OIL WATCH

JPMorgan and Goldman See Mideast Oil Flows Near Pre-War Levels

(…) Shipments of crude oil have rebounded to 17.5 million barrels a day, or 98% of pre-war levels, while flows of products such as diesel and gasoline were at 3 million barrels a day, or 58%, according to JPMorgan. (…)

Flows through Hormuz have almost “returned to late-June highs of nearly 13 million barrels a day, led primarily by Saudi Arabia,” JPMorgan said. “But higher crossings should not be mistaken for improved safety — rather, they reflect the industry’s increasing ability to operate under sustained risk.”

Goldman Sachs, meanwhile, said oil exports from the Persian Gulf — including so-called dark flows moved clandestinely — had recovered to 23.3 million barrels a day over the last week, a level in line with the 2025 average. (…)

This month, Treasury Secretary Scott Bessent said 17 million barrels of oil a day “sometimes” transited, while TotalEnergies SE Chief Executive Officer Patrick Pouyanne saw 10 million barrels a day of crude and products getting out. (…)

Why Is Oil at $100 If Trump Is Winning the Battle in Hormuz?

(…) Crude oil exports from regional US allies via the waterway, plus bypass routes, have risen to about 80% of prewar levels. Iran, meanwhile, has seen its own oil exports plunge to zero. (…)

Many in the oil market think Trump has been so successful at opening Hormuz that a cornered Tehran would have no other option but to escalate militarily. If attacks on tankers — which still happen daily — aren’t enough to close Hormuz, then Iran would have to go after the source of the shipments: ports, pipelines and, ultimately, the oilfields themselves. (…)

Iran now faces two choices: Either it softens its negotiating position, or it escalates in a way that renders Hormuz irrelevant. The oil market is convinced Iran will choose the latter.

The clock is ticking for Tehran to decide because every day its economy deteriorates further under the American economic blockade.

What’s clearer is that the oil market would be more vulnerable to renewed conflict now than back in March because the US and its allies have already used significant chunks of their strategic reserves and commercial stockpiles of crude and refined products have fallen.

But Trump has demonstrated he has a higher threshold for economic punishment than many, myself included, had expected. Presumably he’s willing to absorb still more pain to force the hand of the Islamic Republic. (…)

Excluding Iranian exports, the countries on the shores of the Persian Gulf were exporting just over 17 million barrels of crude a day before the war broke out on Feb. 28. (…)

Oil bulls remained incredulous about the flows and suggested the US government was inflating the numbers. But over the last few weeks, most have accepted that Hormuz is witnessing a huge tanker flow. Last week, crude shipments rose to a six-month high of 14 million barrels a day, according to Vortexa, an energy markets analytics firm. Other tanker trackers, oil traders and government officials have arrived at similar figures.

The convoys have a huge cost. Putting aside the military expenses, chartering the supertankers costs an average $30 million per crossing, equal to roughly $15 per barrel. To make the convoys work on pure economics, Persian Gulf nations must discount their crude, at times by $20 to $30 below market levels, just to get traders into the game. Is that sustainable? Not likely. (…)

Shipments of gasoline, diesel and jet fuel remain at 50% of normal. The reason? Moving refining products is more expensive than moving crude. On top of that, some of the refineries inside the Persian Gulf that were attacked in the early days of the war have yet to resume operations fully.

Put it all together and the oil market is in wait-and-see mode: Either Iran comes to the negotiation table and prices decline a lot; or Tehran escalates attacks on physical energy infrastructure, sending prices a lot higher. Whatever happens, the status quo isn’t sustainable. That’s the price of winning in Hormuz.

Windward’s assessment:

Is Iran Losing Its Grip on Strait of Hormuz Traffic?

Iran has demanded that all Strait of Hormuz transits use the northern corridor through its territorial waters. Rising volumes of Saudi, Iraqi, and Kuwaiti crude, along with UAE volumes that cannot reach Fujairah by pipeline, are instead moving through the southern corridor, which remains under USCENTCOM air defense and naval support.

Windward MIOC assesses that Iran is less able to constrain southern-corridor traffic than it was in mid-summer, as rising crude flows continue despite the threat to individual vessels.

Windward recorded 55 AIS-visible transits from 16 to 23 September, about 94% below pre-war traffic of roughly 910 a week. That count combines AIS detections with at least one satellite imagery pass per day, meaning the true number of transits is almost certainly higher.

Tankers are sailing with AIS switched off, as permitted under maritime conventions when a vessel’s safety or security is at risk.

