Heading into today’s TSLA earnings, Wall Street was braced for a miss, with debate only around how big it would be. Well, it wouldn’t be an Elon Musk joint if there wasn’t some big twist, and sure enough, the stocks is soaring after hour on what can only be described as a very big, and very unexpected beat.

Here is what the company reported for the first quarter:

• Rev. $22.39B, beating Est. $22.19B
• Adj EPS 41c, beating Est. 34c, the second straight quarter Tesla’s earnings beat expectations.
  • EPS 13c vs. 12c Y/Y
• Gross Margin 21.1%, beating Est. 17.7%
• Auto Gross Margin Ex-Reg Credit 19.2% vs 12.5% Y/Y
• Free Cash Flow positive $1.44B, beating est. Negative $1.86B

Perhaps the most interesting of the above, besides the modest beats in revenue (which benefited from positive FX impact of about $900 million in the quarter translating into $200 million at the bottom line; as well as higher average selling prices) and EPS, is that despite weak EV and energy unit sales, Tesla’s reported gross margins in both businesses are up. Generally, fixed costs spread over fewer units puts pressure on GPM, all else equal. The auto margin, less credits, of 19.2% is up q-o-q and y-o-y. In energy, despite lower revenue both sequentially and versus last year, Tesla reports what looks like a record gross margin for that business of almost 40%.

Yet while Tesla turned in higher auto gross margins than expected, given weak sales, that fades away when reading down the P&L: operating margin of just 4.2%. 

Meanwhile, earnings continue to subsist heavily on a diet of regulatory credit sales, which in Q1 dropped to 381 million from $337 million a year ago, and net interest income.

And visually:

Starting at the top, it’s no surprise that that TSLA likes soaring gas prices, which have helped a “rebound in demand” in the core US market, to wit:  “We saw continued growth in demand for our vehicles in markets in APAC and South America, while also seeing a rebound of demand in both EMEA and North America.”

The surprisingly optimistic comments come several weeks after the automaker reported one of its worst quarters of auto sales in years. 

Here is how TSLA laid out its automotive business” We are focused on optimizing our vehicle product portfolio, with an emphasis on vehicles designed for a fully autonomous future. We continued the launch of Model 3 and Model Y trims globally, including the roll-out of the Model YL in markets outside of China and more affordable trims of both models. We also began deliveries of Cybertruck in the UAE.“

Unlike recent quarters, we didn’t have an “other updates” section with a surprise investment, there’s minimal change in language and if anything it projects a lot of confidence in core business. In short, a “no surprises, no drama” print.

One key metric that is also key to Elon Musk’s pay package, is active FSD subscriptions. They were up slightly this quarter to 1.28 million from 1.1 million at the end of 4Q, and up a whoppint 51% YoY.

There were some working capital issues: global inventory spiked to 27 days, up from 15 days, which was to be expected given that Tesla produced more than 50,000 cars than it delivered in 4Q, but still that’s a lot of inventory to clear.

And speaking of inventory, Tesla has overcapacity in its factories, so now the company is rolling out the Model YL (Long) in “markets outside of China” and more affordable trims of both models. It also began deliveries of cybertruck in the UAE.

While energy storage had been Tesla’s fastest-growing sector but that trend failed to continue into the first quarter, when year-over-year revenue slipped 12% and quarterly deployments of 8.8 gigawatt-hours were the lowest in a year. This is what it had to say about the business:

“Progress continued at the new Megafactory outside Houston, which will produce the Megapack 3 for Megablock. Start of production is on track for later this year. We began meaningful customer deployments of Tesla’s first in-house designed solar panel produced at Gigafactory New York. The new panel has 18 individual power zones – 3x more than a conventional residential panel – enabling it to reliably produce more energy in shady conditions. Other innovations include improved aesthetics and faster and simpler installation.” 

Turning to the far more important robotics business, the company expects the first large-scale Optimus factory to start in Q2. The first generation line, designed for 1 million robots a year, will replace the Model S and Model X lines in Fremont. The company is also preparing Gigafactory Texas for the second-generation line, which is being designed for long-term annual production capacity of 10 million robots.

Turning to AI, Tesla said that “Cortex 2 is now online and has started running training workloads.” Tesla continues to ramp its onsite training infrastructure to ensure sufficient compute resources for the development of our AI products and services and “are also continuing our custom silicon development with Dojo 3 in an effort to reduce the cost of training over time.“

In the battery business, “ramp has begun across our new battery and material factories, including LFP cells in Nevada, cathode material and lithium refining in Texas.” Battery pack capacity continues to be the limiting factor on ramping our vehicle production the company said.

What is the company’s other supporting infrastructure? This is what it had to say: “Gigafactory New York is now producing V4 Supercharging cabinets, which boast 3x the power density and 2x the number of stalls per cabinet compared to V3. Alongside the ramp of Tesla Semi, we are deploying public Megachargers, including our first one in Southern California. While we aim to leverage as much of our existing investments as possible, we continue to build out our supporting infrastructure for our vehicle and mobility businesses, including Robotaxi expansion, across established and growth markets around the world. In Q1, we added over 2,200 net new Supercharging stalls, growing the network 19% year-over-year. This year we look to increase our presence in Japan by doubling our service centers and expanding our Supercharger coverage in the world’s third largest vehicle market”

The company’s outlook was generally very favorable:

• Volume: “We are focused on maximum capacity utilization at our factories. Deliveries and deployments will be impacted by aggregate demand for our products, supply chain readiness and allocation decisions between sale to customers or use for our owned and operated fleet.”
• Cash: “We will manage the businesses such that we ensure a strong balance sheet, maintaining sufficient liquidity to fund our product roadmap, long-term capacity expansion plans – including further vertical integration – and other expenses.”
• Profit: “While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardwarerelated profits to be accompanied by an acceleration of AI, software and fleet-based profits.”
• Product: “We continue to evolve and augment our product lineup with a focus on cost, scale and future monetization opportunities via services powered by our AI software. We remain focused on growing our sales volumes through a differentiated and efficiently managed product portfolio, which includes leveraging and optimizing our existing production capacity before building new factories and production lines. Cybercab, Tesla Semi and Megapack 3 are on schedule for volume production starting in 2026. First-generation production lines for Optimus are being installed in anticipation of volume production. Capacity build out and ramp related to our multi-year infrastructure initiatives, including AI compute, solar, battery material and semiconductor manufacturing are underway.”

