A brief discussion on the situation in the Middle East. First, here in the Middle East, U.S. Vice President Vance stated that the U.S. has not engaged in a full-scale war with Iran, but has targeted Iran's nuclear program and destroyed some facilities. Trump wants to take this opportunity to reshape relations with Iran, but the bottom line is to prevent Iran from developing nuclear weapons. Trump also stated that if the current Iranian government cannot make Iran great again, then why can't a regime change occur? However, this time it seems more like pressure; he probably wants to use external strikes combined with internal chaos to make the Iranian regime collapse on its own. But currently, the Iranian opposition lacks armed forces, so overthrowing the regime in the short term is unrealistic. However, the Iranian parliament has approved the closure of the Strait of Hormuz, but the final decision is in the hands of Iran's Supreme Leader Khamenei. It is estimated that Khamenei will be more cautious, as blocking the strait would also deal a heavy blow to Iran's own oil exports and worsen the domestic economy.

The Strait of Hormuz is also the artery for transporting a quarter of the world's oil and 30% of liquefied natural gas. If it is truly blocked, oil tankers will not be able to leave, and oil prices will certainly soar. Oil prices have already risen 35% from the low in April. JPMorgan predicts that if the conflict escalates further, oil prices could reach $120-130 per barrel. However, it is not easy for Iran to completely block the strait, as this concerns the interests of most countries. So in the end, it will probably result in no substantial outcome.

Once Iran's attitude on this front eases, although it will still be unavoidable to escalate the conflict, it will also provide a breather for the market. In short, whether it is Iran or Trump, any slight easing of the tense situation will certainly lead to an effective rebound in the market.