After weeks without American strikes, U.S. forces hit Iranian launch sites on Sunday that were preparing to fire rockets carrying naval mines into the Strait of Hormuz. Tehran fired a salvo of missiles at Jordan; all were intercepted. The strike came days after President Trump said every mine in the waterway had been removed and warned that any vessel laying new ones would be destroyed.
Markets did the arithmetic Monday. West Texas Intermediate rose 2.8% to $85.76; Brent closed August above $90. Energy and technology were the only two sectors in the S&P 500 to finish higher. Schlumberger gained 4.8%, Devon 2.4%, Halliburton and Baker Hughes more than 1.8% each.
Why mines are the cheap weapon
Iran does not need to sink a ship. It needs to persuade a captain and an insurer that the odds of hitting one are too high. Firing mines from shore by rocket means no mine-laying boat has to expose itself to the Navy. For the U.S., which wants ships moving, the job is harder: every mine, cleared, in contested water. Goldman Sachs estimates Gulf exports have recovered to about two-thirds of prewar levels — the blockade is hurting Iran more than the strait is hurting the U.S., in Walter Russell Mead’s reading — but two-thirds is not three-thirds, and the market prices the difference.
The cupboard
The Saturday Journal carried the other half. The U.S. has rushed so many munitions to the Middle East that planners now worry the drawdown weakens deterrence against China and Russia. European stocks of PAC-3 Patriot interceptors and ATACMS missiles are “beyond critical,” officials said; THAAD and counter-drone systems have been shifted out of Europe too. By mid-July the U.S. had fired roughly 1,700 Patriots, 200 THAAD and 150 ship-launched interceptors against more than 1,500 Iranian ballistic missiles and 6,000 large drones. Refilling from Japan, South Korea and Germany could take years. The Pentagon calls the shortage claims false.
| The restock, per Heard on the Street | Detail |
|---|---|
| Solid rocket motors at scale | Only L3Harris and Northrop Grumman — as many in a day as all smaller makers in a year |
| L3Harris framework agreements | THAAD propulsion ×4, PAC-3 motors ×~3 over seven years |
| L3Harris shares, 2026 | −10%, 20 points behind the defense primes; <16× free cash flow |
| Revenue target | $27 billion by 2028, ~8% a year |
L3Harris fell into that discount after its chief executive was pushed out and a planned spinoff of the missile business slipped to at least mid-2027. Heard on the Street’s verdict: “a rare buying opportunity.” Ours is narrower — the company already sits in the defense book, and the case for keeping it at weight got stronger, not weaker, this weekend.
The rest of the board
China has spent years building the world’s largest oil stockpile — analysts put it at 1 to 1.4 billion barrels, roughly 120 days of imports — and cut crude imports 23% from March to July without panic. Taiwan’s legislature passed $7.6 billion for drones. Venezuela’s Trump-backed operator plans to send 52 rigs into fields where Chevron already produces almost 300,000 barrels a day. And prediction markets put 16% odds on a U.S. invasion of Iran before 2027 and 82% on the ceasefire holding through September. A probability is not a fact. That is why the insurance stays on.