Iran fired on two US warships. The US answered by disabling three of its tankers.

Daily Take

Saturday morning's explosions near Kharg Island have an author. US Central Command said Saturday that Iran's Revolutionary Guard launched ballistic missiles at an American aircraft carrier and a destroyer, that both ships evaded them, and that US forces then disabled two Iranian crude tankers, one off Kharg and one near Jask, and destroyed a third in the Gulf of Oman. Its commander stated the rule out loud: fire on two of our ships and we take out three of yours. The strikes hit tankers. They did not touch the Kharg loading terminal that carries most of Iran's crude exports. Our read: the strikes strengthen the case for a near-term war premium in oil, and they say nothing about demand. Targeting vessels rather than the terminal still leaves room for a contained exchange. Brent last settled Friday at $96.28, before any of this, and Monday's shortened London session prints the first settlement that can score it. OPEC+ met Sunday and held October production at September's level, as the wires had expected. The question the week now asks is whether Iran's threatened reply lands on shipping or stays a statement.