There was yet another sign of convergence between Elon Musk’s companies: 

“Our partnership with SpaceX aims to build the largest chip fab ever: vertically integrating logic, memory and advanced packaging to allow for rapid iteration as we anticipate greater chip demand than what existing and planned industry capacity can accommodate. This begins with the Tesla-owned Research Fab on our Gigafactory Texas campus.”

As for Terafab, we already knew that this mega project would start with a pilot line. But what’s interesting is this is Tesla’s and not a part of the joint-venture with SpaceX/xAI. Here’s what the deck says:

“This begins with the Tesla-owned Research Fab on our Gigafactory Texas campus.”

Last but not least, TSLA surprised the market by reporting a positive free cash flow…

… but Tesla pulled a number of levers:

• Stock-based comp nearly 2x, year-over-year
• Big swing in accounts payable and receivables add ~$1.9B, offsetting much of the big inventory headwind
• Most of all, capex at just $2.5B, or only about half the run-rate implied by guidance

Also don’t expect free cash flow to remain positive: Tesla is working to ramp up production as part of a more than $20 billion spending plan this year. For the first three months of the year, however, Tesla spent less than $2.5 billion, half the outlay the company will need to average per quarter to reach its expenditure forecast for the year. This contributed to Tesla posting $1.4 billion in positive free cash flow for the quarter, far better than analysts’ expectation that the carmaker would burn through almost $1.9 billion.

Looking ahead the company is excited “about Tesla’s positioning in 2026 with tailwinds persisting for the autos business, our continued progress on FSD (Supervised), the ramp of Robotaxi, progress on Optimus ahead of mass production and the growth of our energy production capacity”

Judging by the stock reaction, the market is also excited, and as Interactive Brokers Chief Strategist Steve Sosnick writes, this print is “good enough.” He highlighted the adjusted profit and revenue beats as well as the “surprise” positive flip to free cash flow. “The car business improved, and there is nothing that disrupts the futurism that juices Tesla’s valuation. Now it’s up to what Musk says on the call”

Others, like Adam Sarhan, of 50 Park Investments, were also happy: “The real story isn’t just these numbers — it’s the execution on the roadmap. The trajectory feels constructive. Longer term, I’m still very bullish on Tesla’s positioning in AI, robotics, and energy. These results show resilience and set up better comps ahead. The market will digest the forward commentary tonight, but the fundamentals are pointing up.”

That said, the initial euphoric reaction may moderate if analysts interrogate this idea of rebounding demand on the earnings call, given that Tesla has loads of cars in inventory right now. 

Summary

• At least two fully laden Iranian tankers slip past US naval blockade, amid reports of more going dark, BBG reports, but Pentagon denies.

• Reports of three more Iranian tankers being seized by US in Asian waters.

• Trump extends ceasefire by 3-5 days, per White House statement to Fox. Third US carrier precisely 3-5 day away from Mideast waters: Fox

• IRGC seized the MSC Francesca and a Greek-owned ship named Euphoria, which had been attempting to transit the Hormuz chokepoint earlier today. Within hours, a third ship comes under fire by the IRGC.

• Senior Iranian adviser says the US naval blockade is “no different than bombing” and must be met “with a military response”.

• Competing narratives emerge over what Iran calls “fake news” as Trump hails “release” of 8 Iranian women said to be facing death penalty.

*  *  *

Three Iranian Tankers Intercepted by US in Asian Waters

The US appears to be serious about its counter-Iran interdictions going global, as the US military has newly intercepted at least three Iranian oil tankers in Asian waters, per Newsquawk.

The tankers are now being redirected and escorted, according to shipping and security sources, presumably in what will end up being another seizure of Iranian oil on the high seas.

Plot Thickens, Gets More Bizarre: Iran Denies 8 Women Set to Be Executed

There’s been a lot of fresh back and forth over Trump’s initial Truth Social Post earlier this week: first he demanded that eight young women he said were on death row in Iran for protesting must be released. Then on Thursday Trump proclaimed that Iran complied.

But Iran is rejecting the whole narrative as fake news from the start. “Trump was misled once again by fake news,” the judiciary’s official Mizan Online website said. “The women who were claimed to be on the verge of execution, some of them have been released, while others face charges that, if convictions are upheld, would at most result in imprisonment.” The Times (UK) picked up on the story, but underscored:

The image Trump recirculated was originally created by the Lawfare Project, a pro-Israel organisation based in the US.

The human rights organisation Hiwa identified the women in the post. They included Panah Movahedi Salamat and Ensieh Nejati.

“To the Iranian leaders, who will soon be in negotiations with my representatives: I would greatly appreciate the release of these women. I am sure that they will respect the fact that you did so. Please do them no harm! Would be a great start to our negotiations!!!” – President… pic.twitter.com/pxU8xZFvAh

— The White House (@WhiteHouse) April 21, 2026

While Iran has certainly carried out horrendous executions in the recent past, this particular case has incubator babies hoax written all over it.

Third Carrier 3-5 Days Away

We’ve been tracking the progress of the USS George HW Bush aircraft carrier as it makes its way to the US Central Command/Mideast area. Interestingly its arrival could correspond with the end of Trump’s extended ceasefire by this weekend. Fox News is freshly reporting that the vessel, which will be the third carrier in waters near Iran, is expected to arrive in three to five days. “The USS Bush Aircraft Carrier is expected to arrive in the Middle East within five days,” a Fox News reporter has said on X.

It took the ‘long way’ around Africa in order to avoid the Red Sea, and thus the potential for coming under attack by the Houthis or Iranians.

The aircraft carrier strike group is currently located somewhere off the coast of Tanzania or Kenya and will arrive in the region in 3-5 days, becoming the third aircraft carrier in the war against Iran.