Exports out of the Arabian Gulf now rely heavily on a “tanker shuttle”. Tankers run through the Strait with AIS off, discharge their cargo via ship-to-ship transfer in the Gulf of Oman, then return inside the Gulf.

With few VLCCs willing to enter the Gulf, exporters are maximizing the volume carried on each crossing, then splitting those cargoes via ship-to-ship transfer onto Suezmaxes in the Gulf of Oman for onward delivery. This reduces the number of vessels that need to make the higher-risk Strait transit.

Tankers are exiting the Gulf in convoys. Between 20 and 22 September, MIOC satellite detections and Vortexa cargo data show 26.72 million barrels of crude exited through the Strait.

Roughly two-thirds of that volume was subsequently moved through ship-to-ship transfers. Spread across those three days, the flow was equivalent to about 8.9 million bpd, although convoy days represent peaks rather than a sustained export rate. For comparison, Vortexa puts Saudi Gulf loadings across 1–27 September at 105.6 million barrels, or 3.9 million bpd.

Saudi tankers are still loading crude at Ras Tanura and Juaymah. Most are doing so with their AIS switched off.

Between January 10 and 16, 35 crude tankers called at the two terminals with AIS on. By September 10–16, that number had fallen to just 2. Vortexa’s cargo data, which does not rely on AIS, shows that loadings over the same periods fell from 52 to 16 per week.

Actual loadings are down, but AIS-visible tanker activity has fallen far more sharply. The gap indicates that much of the apparent collapse in tanker traffic reflects vessels switching off AIS rather than crude movements stopping.

The last visible surge came between 1 and 10 July, as the Memorandum of Understanding period closed. Eight crude tankers left Ras Tanura and Juaymah in that window, declaring voyages to China, South Korea, Duqm, and Fujairah. Seven were VLCCs, six of them operated by Bahri, Saudi Arabia’s national shipping company.

After 10 July, the crude tankers still transmitting AIS were mostly smaller vessels moving between Saudi ports, plus a single VLCC, which called at Juaymah on 15 and 16 August. Across all Saudi Gulf ports, visible crude tanker calls fell from 17 in July to 5 in August and 4 in September, with no VLCC calls at all in September.

Vortexa’s cargo data shows the loadings continued. Crude tanker loads at Saudi Middle East Gulf ports rose from 8 in June to 19 in August and 55 in September (per Vortexa). Fifty of the September loads were VLCCs, including 21 operated by Bahri and 14 by Sinokor, the South Korean shipping group. Almost all loaded with AIS off. We assess that Saudi crude is moving through the Strait on AIS-dark tankers.

With East-West pipeline flow reduced after the Petroline attack, less Saudi crude can reach the Red Sea, and Saudi Arabia has shifted exports back to its Gulf terminals. Vortexa puts Saudi Gulf loadings at 3,911 kbpd for 1 to 27 September, more than four times August’s 933 kbpd and 39% below January’s pre-war 6,385 kbpd.

Even so, Gulf loadings remain well below pre-war levels. Middle East Gulf crude exports have recovered sharply since August, but VLCC availability remains constrained. As the East-West pipeline recovers, Saudi Arabia is likely to shift more crude back to Yanbu while tensions persist in the Strait of Hormuz.

Vortexa tracks 33 September cargoes from Saudi Gulf terminals, about 58 million barrels, bound for China and India, more than three times August’s 17 million barrels. Some of the 33 were shuttled via ship-to-ship transfer off Fujairah and Oman, so the vessel that loaded the crude is not always the vessel delivering it, and the final destination can change.

Windward Maritime AI™ platform data identifies declared destinations for 13 of the 33 cargoes. Eight are broadcasting destinations in China, with ETAs between 4 and 15 October. Five are broadcasting destinations in India, and most had already arrived at Vadinar and Sikka as of 28 September.

Iran retains the ability to strike individual vessels. AL MARYAH (IMO 9393682) and LR STEPHANIE (IMO 9282625) were hit between 20 and 22 September, the same three-day period in which 26.72 million barrels of crude exited through the Strait. Laden Gulf exits continued despite the strikes. MIOC assesses that, under current conditions, such attacks are more likely to cause short-lived disruptions than a sustained reduction in exports.

The recovery in crude flows is real, but remains vulnerable to further escalation.

A lot of confusing numbers, some days or weeks being better than others. Windward’s 8.9Mb/d “peak” volume seems more credible, roughly in line with Total’s assessment but much lower than JPM and GS.

Chinese buying has returned but will it continue at current prices/costs?

