Former U.S. President Donald Trump has reportedly threatened to cut Saudi Arabia’s supply of missile interceptors following the kingdom’s refusal to support his plan to reopen the Strait of Hormuz. This development comes amid heightened tensions between the U.S. and Saudi Arabia, which have been exacerbated by Saudi Arabia’s suspension of U.S. military access to its bases and airspace. The backdrop to these events is the ongoing conflict involving Iran, triggered by U.S.–Israeli strikes on Iran earlier this year, and subsequent Iranian retaliatory actions across the Middle East.
The threat to withhold interceptors indicates a potential escalation in U.S.–Saudi relations, already strained by Saudi Arabia’s de-escalatory stance with Iran. This diplomatic rift may further complicate U.S. efforts to facilitate peace talks with Iran. The current fragile ceasefire in the region remains without an enforcement mechanism, leaving Gulf states vulnerable to Iranian military strategies. Market participants have taken note of these developments, as reflected in a significant decrease in the likelihood of imminent U.S.–Iran diplomatic meetings.
The prediction market on whether a U.S.–Iran diplomatic meeting will occur by July 3 has seen the implied probability drop sharply from 32% to 10.5% over the past 24 hours. Similar declines are observed in related markets, indicating that participants view the situation as less conducive to near-term diplomatic engagement.
