It's been clear for a while that total liquids volumes (crude, condensate, NGLs) out of the Middle East (SoH + bypasses + GoO) have been on a steady upwards trajectory. Pre-war numbers were ~22-23 MBD, so we're currently at ~80% of pre-war liquids flows. I've talked about this before, but liquids volumes are only one element of the overall picture: • Brent prices are still > $100/B (in no small part due to hugely expensive freight) • Product prices are very elevated, especially diesel (not only because of expensive crude, but also because of a shortage of refining capacity that's pushing crack spreads to all-time highs) • Non-liquids products (like LNG) passing through the SoH have seen nowhere near this type of volume recovery (although those flows are starting to slowly tick up) • Strategic reserves are at all-time lows (in some cases) Having said that, there are several questions that need answers: • What is the Iranian strategy here? Are they incapable of controlling the SoH or are they content with the status quo playing out over time because they see it to their long-term advantage? If the former, is it due to an erosion of their targeting capacity, improved US protection for ships passing through the Southern Omani corridor, or an improvement in vessel stealthiness (or all of the above)? I know that Iran continues to try and hit vessels in the SoH, and have potentially hit several in the past week (total number in dispute), but it doesn't seem to be having the type of deterrent effect it used to have earlier in the war. If the latter, is the thought that even with liquids flows returning slowly to near pre-conflict levels, what matters more is the elevated price point of crude and products, the resulting inflation we're starting to see globally, the increase in US interest rates (partially as a result of that), the very likely wipeout for Republicans during the mid-terms that could see Democrats take over the House and Senate and drag Trump into protracted impeachment proceedings? • It's clear that the US blockade on Iran is having an effect on the Iranian economy, but how significant is that relative to Iran's pain tolerance? • How sustainable is the US military deployment in the Gulf to provide protection to ships passing through the SoH? This is a hugely expensive endeavor. Is the plan to seriously continue to do this for months? Years? It seems like a temporary solution at best, but who knows. It's unclear who will blink first at this point (whereas it was clear earlier in the war that Iran had a strong advantage and forced the US to sign a very Iran-favorable MoU, it's not 100% clear now), but it does feel like this war could drag on for a long time, with no clear resolution in sight.