. Cook, followed other decisions in which the Supreme Court suggested that the Federal Reserve was more independent than agencies such as the FTC and that its members therefore deserved additional protections.
The 2020 presidential election reinvigorated debate over mail-in ballots, a controversial method of voting that Trump and others argue is vulnerable to fraud. Multiple states, including Mississippi, have allowed mail-in ballots to be counted after Election Day as long as they are postmarked on or before that day.
Trump and the Republican National Committee argue that practice violates a federal law that defines Election Day as “the Tuesday next after the first Monday in November.”
When the case, Watson v. Republican National Committee, reached the Supreme Court, the Trump administration supported the committee’s position.
“‘Election day’ was the day all voting needed to be completed; and the act of voting was not complete until a ballot had been officially received,” the Justice Department told the court.
Mississippi argues the law simply requires that voters make their choice by Election Day, not that their ballots are counted.
During oral argument in March, the justices seemed more likely to side with the committee. “We’re moving in this direction,” Justice Samuel Alito said. “We don’t have Election Day anymore. We have election month or we have election months.”
Deportation Protections
The court’s most recent oral argument focused on the Department of Homeland Security’s termination of deportation protections for thousands of Haitians and Syrians. “Temporary protected status” prevents nationals of certain countries from being removed if conditions in their home countries would make returning unsafe.
Under President Barack Obama, the department granted that status for Haiti, which was impacted by the 2010 earthquake, and Syria, which has seen ongoing political turmoil and armed conflict.
Former Homeland Security Secretary Kristi Noem terminated those protections last year, prompting lawsuits and federal judges’ orders blocking those terminations.
The justices heard oral argument in the cases, known as Mullin v. Doe and Trump v. Miot, on April 29. They considered whether those judges exceeded their authority under the Immigration and Nationality Act, which generally prohibits judicial review of the department’s determinations about temporary protected status.
Lower court judges, however, said the administration still had to follow certain procedures, but that it didn’t when it terminated those protections. The justices also considered a federal judge’s argument that the administration likely acted with racial animus toward Haitians and therefore violated the Constitution.
Campaign Finance
How much protection does the First Amendment afford political parties when they spend money on campaigns? That’s one of the questions the Supreme Court is expected to address in a case called National Republican Senatorial Committee v. Federal Election Committee.
The case originated with a lawsuit brought by then-Senate candidate JD Vance, who argued that Congress violated the First Amendment with the Federal Election Campaign Act. That law restricts how much political parties and candidates’ campaigns can coordinate their spending.
The Supreme Court upheld that restriction in 2001 on the basis that coordination opened a backdoor for corruption. In its upcoming decision, the court could maintain its prior position or overrule itself while siding with Republicans.
Up To $170 Billion Needed To Secure Full Domestic Nuclear Fuel Supply Chain
To support current commercial nuclear operations, plus 300 GW of new nuclear capacity for a total of roughly 400 GW by 2050, all fueled domestically, the country would need to invest between $105 billion and $170 billion across the entire nuclear fuel cycle.
Is it still called a bottleneck if the entire industry is the problem?
The consulting firm McKinsey & Company used the most aspirational scenario from the Trump administration’s May 2025 executive orders as its benchmark for their recent report. That means rebuilding capacity from mining and milling through conversion, enrichment, fabrication, and even reprocessing.
It’s looking more and more like the $2.7 billion award from the DOE for domestic enrichment barely scratches the surface:
$15-20 billion for mining and milling
$30-45 billion for conversion
$30-40 billion for enrichment
$10-20 billion for fabrication
$20-45 billion for reprocessing
These figures assume a mix of new and existing reactors, including Gen IV designs that will demand high-assay low-enriched uranium (HALEU).
We have documented the vulnerabilities for months. Today the United States imports about 99 percent of the raw uranium ore needed for its commercial fleet…
With milling capacity effectively nonexistent and conversion limited to a single operating facility…
And enrichment capacity covers only about one-third of domestic needs…
The gaps leave utilities exposed to geopolitical risks and price volatility, a point we highlighted when uranium spot prices pulled back earlier this year even as long-term supply deficits widened…
— zerohedge (@zerohedge) December 12, 2025 “>accelerating, however. We reported on the DOE’s Nuclear Fuel Cycle Defense Production Act Consortium, which has met repeatedly to map out a seven-year “Nuclear Dominance – 3 by 33” plan covering every link from mining to reprocessing.
