China's PLA military has long been known to intimidate and threaten the self-ruled island of Taiwan, mainly with large military exercises which sometime encircle it partially or completely, or else with a heavy naval boat presence in the Strait of Hormuz.
Taiwan's military often reacts by scrambling its own fighter jets to closely monitor the PLA maneuvers - seen as a natural defensive and reactive move. But this week, in a rare moment, Taiwan is finally doing some proactive flexing of its own.
EPA-EFE"Taiwan fired U.S. mobile missile launchers into the strategic waters directly facing China for the first time, sending a message of resolve to Beijing and Washington," The Wall Street Journal reports.
This involved over 30 test rocket launches via truck-mounted High Mobility Artillery Rocket Systems, or HIMARS. Importantly, the launch site was an area near a river mouth on Taiwan's western coast.
"This is sending a message to the Chinese that they are going to get hit hard if they try to come across the strait—and will end up with far fewer ships than they started with," Grant Newsham, a retired US Marine colonel who served in several Indo-Pacific roles, told WSJ.
The WSJ continues with further context:
The drill was the highlight of two days of military exercises showcasing Taiwan’s preparations to combat an amphibious invasion. China considers democratically self-ruled Taiwan as part of its territory and hasn’t ruled out potentially using force to absorb the island.
...Such exercises also serve as a signal to Washington that Taiwan is committed to defending itself and deserves U.S. support, with a $14 billion U.S. arms package currently on hold.
Back in April, Chinese President Xi Jinping addressed cross-strait relations: "All sons and daughters of China share the same Chinese roots and the same Chinese spirit. This originates from blood ties and is deeply embedded in our history – it cannot be forgotten and cannot be erased," he said at the time.
Officially, Biejing seeks a 'peaceful reunification' of the independent island to the mainland, while many Washington officials fear it could at any point launch an outright invasion and political takeover.
WATCH: Taiwan conducted its first HIMARS live-fire on its western coast, the primary PLA invasion corridor.
32 of 36 planned rockets fired; 4 misfires under investigation.
Previous HIMARS drills were on the east coast. pic.twitter.com/9Z1xPWMgIK
But the reality remains that any PLA direct military intervention would likely be in response to a provocation, and wouldn't just materialize out of thin air. Beijing has at times warned that the growing billions of dollars in arms that Washington has been providing Taiwan could be just such a provocation.
Xi's China has also been very alarmed at the growing (direct) US military footprint in its own backyard, given the presence of American military advisers, said to be present in some of Taiwan's small islands which lie close to the Chinese mainland.
Tyler Durden Wed, 06/10/2026 - 11:05By Michael Every of Rabobank
Welcome to the ‘peacefire’. After Israel and Iran were pulled back from the brink of new war by Trump on Monday, Wednesday morning Asia time saw him then strike Iran, and it fire at US bases in the Gulf, in response to Tehran downing a US Apache helicopter. It appears the US hit radar and missile/drone facilities around and in the Strait of Hormuz while Iran didn’t hit anything due to its missiles being intercepted.
Looking at the areas the US struck in Iran last night, one plausible explanation is that they targeted the infrastructure Iran uses to control shipping in the Strait of Hormuz. In effect, they may have hit the “toll booth” and related facilities — including military/security… https://t.co/xq6OwcEQbV
— Anas Alhajji (@anasalhajji) June 10, 2026It seems both sides can now attack each other on a limited/proportional scale under a ‘ceasefire’ while peace negotiations continue… which Trump says are now in the “final throes”, and cynics point out such finality is always thrown further into the future.
The latest suggestion there is that Iran may dilute its highly enriched uranium stockpile rather than destroying or handing it over, which would be a serious US climbdown if so; that’s as Trump elsewhere mused that he might set up a Marshall Plan for Iran – but would want half their oil in return.
On Iran, TRUMP tells @ABC: “Somebody's going to have to build all that infrastructure, new bridges, new this, new that, new power plants… they're talking about a trillion dollars, probably more… that's why we'll probably get involved in rebuilding.”
“But, we’ll get half their…
Yet allowing Iran to keep its nuclear potential is not going to be acceptable to Israel, meaning no long-term peace in the region whatever the US decides. Meanwhile, Israel continues to attack Hezbollah, so far to no promised retaliation from Iran. As noted yesterday, that points to Iran’s failure to link Lebanon to its own conflict and to force Israel to stop hitting its proxy there. It goes without saying that the latest US strikes against it further underline that Tehran is not as in control of all elements of this crisis as some media and analyst takes would have it: this ‘peacefire’ arguably suits the US more than Iran.
Furthermore, note oil had slid ahead of the latest attacks after the US energy secretary said Hormuz transits are ‘meaningfully’ climbing. Crucially, there is evidence suggesting the US Navy is ushering more oil through Hormuz, with transponders off, than official data on ship movements show. Indeed, both the UAE and Kuwait are now offering crude to Asia again, while Saudi jet fuel supply to Europe is higher than before the Hormuz closure (first discussed here "As Gulf States Plan Bypass Pipelines, US Military Is Quietly Helping Ships Cross Hormuz"). That may not get much fanfare, but it is extremely significant if so.
