Extremely bad news if you’re not in the VIP line (Getty Images)

The emerging 2-tier system for moving oil through dangerous waters

The road less traveled, or the waters more mined.

If you’re looking to move oil through the Persian Gulf, best be a nation that’s friendly with Iran — and willing to take the road less traveled.

Natasha Kaneva, head of global commodities research at JPMorgan, notes that at least four ships have taken an unusual route in between two islands to pass through the Strait of Hormuz.

These unusual circumstances “could reflect a process designed to confirm vessel ownership and cargo, enabling passage for ships that are not affiliated to the US or its allies,” she wrote. “In practice, this creates a system in which the Strait is not formally closed, yet transit increasingly depends on political understandings with Tehran.”

Kaneva believes that China, India, Pakistan, and Turkey have “the best chance of preferential access.” Most of these countries get from roughly 40% to 55% of their imported crude through this waterway, with Turkey an outlier at less than 10%, per JPMorgan.

Effectively, it seems as though Iran has set up VIP access (or a special customs checkpoint, if you will) for oil in transit, while the US aspirationally aims to have a coalition to establish another, more fraught lane through waters that may be mined and subject to drone attacks.

Expectations for how high oil prices will climb this year have moderated somewhat this week, with prediction markets suggesting $135 for front-month West Texas Intermediate as the most likely 2026 peak.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

Sustaining this backdrop would likely entail some but not a full improvement in the global flow of oil through this important choke point. But to call this a fragile equilibrium would be an understatement.

Iran has demonstrated leverage over the flow of oil through the strait through its ability to harry vessels. US President Donald Trump, in turn, has shown the willingness to display America’s potential leverage over Iran’s oil export capabilities through attacks on Kharg Island, which handles about 90% of the country’s oil exports. Crucially, the US hit military sites, rather than energy infrastructure, in its initial strikes on the island.

Nvidia keeps giving Wall Street everything it wants — without getting rewarded

Yet another case of good financial news from Nvidia failing to generate an enduring positive reaction.

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Matt Phillips1h

Oklo surges after receiving approval for next phase in the construction of its first reactor

Revenue-free retail favorite Oklo is up in early trading after announcing regulatory updates on its first product, a reactor it calls Aurora, which it has started building at the US Energy Department’s primary nuclear energy research and development center, the Idaho National Laboratory.

Oklo announced that it signed an “other transaction agreement” (OTA) with the Department of Energy early Tuesday. (OTAs are typically used by the federal government to enter into research, prototyping, and production deals with private entities outside of the typical procurement processes.)

Oklo also announced that the DOE’s Idaho Operations Office also signed off on a preliminary safety design review for the reactor, which is expected to be completed sometime in late 2027 or 2028. The company broke ground on the project in September.

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Given the close involvement of the federal government in the development of nuclear power plants, Oklo’s close ties to the Trump administration have been seen as an important advantage for the company — but have also drawn scrutiny and criticism.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

Oklo Announces U.S. Department of Energy Approval for Nuclear Safety Design Agreement of Aurora Powerhouse at Idaho National Laboratory

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

J. Edward Moreno2h

Eli Lilly receives its only sell rating as HSBC downgrades, citing smaller market for weight-loss drugs

Eli Lilly slipped in early trading after analysts at HSBC gave the pharmaceutical darling at the center of the obesity drug boom a rare downgrade.

Analysts at the bank cut their rating to “reduce” from “hold.” They cut their price target to $850 from $1,070. The stock closed at $989 on Monday.

“We think Lilly shares are priced to perfection, are uncomfortable with working capital trends, and think medium-term earnings trends are optimistic,” the analysts said.

According to Bloomberg, this is the only sell rating on Lilly among the 38 analysts who cover the stock.

The company has rallied more than 20% in the past year as its obesity drug sales continue to rise, far outpacing its top rival, Novo Nordisk.

But the space is getting increasingly crowded with new entrants and new products from Lilly and Novo, putting downward pricing pressure on their products. HSBC noted that the emergence of cash-pay channels for their drugs makes them subject to economic cycles and seasonality.

And while the introduction of oral options has expanded the market, HSBC analysts said they think “the compliance and persistence of these drugs might disappoint.”

“Whilst the momentum in the launch might be positive, we think oral drug launch expectations for Lilly are too high,” they said.

Max Knoblauch

Delta, American, and rival airlines boost Q1 sales outlooks on strong demand; costs rise, too

Airlines are soaring as they say revenue is coming in higher than expected in the first quarter. That’s likely in part because they’re raising ticket prices to account for higher fuel costs.

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Nebius drops after announcing that it aims to raise $3.75 billion in a convertible loan offering

Nebius dropped as much as 7.5% in premarket trading on Tuesday, after the AI infrastructure company announced its intentions to sell $3.75 billion worth of convertible senior notes with maturities in 2031 and 2033.

The company will offer the debt in two tranches, the first batch worth $2 billion and due March 15, 2031, followed by $1.75 billion worth of notes due March 15, 2033. There’s also the potential for an additional $562.5 million of these notes to be issued via an over-allotment option.

The interest and initial conversion rate will be determined at the pricing of the offering, but regardless of the premium, a $3.75 billion offering would be pretty sizable for a company that closed yesterday’s trading session with a ~$33 billion market cap, and the market is quickly pricing in a decent chunk of equity dilution.

The offering is conspicuous in its timing, with Nebius soaring 15% yesterday on the back of a major infrastructure deal with Meta — worth up to $27 billion over five years.

The funds will likely be put to good use to deliver on some of these major projects. Per the company’s press release, the capital raised will be used to:

“...finance the continuing growth of its business, including expenditures related to the construction and build-out of its data centers, investments to develop its full-stack AI cloud, the expansion of its data center footprint and the procurement of key components (including GPUs), and for general corporate purposes.”