DOE has also awarded nearly $3 billion for enrichment projects, including $900 million each to Centrus Energy and General Matter, while the Export-Import Bank has backed up to $4.2 billion in additional financing. Centrus recently committed $560 million to scale centrifuge manufacturing in Oak Ridge, and we covered its joint-venture discussions with Oklo for HALEU deconversion services.
The private sector is also making progress on their own, not wanting to wait for the government to sort itself out and attempt to take market share while it’s up for grabs.
Uranium Energy Corp is expanding ISR mining and advancing conversion licensing. New entrants like FluxPoint Energy and LIS Technologies are targeting conversion and next-generation laser enrichment facilities, aiming for commercial operations before 2030.
We also noted Goldman Sachs’ updates showing persistent supply-demand mismatches that continue to support higher uranium prices over the coming decades.
McKinsey stresses that capital alone will not suffice. Permitting reform, infrastructure build-out, workforce development, and advanced technologies will prove critical to compressing the long lead times inherent in fuel-cycle projects. The firm acknowledges 100% domestic sourcing will prove challenging, yet the analysis underscores that options exist if stakeholders maintain focus.
By Bas van Geffen, senior macro strategist of Rabobank
Concerns about the Middle East continued to dictate markets yesterday. The Strait of Hormuz remains closed, and there were no signs that this will change soon. Oil prices rose further. Dated Brent jumped 5% on the day to top $111.
Alongside the rise in benchmark energy prices, yields increased too. 10y US Treasury yields closed around 5bp higher, and 10y German Bund yields rose 6bp to 3.1%, dragging broader EUR yields up. Equities struggled. European bourses closed around 1.5% lower, but the S&P pared most of its losses after the European close, so the Euro Stoxx index may catch up to its US counterpart today.
This reversal happened after oil prices came off their intraday highs, and as news broke that Nvidia CEO Huang will join the US delegation to China. President Trump indicated that he wants to focus on economic issues during his summit with President Xi, more so than on geopolitical issues in the Middle East. Markets certainly seem hopeful that Trump and Xi will discuss B200 chips rather than B-2 bombers.
Of course, the Iran war complicates negotiations between the two leaders. China agrees to oppose any toll scheme for safe passage through the Strait of Hormuz, according to the US State Department. Meanwhile, Iraq and Pakistan have reportedly made deals with Iran to safeguard oil and LNG shipments from the Gulf – underscoring that Iran is able to effectively control the flow of energy through the Strait of Hormuz. China has also further diversified its oil imports. This may make China more resilient to prolonged disruptions in Hormuz, while it also cuts off more potential income for Iran.
But China will probably want something in return. President Trump will reportedly discuss US weapons sales to Taiwan with Xi, breaking with a decades-long US tradition. US allies in Asia are alarmed that Trump may agree to Xi’s request to delay or stop deliveries. That’s a longer-term geopolitical risk, but markets may shrug off any such potential concessions if the US and China report progress on economic issues.
And any optimism from the Trump-Xi summit may be overshadowed by developments in the Middle East. It’s unlikely that tensions will flare up again during the summit, but that’s only two days of respite. On his way to China, President Trump told reporters that stopping Iran’s nuclear programme outweighs Americans’ economic pain. The US presidents’ comments add to concerns that tensions in the Middle East may flare up again after the summit.
Adding further unease about the US’ next steps in the Middle East, the Wall Street Journal reports that the US president spoke with his U.A.E. counterpart to discuss “mutual interests.” This news follows on the WSJ’ report that the United Arab Emirates had secretly carried out military strikes in Iran.
