Recent diplomatic momentum over the Strait of Hormuz and nuclear issues underpins trader expectations of no U.S. invasion before 2027. Following the February 2026 U.S.-Israeli strikes that killed Iran's supreme leader and triggered missile exchanges, a June memorandum of understanding and subsequent talks produced a fragile framework for sanctions relief, reduced hostilities, and waterway access. As of early August, Iran and Oman neared a transit arrangement, with President Trump signaling imminent progress and pausing fresh strikes pending rapid concessions. Limited naval blockades, targeted strikes, and proxy frictions have persisted without ground operations or regime-change objectives, aligning with historical patterns where full invasions face high barriers absent sustained escalation. Ongoing mediation and economic incentives continue to favor negotiated de-escalation over direct invasion within the remaining 2026 window.