Meanwhile, Iranian President Masoud Pezeshkian says in a post on X: “Breach of commitments, blockade and threats are main obstacles to genuine negotiations.”

Carrier-related air traffic has been observed in this area over about the last day (FlightRadar):

Serious Slippage in US Naval Blockade as Iranian Vessels Go Dark

Confirmation from Bloomberg after some initial unverified claims circulated yesterday: Iran Tankers Go Dark to Sail Past US Blockade Laden With Oil. Additional reports suggest that the total number of Iran-linked tankers slipping through is actually much larger, suggesting the potential unravelling of the US naval blockade of ships visiting Iran’s ports:

Donald Trump’s naval blockade of the Strait of Hormuz is unraveling after dozens of Iranian vessels secretly slipped past US surveillance, even as the regime tightened its grip on the critical oil passageway by attacking three tankers.

Approximately 34 Iranian oil tankers have slipped through the blockade, with 19 vessels exiting the Persian Gulf past Trump’s navy and another 15 ships entering from the Arabian Sea toward Iran, according to the Financial Times. Six of those tankers were smuggling Iranian crude oil totaling 10.7 million barrels, estimated to be worth approximately $910 million in revenue for the regime.

Of course, the Pentagon’s own figures stand in direct contradiction, but the fact that major Western MSM outlets like FT and Bloomberg are picking up on significant numbers getting through doesn’t bode well for the Trump blockade.

Meanwhile, the locations of the earlier seizures by Iran’s IRGC. Two are being escorted to Iran’s coast:

Trump Extends Ceasefire for 3-5 Days

The White House has told FOX Wednesday morning that President Trump has extended the ceasefire by three to five days. This was also reported earlier by Axios, with the US seeking for the Iranian side to “come to the table with a unified approach.” There’s a growing assumption within the administration that it might be dealing with two competing factions: a civilian government side in Tehran, and the IRGC.

Tasnim meanwhile reports that Iran has made no decision as of yet to negotiate with the US, amid rumblings that talks could resume Friday. WSJ’s latest commentary:

Singh [former senior director for Middle East affairs at the National Security Council who is now at the Washington Institute think tank] warned that the blockade could prove a double-edged sword for Washington, at a time when the blockade of the Strait of Hormuz is hurting the world economy and driving up U.S. energy prices ahead of November’s midterm elections.

“The blockade is a bet that Iran will break before the rest of the world will, but it’s a risky bet,” he said. “The Iranian regime is fighting for its survival and has demonstrated an ability to withstand the strangulation of its oil exports.”

The latest as both warring sides impose rival blockades in Hormuz:

FT: At least 34 tankers with links to Iran have bypassed the US blockade since it began, according to the cargo tracking group Vortexa, including several carrying Iranian oil— despite President Trump declaring the barricade a “tremendous success”. https://t.co/G3v3VbHnsA

— Annmarie Hordern (@annmarie) April 22, 2026

Third Ship Attacked by IRGC

The IRGC on Wednesday attacked a third vessel of the day in the Strait of Hormuz, rapidly escalating tensions further in the dangerous standoff. The container ship Francesca, owned by Mediterranean Shipping, was targeted while waiting to enter.

“An Iranian gunboat fired on a containership northeast of Oman, before a second vessel reported being fired at off the coast of Iran,” according to WSJ. “Then the Islamic Revolutionary Guard Corps fired on a third ship. The incidents within hours of each other demonstrate that while the aerial war between the U.S. and Iran is on pause, the fight for control of the strait continues.” The same publication offers the following outline summary of where things stand on the diplomatic front:

• A senior Iranian adviser said the U.S. naval blockade is “no different than bombing” and must be met “with a military response.”
• Iran’s ambassador to the U.N. said his country is ready to negotiate with the U.S. once it ends the blockade.
• Britain will host military planners from more than 30 countries for two days of talks aimed at reopening the Strait of Hormuz starting Wednesday.

Iran Seizes Two Ships In Hormuz

The semi-official news agency Fars reports on X that Iran’s Islamic Revolutionary Guard Corps seized the MSC Francesca and a Greek-owned ship named Euphoria, which had been attempting to transit the Hormuz chokepoint earlier today. In total, three ships were targeted this morning by IRGC naval forces, and two were seized.

“The IRGC Navy seized two violating vessels and transferred them to Iran’s coast. IRGC Navy Command: Disruption of order and safety in the Strait of Hormuz is our red line,” Fars said, adding that both vessels had been “immobilized.”

نیروی دریایی سپاه دو کشتی متخلف را توقیف و به ساحل ایران منتقل کرد

فرماندهی نیروی دریایی سپاه: اخلال در نظم و ایمنی تنگه هرمز خط قرمز ماست pic.twitter.com/LyhPFqGMwV

— خبرگزاری تسنیم (@Tasnimnews_Fa) April 22, 2026

Earlier, the British military’s United Kingdom Maritime Trade Operations Center reported that the two vessels had come under heavy fire in the narrow waterway.

Current snapshot of the waterway via Bloomberg ship-tracking data of tankers:

All three maritime incidents in the Strait come as President Trump has kept the U.S. blockade of Iran in Hormuz in place, and U.S. naval forces seized an Iranian ship over the weekend before boarding another tanker linked to Iran.

Related:

• Tehran Timeline: Iran Has 15 Days Until Its Oil Industry Begins Full Shut-Ins

Overnight, Trump extended a ceasefire with Iran so negotiators “can come up with a unified proposal,” but said the naval blockade will continue, while Tehran says it is an “act of war.”

Iran’s semi-official Tasnim cited the country’s envoy to the UN, Amir-Saeid Iravani, as telling reporters: “We have received some sign that they are ready to break it and as soon as they break this blockade, I think that the next round of the negotiations will take place in Islamabad.”

Iravani added, “If they want to sit at the table and discuss and find a political solution, they will find us ready. If they want to go to war, in this case also Iran is ready.” The status of the next round of US-Iran talks remains unclear. Vice President JD Vance has not departed for Pakistan as expected on Tuesday.

More Latest Regional Developments

via Newsquawk…

Authored by Jonathan Turley,

The Chicago Public Schools are facing a major truancy problem…among teachers.