 

What will Iran do in October, just before the midterms?

What about other key products normally flowing through Hormuz?

Speaking of midterms:

• US Taps More Oil From Emergency Reserve as Fuel Prices Surge

The US ordered another release of oil from emergency reserves — and urged European nations to do likewise — as the Trump administration grapples with fuel prices that are surging less than two months before the midterm elections.

The US will offer up to 40 million barrels from the Strategic Petroleum Reserve, according to a statement from the Department of Energy, in what will be the last of the nation’s 172-million-barrel contribution to the coordinated release of oil from reserves around the world since the start of the Iran war. (…)

The SPR is projected to fall to its lowest level since 1982 once the latest release is completed. Federal law bars non-emergency drawdowns once inventories fall below 252.4 million barrels, while a 1981 report from the US Government Accountability Office advised against releases below 250 million barrels except in a “very severe emergency.” (…)

Russia Extends Diesel-Export Ban as Global Supply Squeezed

Russia extended a ban on most diesel exports through October, further tightening the global market just as demand rises ahead of the Northern Hemisphere winter and the US considers its own restrictions on exports.

Moscow enacted the ban on diesel exports for producers in July as a wave of Ukrainian strikes against its refineries dragged oil-processing rates to multiyear lows. The export curbs, initially envisaged to last just a matter of weeks, were subsequently extended through August and then to the end of September as the attacks continued.

Prior to the restrictions and Ukraine’s intense attacks on refineries, Russia accounted for roughly 10% of global seaborne diesel supplies. Withdrawing those volumes from the market compounded the effects of the disruption to flows in the critical Strait of Hormuz, driving up prices of the fuel that’s used to power trucking, farm equipment and industry around the world. As pump costs hit records in America, President Donald Trump has mulled a ban on US exports.

Analysts have warned that such a move could supercharge overseas prices, especially in Europe.

The fuel’s premium over crude oil is currently at around $82 a barrel in Europe, fair-value data compiled by Bloomberg show. That compares with about $28 a barrel at the end of February, before the US and Israel launched the war on Iran and Ukraine stepped up its attacks on Russian refineries. (…)

China’s Economic Activity Rebounds With Stimulus Lifting Outlook

The official manufacturing purchasing managers’ index was 50.1 in September, up from 49.8 in August and in line with the forecasts of economists surveyed by Bloomberg.

The non-manufacturing measure of activity in construction and services unexpectedly returned to positive territory at 50.2, the National Bureau of Statistics said Wednesday. Private surveys of manufacturing and services also showed a bigger-than-forecast improvement in September.

In a sign of stronger momentum for the country’s export-oriented firms, the RatingDog China manufacturing PMI rose more than forecast to 52.1 in September, its highest in five months.

The private survey results are based on a smaller sample and have tended to be stronger than those from the official poll as exports stayed strong.

The RatingDog China services PMI rose to 51.6 from 51.4 in August, according to a statement published Wednesday. (…)

More details from RatingDog:

An improvement in client demand, driven partly by interest among some companies in accumulating safety stock, had reportedly supported the latest expansion in overall new orders among Chinese manufacturers. This was accompanied by growth in new work from abroad amid reports of robust market conditions overseas.

Notably, total new work rose at the fastest rate in five months, while the upturn in new export orders was the best seen since February, with both respective indices signalling solid growth overall.

Among the three monitored sub-sectors, consumer goods makers recorded the strongest increases in new orders and output.

Turning to prices, average cost burdens continued to rise among manufacturers during September. The rate of input price inflation was the strongest seen in four months and solid. According to firms, higher raw material prices, particularly for metals and oil, were the main drivers of inflation.

As a result, Chinese manufacturers lifted their selling prices slightly in September, following a marginal reduction in August. Export charges likewise rose slightly.

Higher service sector activity across China was driven by greater inflows of new business in September. Total new orders expanded at a solid rate that was the quickest since June, supported by successful business development efforts among firms and a broad improvement in demand conditions.

The survey data also pointed to stronger external demand, as growth of new export business accelerated for the first time in three months. The latest increase in new work from abroad also extended the current sequence of expansion to five months; the longest since 2024.

AI CORNER

Biggest US Grid’s Data-Center Plan Accepted With 5-Month Pause

The Federal Energy Regulatory Commission said Tuesday that it would accept the filing of grid operator PJM Interconnection LLC’s plan to procure new capacity but would suspend it until Feb. 28 and establish a paper hearing on unresolved issues. The regulator also encouraged PJM to submit a new filing that answers the issues it raised, which could shorten the delay.

