Trump claims Strait of Hormuz as US territory; Iran vows closure

Tensions between the United States and Iran have escalated following statements from President Donald Trump and Iranian military official Mohsen Rezaei. Trump claimed the Strait of Hormuz as “new US territory” on Truth Social, while Rezaei declared that the strategic waterway will remain closed until the U.S. alters its behavior. This development has added significant uncertainty to the already strained US-Iran diplomatic relations, impacting market perceptions regarding an imminent agreement to restore normal traffic through the Strait. Markets appear to interpret these statements as decreasing the likelihood of a US-Iran agreement by August 31. The probability of reaching an agreement, as reflected in the Polymarket odds, has dropped from 3% to 2.5% for the August 31 deadline over the past 24 hours. The impact of these announcements is further amplified by the market’s reaction to past similar statements by Trump, which have also contributed to a decrease in perceived chances of a diplomatic resolution. The continued closure of the Strait of Hormuz could have significant geopolitical and economic implications, particularly if it affects global oil shipments. Both the U.S. Central...