Of course, oil then climbed after the US strikes on Iran - and a Hormuz reopening date beyond what we already expected (September) was just flagged. Trump had echoed our thinking when talking about Labor Day, September 7, as a possible reopening date, but yesterday Vice-President Vance noted it could take “weeks” or even “months” to get to a deal - but one will “absolutely” happen before the mid-term elections. That means November! Of course, if more oil is getting out of Hormuz, how destructive that extended closure timeline will prove for the global economy is unclear – but the tail risks aren’t eliminated.
Elsewhere in geopolitics, Taiwan’s opposition leader told the US and China not to use her country as ‘pawn’. Recall Bloomberg yesterday claimed a $10 trillion price tag if problems emerge there. How many plan Bs are being put in place on that risk basis?
In geopolitics-adjacent geoeconomics, the EU wants to use African solar power for its own energy future – which will logically require not just up to €100bn in investment there, and Africa not wanting that power for its own economy, but an EU ability to physically protect such installations in a region plagued by Islamist attacks and Russian influence in places. That could therefore cost more than €100bn.
Meanwhile, Germany announced the planned Franco-German fighter jet scheme dead, and Airbus flagged plans for a German-led alliance to replace it. There are also suggestions the UK will be forced to cut its contribution to a proposed UK-Italy-Japan fighter jet and cancel its new Navy destroyers if they don’t further hike taxes, which would be politically damaging. Who could have known that massive rearmament is very expensive and tricky to coordinate?
In related technology issues, Brussels has ordered Meta to open up WhatsApp to rival AI agents, as the White House reined in its new AI-testing unit while Anthropic released the new ‘Mythos-class’ model to the general public ‘with guardrails’. That’s as the Wall Street Journal notes Wall Street is enthusiastically funding AI in any way possible, and Europe’s ASML warned the EU against politically directing chip supplies as part of its AI plans.
In markets, the Korean KOSPI was down 4.5% today after being up 8.2% Tuesday after being down 8.3% on Monday (and 5.5% on Friday).
The US 10-year yield was at 4.53%, not yet at the level requiring a new Iran deal story from Axios.
Wall Street is embracing the crypto it once feared, according to Axios - as Reuters notes, ‘Under the Trump crypto playbook, the family always wins. Investors don’t.’
Now back to the ‘peacefire’.
Tyler Durden Wed, 06/10/2026 - 10:50Oil prices are higher this morning on renewed fighting between the US and Iran (and Trump rhetoric), while API reported a major crude inventory draw (for an eighth week in a row).
Additionally, in its monthly Short-Term Energy Outlook released on Tuesday, the Energy Information Administration (EIA) reported the closure of the Strait is depleting global inventories, keeping prices high.
"Global oil markets remain highly volatile as very limited shipping traffic through the Strait of Hormuz has caused oil producers in the Middle East to reduce crude oil production by more than 11 million barrels per day (b/d) in May compared with pre-conflict levels. This drop in production has resulted in large global inventory draws to meet demand. Under our assumptions, we expect global oil inventories will fall by an average of 6.3 million b/d in 2Q26 and by 7.6 million b/d in 3Q26," the agency said.
So this morning, all eyes are on the official data to see just how fast those inventories are depleting...
API
Crude -9.1MM
Cushing -1.1MM
Gasoline -1.2MM
Distillates +1.3MM
DOE
Crude -7.23mm
Cushing -801k
Gasoline +186k
Distillates -200k
Following API's reported a huge crude draw, the official data showed a seventh straight week of crude inventory declines. Gasoline stocks saw a build for the second week in a row...
Source: Bloomberg
Cushing 'tank bottoms' are looming...
Source: Bloomberg
US gasoline stocks are barely off their lowest levels since 2014 for this time of year...
Source: Bloomberg
The Strategic Petroleum Reserve saw another huge drawdown this week for a total of 66.2 million barrels since the Iran 'mini-war' started (16% of the pre-war total)...
Source: Bloomberg
Rig counts continue to rise with US crude production just shy of record highs...
Source: Bloomberg
US crude and product exports dipped last week but remain notably elevated from pre-war levels...
Source: Bloomberg
WTI was hovering just below $90 ahead of the official data
Despite the higher tensions, crude futures are down by more than a quarter since their peak at the end of April, aided by a combination of a plunge in Chinese imports to multiyear lows, record American oil exports and large releases of emergency reserves.
The retreat is a sign that oil markets are, for now at least, coping with the disruption and physical markets look well supplied.
“At the moment the market is trying to find some equilibrium,” Wael Sawan, Chief Executive Officer of Shell Plc, said on the sidelines of the Wall Street Journal CEO Council in London.
“It’s more driven by short-term headlines. And so if I look at the reality, we’re of course drawing down on those inventories fast.”
"While diplomatic efforts remain ongoing, the latest military exchanges have reintroduced a geopolitical risk premium into oil markets," Reuters quoted Priyanka Sachdeva, senior market analyst at Phillip Nova, as saying.
Tyler Durden Wed, 06/10/2026 - 10:40