The Chicago Teachers Union (CTU) was up in arms over suggestions that classes should be held on May 1 when teachers wanted to be out protesting.

Called International Workers’ Day, May Day is a global day of protest for socialist, communist, and unionist groups.

The CTU was upset when parents objected that canceling a day of class for teachers to join a political protest was a burden for working parents. These teachers believe that they are teaching something far more important through their activism. In defending the demand for publicly subsidized protests, CTU Vice President Jackson Potter explained that “teaching our students what civic action looks like requires more than textbooks.”

While that does not help with the dismal proficiency scores of actual students, it is vital to training students as political foot soldiers.

The CTU and the National Education Association recently collaborated on a “curriculum build” to bring “social justice into the classroom” ahead of May Day. Dave Stieber, a history teacher in Chicago Public Schools is shown declaring that “May Day is a dress rehearsal for maybe there’s a random day in, you know, June that we all are, like, no work, no school, no shopping…So this is a continuation and a buildup of that.”

In the meantime, with only 2 of 5 students reading at grade level, the Chicago teachers chose to lower proficiency levels rather than improve their teaching record.

While failing on actually teaching students, the CTU is proficient at instructing politicians such as Mayor Brandon Johnson through the use of union dues to fund Democratic campaigns.  The CTU and other teachers’ unions funneled millions into Johnson’s campaign. By one estimate, 93 percent of Johnson’s campaign budget came from unions.

The CTU has long held the distinction of being the most radical teachers’ union in the country. It was a CTU delegation that went to Venezuela during the Maduro regime to praise conditions under socialism. In a country where dissenters and reporters were being jailed and killed, the Chicago teachers gushed about how “we did not see a single homeless person!”

Chicago area teachers have been charged with violent protests.

Suggesting that teachers should work rather than attend May Day protests set off the Chicago teachers. Now, the union has confirmed that classes will be held without the participating teachers, and Chicago Public Schools will pay for buses for both students and educators to go to the protests.

The city further promised that there would be no repercussions for either students or teachers playing hooky from school.

This is not the first time unions and teachers have allowed students to skip classes to support left-wing protests. In New York, teachers and students were allowed to skip school to demand a ceasefire in Gaza. Previously, students were allowed to skip school to protest climate change.

These school districts do not show the same participatory support for protests on the right. There is no accommodation or city-subsidized buses for pro-life protests or demonstrations in favor of Israel.

Nevertheless, the Chicago school system is declaring that this is what schooling is all about in the Windy City. CPS CEO Macquline King stated that “the agreement honors the proud history of civic action in Chicago and beyond.”

Decades ago, my parents helped create an organization to stem the exodus of families from public schools and to reinforce academic standards in the Chicago Public School system. They convinced more families to remain in the system because they believed (as I do) that public schools can play a critical role in shaping citizens through a diverse and shared experience.

I was long skeptical of voucher systems because of that commitment to public education. However, teacher unions and administrators are destroying public education in America. They are treating families as captive audiences while infusing education with social and political agendas. The only way to break this decades-long cycle of failure, in my opinion, is to give families alternatives by allowing them to send their children to schools with core educational (as opposed to advocacy) priorities.

Nevertheless, Mayor Johnson celebrated the funding of the May Day protests:

“We are pleased all parties are working together to ensure school communities can participate in commemorating International Workers Day…Encouraging participating allows Chicagoans to honor our history while advocating for our future. We look forward to a day of meaningful solidarity and community resistance to the forces trying to tear us apart.

Schools have long been a target for indoctrination by radical elements. The Cultural Revolution in China was the most extreme example where children were forced into protests and taught that political activism came before scholastics under the slogan “to rebel is justified.”

Mao declared that “our educational policy must enable everyone who receives an education to develop morally, intellectually and physically and become a worker with both socialist consciousness and culture.”

In the CTU/NEA seminar, Kirstin Roberts, a pre-school teacher in Chicago Public Schools, is shown explaining that the purpose is to “encourage teachers of young children not to feel like this is stuff that’s way beyond their students, not to be afraid of raising up social justice issues, including workers’ rights, anti-racism, pro LGBT, LGBTQIA plus issues, immigration and immigrants rights.”

The erosion of the line between education and advocacy is now occurring on every level of our educational system. Some universities now have “resident activist” programs or offer degrees in advocacy.

In my book Rage and the Republic, I discuss the rise of the “new Jacobins” in the United States, including a cadre of radical educators who use our schools to pursue fundamental changes in our constitutional system. Law professors and deans are now calling for trashing our Constitution as a threat to the nation while teachers are using classes to radicalize students.

Chicago’s subsidy of May Day protests uses public funds in the struggling school system to foster radical political agendas. It removes any doubt for parents about the priority of Johnson, the CTU, and many of these teachers.

Some of the sentiments expressed in Chicago could have been ripped from Mao’s Little Red Book and speeches. He insisted “education must serve proletarian politics” and demanded “the period of schooling should be shortened, education should be revolutionized.”

In Chicago, the “period for schooling” is now being shortened in favor of “solidarity and community resistance.” While the students may not be able to actually read, they will learn the three R’s of modern education: resisting, raging, and rebelling.

Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution

Update(1510ET): The Pentagon has not been happy with today’s media headlines that proclaimed Iranian ‘dark’ tankers (with their transponders switched off) have been able to penetrate and get past the US Navy’s blockade. CENTCOM issued a late afternoon public message, stating: “Over past 24 hours, media reports have alleged that several commercial ships evaded the blockade, citing M/V Hero II, M/V Hedy, and M/V Dorena as examples. These reports are inaccurate. Hero II and Hedy did not sail past the blockade as part of a flotilla that ‘ferried’ millions of barrels of oil to the market.

It continued, “In fact, the Iranian-flagged tankers are anchored in Chah Bahar, Iran, after being intercepted by U.S. forces earlier this week. Dorena has been under the escort of a U.S. Navy destroyer in the Indian Ocean after previously attempting to violate the blockade.”

