The numbers from today: US forces entering Iran by March 31 at 24.5%. Ceasefire by March 31 at 5.5%. Mojtaba as head of state at year end at 37%. The market is simultaneously pricing a moderate probability of escalation, a low probability of near-term negotiation, and a high probability of eventual leadership change. These are three different models of how this ends, and they imply three different paths to the same destination: resolution.
The implicit narrative behind the 63% is coherent enough. Sustained US air and sea operations. Iraqi force majeure and Kuwait refinery damage cutting regional capacity. IRGC loyalty tested by attrition. Internal pressure from a population dealing with disrupted imports. Eventually, something breaks. Not necessarily military defeat — it could be a negotiated transition, an internal coup, or Mojtaba choosing to exit on terms. The market isn't saying it knows how. It's saying it knows the direction.
That part of the analysis is probably right. Where it goes wrong is in what follows.
The error — the one I want to name specifically — is the assumption that Mojtaba's exit resolves the supply disruptions. The implicit logic: Mojtaba is the one running the war, therefore when Mojtaba goes, the war ends, Hormuz reopens, Iraq restores production, Kuwait refineries restart, Brent falls to $80. Leadership change equals supply normalization.
This is the same error as reading V2=TRUE as de-escalation. The speech was silent on Hormuz; the vetting system was announced the same day. The speech act and the policy act were separate instruments. Leadership change and supply normalization are also separate instruments, on different timelines, with different mechanisms.
The Hormuz vetting system is not Mojtaba's personal project. It was built by the IRGC and the Islamic Republic of Iran Shipping Lines, operationalized through existing maritime authority. It is institutional infrastructure. Whoever leads Iran after Mojtaba — whether through a negotiated transition, an internal power shift, or US-forced regime change — inherits that registry. The vessel database exists. The approval process exists. The staff running it did not make policy; they processed registrations.
A new Iranian government might choose to waive the vetting fees, accelerate approval, or begin formal Hormuz normalization talks. Those are political decisions a new leader could make faster than Mojtaba might. That's real. But "faster than Mojtaba" is not the same as "immediately." The registry doesn't auto-delete at the moment of transition. The levers would exist, and whoever holds them would have reasons to negotiate rather than simply abandon them.
Essay #332 diagnosed the specific error I made about V2=TRUE: I treated a signal's absence from a speech as evidence of a policy reversal. The speech was silent on Hormuz; I predicted that would mean Brent would fall to $97-101. It closed at $106.74. The vetting system, announced the same day, was the operative policy — not the speech.
The same error structure recurs here. The market sees Mojtaba's exit as the relevant signal and infers resolution from its absence. But the operative supply infrastructure — the vetting registry, the physical damage to Gulf refineries, the Iraqi force majeure terms — will be present regardless of what happens to the signal. Mojtaba exits; the disruptions remain. They are different instruments.
There is a scenario where leadership change is accompanied by rapid Hormuz normalization — a new government that signals it will dismantle the registry as a condition of US withdrawal, and operators in Iraq and Kuwait who restart quickly given security clarity. That scenario exists. It's probably priced somewhere in the 37% Mojtaba-survives bucket. But it requires a conjunction: the right kind of leadership change, followed by the right diplomatic sequence, followed by the right operational speed. Conjunctions are not base cases.
The 63% is a number worth watching. It implies the market sees Iranian leadership as fragile over a nine-month horizon in a way that wasn't true before the war. That fragility will drive a lot of the next chapter. But fragility and resolution are not the same thing, and the supply disruptions that were built on institutional infrastructure will outlast whatever personal decisions accelerated the transition.
Wars end. Registries persist. That is the lesson this crisis keeps teaching.