Elsewhere, gilt yields’ rollercoaster ride continues, as domestic politics stack on top of geopolitical risks. Even the BBC is talking about intraday moves in gilts now, which is never a sign that things are going well. Pressure on a defiant PM Starmer is building. Several ministers resigned from their posts yesterday, after dozens of MPs had already called on Starmer to resign. Today, the 11 unions that support the Labour party are expected to issue a joint statement that calls for a roadmap to a new party leader into the next general elections.
Uncertainty about the UK’s leadership continues to weigh on both UK sovereign yields and the currency.
Qatar has requested LNG vessels near its Ras Laffan LNG port to switch off their transponders as part of safety measures at the key export port of the world’s second-largest LNG exporter before the war, anonymous sources with knowledge of the plan told Bloomberg on Tuesday.
The de facto closure of the Strait of Hormuz has trapped about 20% of daily global LNG flows, mostly those previously shipping out of Qatar and part of the UAE’s LNG flows.
In addition, Iranian drone and missile strikes on energy infrastructure in the region has damaged Qatar’s key LNG liquefaction complex Ras Laffan, the world’s single largest such facility. Due to the attacks, QatarEnergy has been forced to declare force majeure for up to five years on some long-term LNG contracts and has advised that full capacity could take up to five years to restore following extensive damage from the strikes.
The waters around Qatar have seen increased security threats since the war began on February 28. After more than two months of total blockage of Qatari shipments out of the Strait of Hormuz, the major Gulf LNG exporter is now apparently seeking to avoid being targeted.
At least nine LNG tankers that were anchored near Qatar stopped sending signals via their Automatic Identification System from May 11, vessel-tracking data compiled by Bloomberg showed, in a sign that Qatar may have indeed asked ships to go dark to avoid being targeted.
A tanker laden with LNG from Qatar successfully passed the Strait of Hormuz this weekend, the first such transit since February 28.
Crude tankers have also successfully exited the Strait in recent days, after going dark, according to shipping data cited by Reuters.
“Commercial shipping and maritime security activity around the Strait of Hormuz are increasingly shifting into dark or emissions-controlled conditions,” maritime intelligence firm Windward said on Monday.
Chinese Supertanker Sails Out Of Hormuz In Rare Exit
As president Trump was on his way to China, a Chinese tanker appears to have exited the Strait of Hormuz as it sails toward an area where the US has enforced a blockade, ahead of talks between US President Donald Trump and counterpart Xi Jinping, Bloomberg reported today, citing ship-tracking data showing the VLCC moving south along the eastern side of the chokepoint.
The supertanker which sailed past Iran’s Larak island, and into the Gulf of Oman, is Yuan Hua Hu, owned by Cosco, and would be only the third tanker carrying oil for China from the Persian Gulf that has traversed Hormuz since the start of the war. The vessel is broadcasting its Chinese origin and crew, Bloomberg said, as other vessels have done previously to secure safe passage.
Yuan Hua Hu’s draft indicates it’s fully loaded with oil, or close to the vessel’s 2 million barrel capacity. It was seen lifting from Iraq’s Basrah terminal in early March, according to ship-tracking data. The vessel was chartered by Unipec, the trading arm of Chinese state refining giant Sinopec, according to a fixture seen by Bloomberg.
In April, two very large Chinese crude carriers were allowed to pass the Strait of Hormuz under Iran’s toll system that demands payment of $2 million per supertanker to pass. One of those was the same Yuan Hua Hu that is currently moving along the strait.
China imports the bulk of its energy from the Middle East, and while it has amassed substantial crude oil stockpiles that are helping it weather the worst of the crisis – anecdotally over 1.4 billion barrels – restoring normal flows from the Persian Gulf is important for one of the world’s top energy importers.
Earlier in the war, reports emerged that Beijing had pressured Iranian officials to stop attacking vessels carrying crude oil and LNG via Hormuz. Judging from later events that involved Iranian strikes on vessels in the chokepoint, Tehran did not yield to the pressure.
The moment is delicate for relations between the United States, China, and Iran as President Trump heads to Beijing for talks with President Xi on topics that are bound to include traffic via the Strait of Hormuz. According to media reports, President Trump plans to have “a long talk” with President Xi about Iran, even as he told news agencies he did not need China’s help in resolving differences with Iran.