Earlier even Bloomberg alleged that two Iranian fully laden tankers breached the US blockade. Amid two competing and contradictory narratives, the fog of war remains thick, making it difficult to assess which version is ultimately correct.

U.S. forces have directed 29 vessels to turn around or return to port as part of the U.S. blockade against Iran.

Over past 24 hours, media reports have alleged that several commercial ships evaded the blockade, citing M/V Hero II, M/V Hedy, and M/V Dorena as examples. These… pic.twitter.com/SKelkSOr77

— U.S. Central Command (@CENTCOM) April 22, 2026

* * *

As Tsvetana Paraskova of OilPrice.com reported earlier, Iran continues to export its oil out of the Persian Gulf via the Strait of Hormuz using dark mode on tankers to move past the US blockade outside the world’s most vital oil chokepoint.

At least two Iran-flagged supertankers fully laden with an estimated about 4 million barrels of crude have exited the Gulf via the Strait of Hormuz and through the U.S. blockade, Bloomberg reports, citing satellite imagery analyzed by energy flows intelligence firm Vortexa.

The two Iranian very large crude carriers have been detected by satellite images as they had turned off their transponders and AIS positioning weeks ago. One of the supertankers, the Hero II, last transmitted a signal more than a month ago, with position in the Malacca Strait, data on MarineTraffic showed. The other VLCC, the Hedy, was last detected by AIS transponders around the same area near Malaysia and Singapore more than 70 days ago.

Various vessel-tracking and maritime intelligence firms say that Iran continues to export its oil and move tankers past the U.S. blockade, by increasingly using dark activity and signal spoofing tactics.

Earlier this week, an Iranian supertanker, which had delivered 2 million barrels of crude to a ship-to-ship transfer offshore Indonesia, was en route to return to Iran’s Kharg Island after entering the Strait of Hormuz through the U.S. blockade.

An Iran-owned VLCC departed Iran in late March 2026 and traveled to the Riau Archipelago in Indonesia, where she transferred 2 million barrels of crude oil to another VLCC, according to vessel monitoring data by TankerTrackers.com.

“Iranian flows continue via deception, including dark activity and ship-to-ship transfers,” maritime intelligence firm Windward said in a daily note on Tuesday.

“Iranian maritime trade remains active, but increasingly reliant on deceptive shipping practices and alternative routing strategies. New intelligence indicates potential shifts east of Hormuz, suggesting that pressure in the Gulf is driving adaptation rather than halting flows.”  

Authored by Troy Myers via The Epoch Times,

A federal appeals court on Tuesday pulled a judge’s previous order to dismantle the high-profile detention center in the Florida Everglades for illegal immigrants, known as “Alligator Alcatraz.”

In a 2–1 ruling, the U.S. Court of Appeals for the 11th Circuit sided with the Trump administration’s argument that there was minimal federal involvement in the facility’s construction, so a federal environmental review was not warranted.

“Using state employees and state funds, Florida officials, on their own initiative, constructed a detention center at an airport on state property in the Florida Everglades,” court documents showed.

Two environmental groups, Friends of the Everglades and the Center for Biological Diversity, joined the Miccosukee Tribe, which has villages close to the facility, in challenging construction of Alligator Alcatraz.

The groups accused state and federal officials of rushing to build the facility and failing to conduct an environmental review as required under the National Environmental Policy Act.

That federal law, passed in 1970, requires federal agencies to evaluate environmental impacts of proposed major construction.

Construction began last year on the facility, located at the Dade-Collier Training and Transition Airport in the Everglades, to assist with the Trump administration’s immigration enforcement and detainment of illegal aliens.

A lower court in August sided with the environmental groups and the Miccosukee Tribe, ordering officials to halt construction and even undo some work that had already been finished. But the higher court’s Tuesday order lifted that.

Federal authorities inspected the site for compliance with federal standards, court documents said, but this wasn’t enough to trigger a federally mandated environmental review.

“Because the environmentalists and Tribe failed to prove either a final agency action or federal control, and because the injunction, in part, violates a statutory prohibition of enjoining immigration enforcement, we vacate and remand,” Chief Judge William Pryor wrote in the federal appeals court ruling.

The 11th circuit has now twice lifted orders to halt construction—Tuesday’s ruling and again back in September.

“Victory secured against activist judge who held me in contempt,” Florida’s Attorney General James Uthmeier wrote on X in response to the 11th circuit’s September decision.

“A win for Florida and President [Donald] Trump’s agenda!”

Friends of the Everglades and the Miccosukee Tribe did not immediately respond to a request for comment.

The Center for Biological Diversity, however, issued a news release Tuesday in response to the latest legal development, calling it a “temporary” setback.

Wildlife and ecosystems remain imperiled, the group said.

“This disappointing decision won’t stop our challenges to the numerous environmental violations that the Trump administration is overseeing there,” Elise Bennett, director and senior attorney at the Center for Biological Diversity, said. “We’ll keep fighting because the Trump and DeSantis administrations’ obsession with sacrificing our Everglades, endangered panthers and wild waters to their cruel detention center is utterly indefensible.”

The groups further argue there was enough federal involvement to warrant a federal environmental review. The Center for Biological Diversity said FEMA committed hundreds of millions of dollars to Florida for building and operating the facility.

Eve Samples, executive director of Friends of the Everglades, had a statement in the news release as well, saying, “This fight is far from over.”

“Alligator Alcatraz was hastily erected in one of the most fragile ecosystems in the country without the most basic environmental review, at immense human and ecological cost,” she said.

Samples added that she is pursuing every legal avenue available to shut down Alligator Alcatraz.

Anthropic’s ‘Mythos’ model is extraordinarily dangerous. The company itself warned that it could autonomously identify and exploit zero-day vulnerabilities in every major operating system, every major web browser, and every critical software library on Earth. And because of this offensive cybersecurity power, Anthropic refused to release Mythos publicly – and instead tightly restricted access through ‘Project Glasswing’ to roughly 50 carefully vetted organizations – 12 named launch partners plus more than 40 additional critical software and government entities, including the U.S. National Security Agency (NSA).

Yet within hours of the limited rollout announcement on April 7, 2026, a small group of unauthorized users in a private Discord server had already broken in.