The artificial intelligence boom is driving the fastest growth in power demand in decades for PJM, which is home to the biggest US concentration of digital warehouses. The regulator agreed PJM needs more generation quickly and approved many parts of the operator’s plan, but said cost allocation, collateral and exit-rule issues need to be fixed before it can proceed.

“This Commission will not be forced into accepting a deeply flawed, 11th-hour procurement mechanism with billion-dollar implications for consumers,” Commission Chairperson Laura Swett said in the order. “We are prepared to promptly act on a subsequent proposal that addresses the concerns raised in this order and meets the standards of the Federal Power Act. The region’s reliability hangs in the balance.” (…)

Meanwhile

OpenAI’s annualized recurring revenue (ARR) is approaching $70B, surging from $40B in July (Bloomberg) and from around $20B at the end of 2025.

Anthropic’s ARR reached $65B as of late July 2026, up from $47B in May 2026 and $9B at the end of 2025. Some trackers evaluate its total run rate as high as $74-$76B by late Q3.

Combined revenues went from ~$30B end of 2025 to ~$145B currently!!!

Meanwhile

Trump and House Speaker Mike Johnson yesterday said that AI-related CEOs had signed a statement pledging to keep AI technology safe. The document includes voluntary principles such as internal controls to monitor model development, external model reviews and notifications to the board of directors about those safety efforts.

Everything “voluntary” while all in an existential race…

But no worries: “Trump called it a “constitution” that he thinks is “morally binding.”

Respecting the constitution? Morally binding? Trump?

CONSUMER WATCH

From The Transcript:

“…we’re not seeing any deterioration. It’s continued strength. It may not be at the highest level that it’s been over the last 12 months, but we do see continued strength.” – Bank of America Co-President Jim DeMare

“The consumer is surprising us. She’s resisting gas prices. She’s resisting worries about tariffs, and she’s spending.” – The PNC Financial Services Group President Mark Wiedman

“Our members continue to show resilience in their spending, and they show a willingness to spend in discretionary areas where they’re seeing exciting new items at great value. Net sales for the fourth quarter were $93.87 billion, an increase of 11.2% from $84.43 billion in Q4 2025. Comparable sales were up 9.4% and 6.7% adjusted for gas price inflation and FX. Excluding gas sales entirely and adjusting for the impact of foreign exchange, comparable sales were also up 6.7%.” – Costco Wholesale CFO Gary Millerchip

“So I would simply say the consumer remains resilient. I never thought I would use that word as often as I’ve used that word. They’re definitely choiceful.” – Macy’s CEO Tony Spring

“The last thing I’ll mention is, and I’m sure you’ve asked this question, is the consumer is very resilient though, still through all this. And the biggest reason why, and it’s no surprise, is she is gainfully employed still.” – Dollar General CEO Todd Vasos

There is a lot of capital investment going on. There is a need for a lot of electricians and a lot of construction work going on in some of this AI boom…So we have not seen anything in the macro environment, still not seeing any signs of a recession.” – Paychex CEO John Gibson

“I’ll say externally, you can see consumer sentiment being down, but consumers are still spending. They’re still resilient. They’re spending in Casual Dining.” – Darden Restaurants CEO Rick Cardenas

“…as we look into the fourth quarter, bookings are tremendously strong…the consumer has disposable income and wants to spend on experiences. And so the industry, to maintain profitability, has had to push through some price to offset rising fuel prices. And I wouldn’t say, to our surprise, it was our expectation, but it’s proven out that demand is incredibly resilient.” – United Airlines CFO Mike Leskinen

“…you see consumer sentiment down, but behavior hasn’t really changed. And that’s been true across the board. We’ve still seen a lot of success in our full-size trucks and SUVs . And no sign of that abating.” – General Motors CFO Paul Jacobson

GLP-1 effects

“August was also slightly negative. We expect September will be positive. But I think because of that slower start to the beginning of the quarter, I think we expect the U.S. business will be slightly negative for Q3. In the U.S., approximately 10% of adults use GLP-1s. And of those households with GLP-1 users, guess how many visit McDonald’s? 84%. Let me say that again. 84% of households with GLP-1 users visit McDonald’s. This is an opportunity.” – McDonald’s President Skye Anderson

All I can see is that the plus-size business is very soft and that most other areas of apparel are healthy. And I think you’re seeing people as they go through a period of time on GLP-1s, losing enough weight, what happens? People want to get a new wardrobe. And you don’t get a new wardrobe just for the summer. Then you need a new wardrobe for the fall, then you need a new wardrobe for the winter, then you need a new coat, then you need a new swimsuit. So we see this as a — we’re on the early cycle of GLP-1s” – Macy’s CEO Tony Spring

