From Jennifer Jacobs at CBS News:

The Iranian response to the U.S. peace proposal is expected later today, sources familiar with the matter told Marg Brennan and me. President Trump and top White House officials have been told that Iran’s counter-proposal would likely arrive Friday via interlocutors.

It will be interesting to see if this gets published.

I wonder if there is a path ahead where Iran gives up its nuclear materials for security guarantees and reopening Hormuz. That’s a pretty small ask from Iran and Trump may still be able to describe it as a win.

Trump and his deputies in yesterday’s cabinet meeting heavily leaned on the nuclear messaging, saying that the goal of the mission in Iran was to prevent them from getting nuclear weapons. If they can say they decisively achieved that goal via the return of Iran’s nuclear material, then they can walk away without damaging the global economy too much.

Key to making it work might be dropping sanctions on Iran. From Iran’s side this could be seen as ‘reparations’ but it would have little cost to Iran.

On net, I put the probabilities of that outcome in the short term as low. What is clear is that Trump doesn’t still want the Strait closed in May while markets struggle. For Iran, the longer they keep it closed, the more leverage they have.

Alternatively, the US may escalate and Iran could see the threat to is electricity as a particularly large threat to the regime in general. If that’s the case, they may settle for much less and could be eager to make a deal, as Trump stresses.

For now, the market is bracing for more fighting rather than serious negotiations. That has WTI crude oil up $3.56 to $98.04 today and brent above $110. That’s not yet ‘shortage’ pricing but if the blockade lasts another month, we will surely get there and that means much higher oil prices.

This article was written by Adam Button at investinglive.com.