The breach, reported by Bloomberg on Tuesday, reveals how fragile the safeguards around frontier AI models can be. According to the report, the group gained access using a surprisingly low-tech combination: legitimate credentials from a third-party contractor involved in Anthropic’s evaluations, plus clever internet sleuthing to guess the hidden API endpoint by reverse-engineering Anthropic’s internal naming conventions (patterns inferred from an earlier Mercor data leak).

They have reportedly been using Mythos regularly for nearly two weeks. Sources emphasize the usage has been non-malicious so far – things like building simple websites – rather than launching cyberattacks.

“We’re investigating a report claiming unauthorized access to Claude Mythos Preview through one of our third-party vendor environments,” a spokesperson said in a statement, adding that there’s no evidence that the access went beyond a third-party vendor’s environment or that it is impacting any of Anthropic’s systems.

Project Glasswing

In early April, Anthropic launched Project Glasswing, a defensive cybersecurity initiative built around Mythos Preview. The 12 launch partners included Amazon Web Services, Apple, Microsoft, Google, Cisco, CrowdStrike, Palo Alto Networks, NVIDIA, Broadcom, JPMorgan Chase, and the Linux Foundation, along with over 40 additional critical software organizations. The explicit goal was to give these defenders a head start: let Mythos hunt for vulnerabilities in their own systems and major open-source projects before malicious actors could weaponize the same capabilities.

Anthropic’s own red-team testing reportedly showed Mythos could find and chain complex zero-days that had remained hidden for decades in software like Linux, OpenBSD, and FFmpeg.

Even as the Pentagon formally labeled Anthropic a “supply-chain risk” in March 2026 – citing the company’s refusal to remove ethical guardrails that would allow its models to be used for mass domestic surveillance and autonomous weapons – other key parts of the U.S. government have moved with urgency to embrace the very same technology. The National Security Agency is already actively using Claude Mythos Preview, while the White House’s Office of Management and Budget circulated an internal memo on Monday directing federal agencies to begin leveraging the model for vulnerability discovery in government networks. The Treasury Department has been particularly aggressive, rushing to secure access and convening major bank CEOs for urgent red-teaming sessions after being warned that Mythos could “hack every major system.” 

A Low-Tech Breach

The unauthorized access was deceptively simple. One member of the Discord group (a private forum focused on hunting unreleased AI models) had legitimate access as a worker at a third-party contractor. Using knowledge of Anthropic’s naming patterns, the group correctly guessed the private API endpoint for Mythos Preview on the very same day the limited release was announced.

Once inside, they continued using the model without triggering obvious alarms.

Anthropic said Mythos was too dangerous to release. Then four random guys in a Discord gained access on day one by guessing the URL…

This is pretty insane:
→ Group in a private Discord guessed the endpoint from Anthropic’s naming conventions
→ They figured out the… https://t.co/HUxd8pwqEH

— Josh Kale (@JoshKale) April 22, 2026

So, here’s where we are: these AI models are becoming so powerful that even their creators treat them with extreme caution – yet the operational security surrounding them can still fall to basic tactics like credential misuse and URL guessing.

As of Wednesday, Anthropic has offered no further updates on its investigation, no timeline, and no announcement of technical fixes such as credential rotation or endpoint randomization. There is still no public evidence of malicious use by the Discord group – however, the breach raises serious questions about how many other restricted AI systems might be leaking through similar third-party or supply-chain vulnerabilities.

Authored by Brayden Lindrea via CoinTelegraph.com,

Wall Street law firm Sullivan & Cromwell has apologized to a federal judge after submitting a court filing that contained around 40 incorrect citations and other errors caused by AI hallucinations.

“We deeply regret that this has occurred,” Andrew Dietderich, co-head of Sullivan & Cromwell’s global restructuring team, wrote Friday in a letter to Chief Judge Martin Glenn of the US Bankruptcy Court for the Southern District of New York.

“The Firm and I are keenly aware of our responsibility to ensure the accuracy of all submissions including under Local Bankruptcy Rule 9011-1(d), and I take responsibility for the failure to do so,” he said of an emergency motion filed nine days earlier.

Excerpt from Andrew Dietderich’s letter to Chief Judge Martin Glenn. Source: Sullivan & Cromwell

The incident highlights the risk AI tools can pose in high-stakes professional work without proper oversight. A database managed by legal technologist Damien Charlotin has recorded 1,334 incidents of AI hallucinations in court filings around the world, including more than 900 in the US.

Charlotin pointed out that most of these hallucinations involve fabricated citations, though AI-generated legal arguments have also occasionally been identified.

Dietderich said Sullivan & Cromwell has policies in place for the use of AI tools, which include a review of the citations it uses, but said the policies weren’t followed.

“Regrettably, this review process did not identify the inaccurate citations generated by AI, nor did it identify other errors that appear to have resulted in whole or in part from manual error.”

Sullivan & Cromwell is one of the largest law firms in the US by revenue, ranking 30th on the AmLaw Global 200. The firm also represented crypto exchange FTX in its bankruptcy case.

Sullivan & Cromwell is conducting an internal investigation

Dietderich said the law firm took “immediate remedial measures,” including a full review of the circumstances that led to the errors. 

The firm is also “evaluating whether further enhancements to its internal training and review processes are warranted,” Dietderich said.

Dietderich also noted that the errors were spotted by a rival law firm.

“I also called Boies Schiller Flexner LLP on Friday to thank them for bringing this matter to our attention and to apologize directly to them as well,” he said. 

In a new note out by Canaccord, the firm reiterates its BUY rating on USA Rare Earth and raises its price target to $32 from $29, arguing that the company is rapidly emerging as a cornerstone of a Western rare earth supply chain at a time when geopolitical urgency around reducing dependence on China is intensifying. Shares are already up about 50% over the past week and currently sit around $25:

The analysts frame the industry as a kind of “strategic chess match,” with the U.S. racing to build domestic and allied capacity, and position USA Rare Earth as one of the few companies attempting to build a fully integrated, end-to-end platform spanning mining through magnet production.

