CITIC Securities: Current US-Iran Deadlock Faces Potential Risk of Prolongation

CITIC Securities’ research note notes that recent renewed U.S.-Iran tensions have disrupted the situation. The firm argues that fundamental flaws in the U.S.-Iran Memorandum of Understanding (MOU) have led to difficulties in its implementation, and the current impasse between the two sides carries potential long-term risks. The situation remains stuck in a cycle of failed stable agreements, intermittent military clashes, and periodic disruptions to navigation in the Strait of Hormuz. Market expectations generally hold that this year’s U.S. midterm elections will constrain the Trump administration’s military actions, but CITIC Securities believes that as the likelihood of the Republican Party losing control of the Senate continues to decrease, pressure on the administration over issues including the Supreme Court, impeachment investigations, and election disputes will be limited, meaning the market may have overestimated the midterms’ impact on the Trump administration’s actions.