Iran's Khatam al-Anbiya Central Headquarters issued a directive this weekend.

All commercial vessels and oil tankers transiting the Strait of Hormuz must now follow pre-designated mandatory pathways set by Iranian authorities. Foreign warships interfering with this management will be 'directly and instantly targeted by the Armed Forces of the Islamic Republic.'

That's the line. Sunday news, Monday market reaction.

The MCO read is that Iran is converting the strait from an international waterway into a managed corridor under its rules. Whether it can enforce that against the US Navy is a separate question. What matters for markets is the signal.

Insurance for tankers transiting the strait already doubled this past week. With new mandatory routes, insurance rates will reprice again Monday morning. Some operators are already rerouting around the Cape of Good Hope, which adds 15-20 days and significantly more fuel cost per delivery. Structural cost shock, not headline risk.

Roughly 20 percent of global oil flows through the strait. About 30 percent of LNG. China is the largest customer of Iranian oil, but also the largest customer for Saudi oil that needs to transit the strait. The geopolitical calculus is more tangled than headlines suggest.

Defense Secretary Pete Hegseth's statement that US military is 'ready to resume combat in the Gulf if needed' frames the US response. Trump was in the Situation Room this weekend discussing a tentative deal that would reopen the strait and start nuclear talks. Both threads are alive at once.

The MCO oil thesis remains intact. Higher prices possible in a B-wave, possibly to 135 plus, but the path is chaotic and unreliable. This weekend's Iranian move is exactly the kind of catalyst that supports higher prices, but doesn't guarantee a sustained trend because diplomatic resolution can take it back in 24 hours.

What to watch Sunday night and Monday open. First, futures gap at the Asian open. Brent closed Friday at 91. A Monday open at 95 plus says the market is taking this seriously. A flat or red open says the deal track is being priced. Second, insurance rates published by Lloyd's Monday morning. If they jump another 50 percent, real rerouting is happening. Third, dollar index. Geopolitical risk-off usually means dollar strength on top of oil strength.

For broader risk, this is the kind of weekend that shifts the entire weekly setup. Equities ended Friday at fresh records on hot PCE. Iran resetting the rules in Hormuz over the weekend is the type of catalyst that can change Monday's tone fast.

End-of-month positioning amplifies all of this. Funds rebalance, and a weekend shock means Monday flows skew defensive.

Sunday night will tell.