The centerpiece of the note is the company’s planned $2.8 billion acquisition of Serra Verde in Brazil, which Canaccord describes as a “tectonic” move. The asset includes the Pela Ema operation, currently the only scaled producer outside Asia of all four key magnetic rare earth elements—neodymium, praseodymium, dysprosium, and terbium.

As we noted days ago Serra Verde’s asset is especially valuable because it can supply key magnet materials—neodymium, praseodymium, dysprosium, and terbium—which are critical for high-performance permanent magnets. The mine is also backed by a long-term offtake agreement tied to U.S. government-related entities, covering 100% of production for those four elements.

Beyond simply adding volume, the deal gives USA Rare Earth meaningful exposure to heavy rare earths, which are the most supply-constrained and strategically valuable parts of the market. By 2027, Serra Verde is expected to represent more than half of non-China heavy rare earth supply, making it arguably the most important Western asset in the space.

Canaccord emphasizes that the acquisition is not just about scale but about accelerating the company’s path to profitability and securing feedstock for its downstream magnet ambitions. The combined company would span the full value chain—from mining at Serra Verde and Round Top, to separation through Carester, to metals and alloys via Less Common Metals, and ultimately to magnet manufacturing in the U.S.

The firm sees this vertical integration as critical to competing with China, which still dominates roughly 70% of mining and over 90% of processing and magnet production globally.

A major highlight of the note is the 15-year offtake agreement tied to Serra Verde’s Phase 1 production, which is backed by a special purpose vehicle funded in part by U.S. government entities. This agreement secures 100% of initial output and, importantly, includes price floors for both light and heavy rare earths—around $110/kg for Nd/Pr, $575/kg for dysprosium, and $2,050/kg for terbium.

Canaccord views this as a first-of-its-kind structure that effectively de-risks revenues while still allowing USA Rare Earth to capture upside if market prices exceed those levels. The analysts estimate the contract alone could generate more than $346 million in annual revenue from magnetic rare earths under floor pricing assumptions, with additional contribution from other elements like yttrium.

Financially, the note points to a dramatic inflection ahead. Revenue is projected to scale from essentially negligible levels today to over $1 billion by 2027 and roughly $1.3 billion by 2028, with earnings turning positive as early as 2026. Serra Verde is expected to be a major driver, potentially generating around $600 million of EBITDA by 2027 under an oxide production scenario, with total company EBITDA reaching as much as $1.8 billion by 2030.

The analysts also highlight a strong pro forma liquidity position of roughly $3.2 billion following the transaction and associated government support, which should help fund the buildout of the broader platform.

Stepping back, Canaccord’s core argument is that USA Rare Earth is transitioning from an asset aggregation story to an execution story, having assembled what it views as a unique portfolio of strategically important assets across multiple continents. While the firm acknowledges there is still significant operational work ahead to bring these assets fully online, it sees meaningful upside as production ramps, margins expand, and the company solidifies its role as a primary Western supplier of both light and heavy rare earth materials.

The full note is available at the usual place for Premium subscribers. 

By Michael Every of Rabobank

Our central assumption for the Iran war had been that by end the third week of April at latest, the Iranian regime faction willing to make a deal in line with Trump’s tweets would have asserted itself over those who won’t, Hormuz would slowly reopen, and energy markets gradually normalise.

As neither the Iranian nor US negotiating teams traveled to Pakistan for the second round of peace talks yesterday, that cannot happen. Our new geopolitical base case is of an extended closure of Hormuz (in the range of 2-4 weeks). However, the likelihood of escalation to achieve that de-escalation is very high, which risks more energy supply damage.

Trump just unilaterally and indefinitely extended the ceasefire, “based on the fact that the Government of Iran is seriously fractured,” which the Iranians didn’t request, but Pakistan did. In the Middle East, making a threat and not following through smacks of weakness, and will be noted (again) by Tehran’s hardliners. He added US attacks would be held off “until such time as their leadership and representatives can come up with a unified proposal.” That’s as a Saudi tweet claimed Ghalibaf and Pezeskhian, willing to negotiate with Trump, have been arrested by the IRGC.

If true, that points to a unified Iranian position of defiance. That would then require a US response – either an attack or a 1956 Suez Crisis retreat. Of course, Iran may be incapable of a unified answer until its factions turn on each other (which is likely part of the US strategy) – that would also suggest the need for a US attack, to ‘shake the box’. Or this ceasefire extension can be a US deception as its forces continue to fly or sail into the region.

Meanwhile, the US economic blockade of Iran and the de facto Iranian blockade of Hormuz remain in place: critical energy and goods are not going to flow for longer, with exponentially rising economic damage. Indeed, the US says it will ramp up Operation ‘Economic Fury’ at sea and via sanctions. Iran claims it will break its blockade by force, if it persists, which would of course lead us straight to an escalation again.

Importantly, the threat of an extended throttling of Hormuz will increase the global pressure to act. On one hand, US allies might do something, though this seems unlikely. On the other, China may have to given it has already stated it wants Hormuz to reopen.

Looked at like this, there is nothing for markets to savor about a ‘chicken TACO Tuesday’. Indeed, screen oil prices only softened a little in response to the US ceasefire extension, and the price of physical oil and products in Asia will continue to rise unless Hormuz reopens.

Yet it’s undeniable the extended ceasefire also points towards a true TACO, which we’ve long made clear would be a geopolitical earthquake on par with the 1956 Suez Crisis. Were that to occur, it might be bearish for energy but could leave Iran in charge of Hormuz, which is less so; or Israel in charge of removing Iran from Hormuz, so far less so. Moreover, it would be it would be bearish for lots of assets markets don’t yet envision.

This is as Trump says a proposed currency swap with the UAE — which is pegged to the dollar– is under consideration, with some suggestions China will step in if not. That such an economy might need a dollar facility says a lot about the new world (dis)order that is emerging.

In parallel to Iran, Israel and Hezbollah’s ceasefire is holding on by its fingernails. Lebanon’s PM says his government will not let Hezbollah “intimidate us” – which lack of government actions shows it clearly does; and top US senators are calling to halt aid to Lebanon’s army over its failed Hezbollah disarmament efforts.