Lindt to Cut Prices as Chocolate Demand Wanes in Key Markets

The Swiss company is cutting prices for its Christmas offerings and plans to lower them across the board starting from January, Chief Executive Officer Adalbert Lechner said Tuesday on a media call. Lindt earlier revised its full-year 2026 outlook for organic sales growth to a range of 0%–2%, down from 4–6% previously, having already trimmed it in March. (…) “Pricing power, long Lindt’s trump card, is now being tested.”

Resiliency’s bad breadth:

The median and average stock in the S&P 500 are down more than -10% from the 52-week highs. Only about a quarter of stocks are above their 50-day averages, and new lows have been outpacing new highs consistently. This is the breadth divergence I illustrated yesterday: the index is near highs, driven by about 20 mega-cap names that make up half its weight, while most stocks are in their own corrections.

The ratio of the equal-weighted S&P 500 to the S&P 500 index is down to 1.11, its third-lowest level since April 2003 — having declined now for five weeks in a row. (…)

As per Peter Schiff, “The S&P 500 is 0.7% below a record high, yet 430 of those stocks are 21.7% below their highs. That means on average 86% of the stocks are in a bear market. (David Rosenberg)

Anthropic’s IPO prospectus shows sweeping AI vision, surging costs

(…) Anthropic reported a net loss of $42 billion ‌in 2025, and plans to spend $518 billion on cloud, computing and infrastructure obligations in coming years, according to the prospectus. (…)

Revenue grew 12-fold in 2025 to nearly $4.6 billion, even as the company lost more than $8 billion on an operating basis, excluding writedowns of various liabilities mostly tied to previous fundraising, according to the documents, reported here for the first time. (…)

The AI lab spent $7.33 billion on compute and infrastructure last year, a threefold surge from 2024, accounting for more than half of its $12.65 billion in total operating expenses. (…)

Anthropic said nearly a quarter of its revenue came from two customers last year, and as part of its risk factors, warned that many of its largest clients were not locked into long-term contracts and could cut or stop spending.

Anthropic had cash, cash equivalents and short-term investments totaling $20.28 billion as of December 31, the prospectus shows.

BTW:

Chinese AI is leading in performance per compute
“Chinese AI models are generally outstanding, actually. I mean, you can see on the intelligence rankings, especially given the limited amount of compute that the Chinese AI companies have, the performance is excellent. Probably China is doing by far the best in terms of performance per unit of compute. And as I’ve said publicly, I think China’s going to address the compute limitation faster than most people expect. My rough guess would be that China addresses the compute constraints with lithography and chipmaking in about two or three years.” – Tesla CEO Elon Musk

China has a huge edge in electricity production
“It was just a statement of fact that China, I think, earlier this year passed the electricity output of the United States, Europe and India combined, and is continuing to increase significantly. So if China reaches the same GDP-to-electricity output as the US, which I think is likely, then China would go from where it is now, roughly three times the US electricity production, to probably four times, which would be proportionate to the population difference.” – Tesla CEO Elon Musk

“One, they just have a lot more energy than we do, and they plan to build a lot more than we did. I think we just have to acknowledge that we got ourselves really gummed up in climate change and sustainable energy, and as a result, we just didn’t plan enough energy production.” – Nvidia CEO Jensen Huang

China Signals Economic Stimulus to Counter Worsening Slowdown

(…) Having spent months insisting the focus was on fully implementing existing measures, China’s cabinet — the State Council — now says it will “put in place a package of practical and effective additional policies” to safeguard this year’s economic goals. The “emerging issues” in the economy require the government to “step up counter-cyclical adjustments,” it said in a statement Monday.

The abrupt shift in language indicates an imminent new round of stimulus as Beijing becomes increasingly concerned over the cooling momentum in the world’s second-largest economy. Growth has likely weakened further below the bottom end of the government’s annual target in the third quarter after reaching 4.3% in the previous three months, with consumption flatlining and investment falling into a deeper slump. (…)

While China’s leadership appears ready to tailor policies in any way necessary to meet this year’s growth target, the government has so far hinted at several measures that suggest it’s not contemplating a stimulus package on the same scale as two years ago, when it moved aggressively to turn around market sentiment.

