The game between Iran and the U.S. is becoming more intense.

Iran has been offline for over a month, with international data traffic reduced to only 1%-3% of pre-war levels. Black market Starlink devices are being sold at sky-high prices, and the government is cracking down hard—arresting anyone caught. Food inflation has doubled, and ordinary people are spending more than half of their monthly income on food. Public services like water, electricity, healthcare, and communication are intermittently cut off, forcing people to endure.
The biggest variable now is Hark Island. It’s the lifeline of Iran’s oil exports, responsible for 90% of the country’s oil shipments annually. If the U.S. military takes it, Iran’s fiscal revenue will be cut in half. The island is guarded by the Revolutionary Guard, with mines and bunkers ready. On-chain betting indicates a 40% chance of the U.S. taking the island, suggesting that most people are not optimistic.
Meanwhile, the Strait of Hormuz has been sealed again. Over the past month, a dozen Chinese merchant ships have passed through, while hundreds are stranded in the Persian Gulf, unable to leave. Iran claims “friendly countries can navigate,” but in practice, they are releasing ships gradually, and recently, they’ve completely shut it down. They want to push oil prices higher and pressure U.S. inflation.
Houthi forces have also come out in support, launching missiles at Israel. While their military threat isn’t significant, blocking the Strait of Mende is their real trump card. Coupled with cheap drones, from a strategic deterrence perspective, it’s comparable to nuclear weapons.
Two other small updates: Iran’s missile attack damaged the UAE’s largest aluminum plant, affecting 4% of global capacity, which could impact aluminum prices; last week, Turkey’s central bank sold $8 billion worth of gold.
Both sides now believe they are winning, but the reality is that the situation is still escalating. The next one or two weeks will be a critical window. Oil prices could surge to $120.