Things are also fluid –but not flowing– on other geopolitical fronts. Zelenskyy stated the Druzhba oil pipeline will be ready to ship Russian oil again – as Russia halted Kazakhstan’s oil flows to Germany via it, worsening its energy crisis.

The €90bn EU loan to Ukraine may now proceed, with Kyiv expected to spend the bulk of it on US Patriots, UK Storm Shadows and its own drones – which will be used to hit Russian oil refineries based on the recent heuristic. Yet Ukraine is reportedly proposing naming part of the disputed Donbas region to ‘Donnyland’ in Trump’s honor, not Von der Leyen-land.

At the same time the EU is trying to ease new tensions with Turkey, which also hosts energy pipelines leading to it, after VDL used a media interview to name the EU neighbour alongside Russia and China as threats to Europe requiring Brussels to ‘Complete the continent.” To paraphrase Oscar Wilde, “To lose one key NATO ally may be regarded as a misfortune; to lose two looks like carelessness.”

Meanwhile, as the Middle East and Russian energy complexes are mired in war, a key trader warns of a looming global food shock due to a squeeze on fertilizers; the EU is looking to revive joint gas buying as energy fears mount, which critics say will make little difference; Brussels said we should keep flying despite a looming fuel shortage as “Fears of widespread cancellations are overblown” – as Lufthansa axed 20,000 ‘unprofitable’ flights to save jet fuel; and EU lawmakers urged the Parliament to halt its monthly trip to Strasbourg over energy costs.

So, to central banks. See our US strategist Philip Marey’s take on Fed Chair nominee Warsh’s Senate confirmation hearing here, but note he had a tough time, reflecting how much political economy has shifted in the past few years. (Recall “Maestro’ Greenspan, anyone?)

Senator Warren called Warsh President Trump’s “sock puppet.” Then there were a series of questions over Warsh’s wealth, and the extent to which it was tied to Trump, Druckenmiller, China, or Epstein. That’s before we got to actual central banking, which was also disputed.

Warsh had to underline that he backs Fed independence. Yet he thinks interest rates rather than the balance sheet should be the dominant tool of monetary policy, because the distributional effects of the latter favoured the rich, while the more pervasive effects of the former reached everybody. That statement undoes most of the post-GFC central bank strategy.

Warsh also said he wants to work with the Treasury Secretary to see how the Fed can reduce the balance sheet and get out of fiscal policy. That’s as the Pentagon budget is about to increase by 40% and the Treasury is extending its reach into other areas as part of US economic statecraft.

Moreover, while there was some Q&A around the impact of the Iran war on inflation, there was no revealed view on how the Fed can keep CPI low if physical supply constraints matter, from oil to AI to the military; nor what to do if those constraints extend into the geopolitical realm, both in terms of freely-perceived problems and politesse-free solutions. Saying ‘That’s not my job,’ is not how economic statecraft works.

There was also a short discussion of crypto, which Warsh backed: and US dollar stablecoins are potential US economic statecraft, as we have previously explained. Yet there were no questions about political swaplines, perhaps because the Treasury is also muscling in on that territory of late(?)

Oil prices are modestly higher this morning, erasing overnight losses on Trump’s ‘ceasefire extension’ after Iran attacked three ships in the Strait of Hormuz.

While headline roulette continues to drive oil prices incrementally, this morning’s inventory/supply data from DOE will provide some color on how the

API

• Crude -4.5mm

• Cushing +700k

• Gasoline -5.2mm

• Distillates -4.6mm

DOE

• Crude +1.925mm

• Cushing +806k

• Gasoline -4.57mm – 10th weekly draw in a row

• Distillates -3.43mm – 4th weekly draw in a row

Crude stocks unexpectedly saw a build last week (after a draw the week before) as did Cushing inventories. However, on the product side, the sizable drawdowns continue…

Source: Bloomberg

Since the war started, Crude stocks have risen significantly, while gasoline inventories have seen non-stop draws…

Source: Bloomberg

Weekly US implied gasoline demand is holding up despite elevated prices. The 4-week moving average indicate a slight rise of 32,000 barrels per day, while the more volatile weekly data series ticked down by 33,000 barrels per day. Meanwhile, US average gasoline prices remain above $4 a gallon. It was near $3 a gallon right before the Iran war. 

Source: Bloomberg

The crude inventory build was more than offset by a huge 4.14mm barrel drawdown from the SPR…

Source: Bloomberg

US crude production dipped once again…

Source: Bloomberg

Notably, total US oil product exports accelerated to a new record high last week…

Source: Bloomberg

WTI is holding gains for now, near yesterday’s highs around $92…

Finally, as The Wall Street Journal reports, analysts and commodities trading company executives are expressing shock at what they call a disconnect between market pricing and reality.

Prices of the most-active Brent futures contract are holding below $100 a barrel despite escalating tension in the Strait of Hormuz and the cancellation of U.S.-Iran peace talks. Just today, two attacks on ships in the waterway showed that the fight for control of the strait continues and spooked shipowners and crew members. Here’s what I’m hearing from experts and industry leaders at the Financial Times Commodities Global Summit in Lausanne, Switzerland:

“The lack of price discovery that we are seeing is so worrying to me, because in reality we are storing up a bigger problem for the future,” said Amrita Sen, founder and director of market intelligence at Energy Aspects. Price discovery refers to the process of buyers and sellers determining the fair price of a good or an asset in the futures market.

“Futures prices are meant to do the job of giving signals to sort out supply and demand. We are doing the opposite,” she said in a panel.

In 2022, when Russia invaded Ukraine, the market didn’t experience nearly as large a physical disruption as this time, and yet oil prices went much higher and stayed between $110 and $125 a barrel for months, said Saad Rahim, chief economist at Swiss commodity trader Trafigura, at the conference yesterday.

“This time, the scale seems to be something where the market cannot get its head around it, and therefore it says, we are not going to think about it.”

The world is already losing an average of 10 million barrels a day of crude oil and 5 million barrels a day of oil products. Hits to the world’s supply of fertilizers and chemicals are also severe.