Local authorities will be allowed to tap unused bond quota left from previous years, with the central bank’s relending allowance increased to encourage loans to sectors including technology, agriculture and small businesses, according to the statement issued after a Monday meeting of the State Council chaired by Premier Li Qiang. Policymakers will also study fresh measures to stabilize the property market, promote employment and boost household income, it said. (…)

In the statement on Monday, officials also reiterated a call for faster implementation of existing policies. (…)

• Toyota Sales Fall for Seventh Straight Month on China Slump

Toyota and Lexus brand sales cratered 23% in the world’s biggest auto market in August on weak demand for gasoline and hybrid vehicles, the Japanese manufacturer said Tuesday. That dragged down its global group deliveries, which declined 7.5% from a year earlier. (…)

Honda Motor Co.’s global sales fell 9.2% in August, dragged down by a 50% slump in China. Nissan Motor Co.’s deliveries in the country plummeted 52%, resulting in a global sales decline of 17.5%.

Toyota and Lexus did better elsewhere, with sales rising 2.6% in Europe and 9.1% in Japan thanks to robust demand for new models, especially hybrids. They declined 4.4% in the US and fell by more than a third in the Middle East.

Earlier this year, Toyota said hybrid sales are on track to exceed 5 million units for the first time in 2026. Alternative powertrains have provided the Japanese carmaker with a strong arsenal in the US, where steep tariffs have all but blocked BYD Co. and other Chinese brands from entering the market.

The FT has more:

Toyota has been the most resilient of all legacy automakers in China after cut-throat competition led many rivals to retreat from the market or rethink their strategy. (…)

Toyota is pivoting its local strategy to a “China-for-China” model that uses more Chinese parts and technology suppliers and empowers domestic engineers to compete better against local EV rivals led by BYD.

As well as trying to catch up on technology and development speed, Toyota is laying the groundwork to embark on its biggest factory overhaul investment programme in decades to modernise its production facilities through robots to fight back against Chinese rivals.

US forces exit Iraq after two decades, leaving opening for Iran

US forces are set to pull out from their last bases in Iraq by Wednesday, a departure celebrated as a victory by Iran and its allies ​who now have deep influence in the country where 4,500 Americans died during more than two decades of war.

Iraqi security experts say the withdrawal — agreed in 2024 under President Joe Biden and carried ‌out by Donald Trump’s administration even as it wages war against Iran — could give Tehran and its powerful allies free rein, while also allowing other US enemies to stage a comeback, including Islamic State.

“Iran stands to benefit strategically from the coalition’s departure because it removes a military presence that for years acted as a counterweight to Tehran’s influence in Iraq,” said Jasim al-Bahadli, an Iraqi security analyst specialising in studying armed Shi’ite groups aligned with Iran. (…)

“We believe Iraq is still not fully ready to take over the security file ​at this time,” Abdulrahman al-Zobaie, a Sunni tribal leader in Fallujah, once a bastion of anti-American resistance, told Reuters.

“All Iraqis aspire to full sovereignty, and no Iraqi would dispute that. But I believe that the (US-led coalition) leaving in this way and creating a vacuum is what all Iraqis fear.” (…)

In ​recent years, Iraq has been the only country to maintain close political and military alliances with both the United States and Iran, which sometimes used Iraqi territory as a proxy battlefield. (…)

In this year’s war against Iran, 7 of the 18 US service members listed as killed were in Iraq, the last an army sergeant who died during the controlled detonation of a drone at a base near Erbil in July.

Iran, which says its ultimate aim is to force American forces to leave the entire Middle East, casts the US withdrawal from Iraq as a victory for its “axis of resistance” of allied armed groups across the region. (…)

Washington has accused Iran-backed militia groups in Iraq of playing a role in the wider Middle East conflict by launching attacks on neighbouring countries at the direction of Tehran, most recently hitting a major Saudi oil pipeline this month. The Baghdad government says it is trying to curb their influence. (…)

Iraqi security forces said a suspected ​Islamic State cell was preparing suicide attacks to coincide with the pullout. The plot highlighted concerns that the militant group remains capable of exploiting security gaps despite years of military setbacks, said four Iraqi security and army officials.

Islamic State “is seeking to send a message that the group is still powerful ​and capable of launching bloody attacks,” said Colonel Khalid al-Bayati, a senior security official in the strategic oil town of Kirkuk.

“Super Intelligence” hallucinations:

Trump, speaking to reporters at the White House on Monday, said he’s betting the Canadians will agree to what he called “a fair deal” in three to four weeks. “They’re going to come in, and they’re going to say, ‘Sir, we are sorry.’”