US Pullback in Iran Crisis: New Phase of Regional Volatility, Not De-escalation

• A potential US military pullback from the Iranian theater may trigger a more fragmented and less controllable regional phase, not an end to the crisis.
• Markets might misinterpret a US withdrawal as de-escalation, but it could lead to a more regional, fragmented, and costly conflict for the global economy.
• A reduction in US military presence would not resolve core disruptions like reopening the Strait of Hormuz, halting Israel-Iran strikes, or repairing energy infrastructure.
• The Strait of Hormuz is crucial for the global economy, with 20% of global oil shipments passing through it, making it more than just a military issue.
• The report suggests a 'messy middle' as the most likely outcome, with no clear resolution, and markets may initially cheer reduced US involvement but later face partial access to Hormuz.