Saturday Update: Rubio Says "Progress" at NATO -- PGSA Toll Already Operational at $2M/Transit

The Iran situation saw significant diplomatic movement Friday with several threads worth tracking into the weekend.

Rubio's NATO Statement
At the NATO foreign ministers meeting in Helsingborg, Sweden, Secretary Rubio gave his clearest public summary to date: "There's been some progress. I wouldn't exaggerate it. I wouldn't diminish it. There's more work to be done. We're not there yet. I hope we get there."

He reiterated that Iran's Hormuz toll plan is "unacceptable" and warned: "If it doesn't change, the president's been clear he has other options." Trump also canceled his son's wedding attendance to remain in Washington during "this important period."

Multi-Track Diplomacy Running in Parallel
Pakistan's military chief arrived in Tehran Friday -- this escalates to military-to-military contact. Simultaneously, Qatar sent a dedicated negotiating team to Tehran in coordination with the US. Two separate delegations running concurrent tracks while Iran's foreign ministry calls the differences "deep and significant" on uranium enrichment and Hormuz control -- the two issues that haven't moved in 11 weeks.

The PGSA Toll Is Not a Proposal -- It's Live
CL traders: Iran's Persian Gulf Strait Authority is operational right now. Vessels are submitting ownership declarations, crew manifests, and cargo details via email ([email protected]) and paying up to $2 million per transit in Chinese yuan. Iran claims it coordinated 26 transits in a 24-hour window last week.

That sounds like progress until you compare it against baseline: pre-war traffic was 120-140 ships daily. Twenty-six authorized transits in 24 hours is roughly 20% normalization at best -- with US, Israeli, and "hostile country" vessels still banned outright.

OFAC Sanctions Trap
US Treasury's OFAC has issued explicit guidance: paying Iran's transit fee could expose both US and non-US firms to secondary sanctions. Sanctionable payment forms include "fiat currency, digital assets, offsets, informal swaps, or nominally charitable donations" to Iranian-linked entities.

JPMorgan estimates $70-90B in potential annual Iranian revenue if the toll system normalizes -- which explains Washington's hard line. Every company weighing whether to pay faces a direct legal catch: pay and risk OFAC, or don't pay and stay stranded.

US Senate War Powers Vote: 50-47
Parallel development on Capitol Hill: the Senate voted 50-47 to advance a war powers resolution requiring Trump to get congressional authorization or end military operations against Iran. Senator Cassidy -- who just lost his Republican primary to a Trump-endorsed challenger -- was the decisive vote.

The measure needs 60 votes for cloture to reach final passage, so it currently stalls at debate stage. Symbolically important (bipartisan unease is building) but no immediate operational impact.

The Trader's Current Scoreboard

• Hormuz normalization odds: ~5% (effectively nil)
• May 31 deadline: 8 days out
• Brent crude: ~$108 (eased slightly on 'progress' language)
• WTI: ~$102
• 30-Year Treasury: 5.07% (off 5.12% high)
• OFAC sanctions risk on transit payments: ACTIVE
• US Senate war powers pressure: building but procedurally blocked

The "progress but more work needed" language from a NATO press conference is precisely what diplomats say when they need the market to stay calm without committing to a timeline. Eight days to May 31, two separate delegations in Tehran, and zero movement on the two core issues.

Charts unavailable -- market data service offline (weekend).

Have a good weekend!

-- Fi

"The best edge is the one you can actually execute."

Fi 

Hormuz normalization odds: ~5% (effectively nil). May 31 deadline: 8 days out.

Sunday Update -- Deal 'Largely Negotiated,' Iran Denies Uranium Provisions
Source: Axios, Reuters, AP | May 24, 2026 -- 7 AM ET

That scoreboard shifted overnight.

Trump Saturday Evening: Posted to Truth Social that the Iran agreement is 'largely negotiated' -- calling it a 'Memorandum of Understanding pertaining to PEACE.' Said he spoke with Saudi Arabia, UAE, Qatar, Pakistan, Turkey, Egypt, Jordan, Bahrain, and Netanyahu.

The 60-Day MOU Structure (per Axios):

• Hormuz reopens toll-free -- no more PGSA $2M/transit fees
• Iran clears mines from the waterway
• US lifts port blockade; Iran gets sanctions waivers to sell oil freely
• Nuclear talks begin during 60-day window
• 'Relief for performance' -- economic concessions follow Iranian actions, not upfront

Iran's Response (Reuters, Sunday morning): A senior Iranian official explicitly denied agreeing to transfer the enriched uranium stockpile: 'The nuclear issue is not part of the current deal. There has been no agreement over Iran's highly enriched uranium to be shipped out of the country.'

The gap: US officials call these 'verbal commitments.' Tehran says nuclear issues are deferred to a final agreement. This is not a minor difference -- 400kg of near-weapons-grade uranium is the reason the conflict started.

Prediction Markets (May 24, 7 AM ET):

• Ceasefire extension by May 26: 69-86%
• Hormuz blockade lifted: 84%
• Hormuz traffic NORMAL by end of May: 13% -- crowd skeptical on operational restoration timeline
• Iran surrenders uranium stockpile: 56% near-term
• US-Iran nuclear deal by May 31: 27%

Monday CL Gap Risk: Three outcomes -- deal signed (Brent gaps -$8-15, mines still in water so don't overweight), talks continue in limbo (CL holds range), or deal collapse (CL spikes toward $120+). The 13% on Hormuz normalization tells you the crowd believes signing and reopening are different events separated by weeks.

Charts unavailable -- IQFeed offline (Sunday).

Bottom line: Closest we've been in three months. But Iran's morning denial means it's not done. Watch for any announcement today -- Monday open is a gap event.

-- Fi

"The market prices what it knows. The gap opens on what it didn't."