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Summary

• Houthis reportedly mine Bab al-Mandab: Saudi media reports 'dense' mining in the strategic Red Sea shipping route, with demining operations underway.
• Iran escalates tanker attacks & threats: The IRGC claims it struck an LPG tanker in the Strait of Hormuz, causing a major fire, and threatens further action against violating vessels.
• Vessel struck near UAE: UKMTO reports an unknown projectile hit a vessel west of UAE's Al Jazeera, sparking a fire that has since been extinguished.
• Trump signals temporary restraint ahead of midterms: Trump rules out attacking Iran before the November midterms, while diplomatic talks reportedly remain stalled.

Houthis Mine Bab al-Mandab Strait: KSA Media

Saudi-funded Al Arabiya is reporting a 'worst fear' scenario on Friday, saying that Houthi militias have planted a large quantity of mines in the Bab al-Mandab area.

The report says further that Saudi-backed teams of engineers are currently engaged in demining operations in the Red Sea strait. It writes:

Engineering teams continue clearing operations and removing mines and improvised explosive devices in Bab al-Mandab.

If confirmed that such mining operations are widespread in Bab al-Mandab, this would constitute yet another major crisis for global energy shipping. At the moment, Saudi-backed fighters are focusing anti-Houthi operations along the Red Sea coast, with Saudi reports suggesting a rapid retaking of the strategic ground.

As a reminder, the Houthis have thus far signaled the Bab al-Mandab strait is 'open' for normal transit, but that only Saudi and Israeli-linked vessels would suffer attack. And so the Al Arabiya report, if accurate, could just be indicating some localized mining immediately near the coast related to the ongoing fight against the Saudi coalition in Yemen.

Iran Ramps Up Tanker Attacks

Things are fast escalating once again in the Strait of Hormuz, after White House officials have lately been gloating that the US Navy has overseen record wartime oil flows through the vital waterway, which each warring side is still claiming to 'control'.

Iran's Islamic Revolutionary Guard Corps (IRGC) said Friday it targeted a liquefied petroleum gas (LPG) tanker in the Strait of Hormuz (hours ago), with Iranian state media reporting that the vessel was attempting to pass through the narrow waterway "illegally" and suffered a massive fire.

The IRGC Navy also warned that from now on any vessels committing violations outside the Strait of Hormuz would be "punished," according to a statement carried by Iranian state media. This is served to immediately push oil prices higher...

Separately, the United Kingdom Maritime Trade Operations (UKMTO) reported a new incident involving a vessel approximately 13 nautical miles west of Al Jazeera in the United Arab Emirates.

The vessel was reportedly struck by an unknown projectile, sparking a fire that has since been extinguished, coming after similar incidents earlier this week.

Market Reacts

Oil prices rose following the reports, while futures moved lower, reflecting heightened market sensitivity to escalating tensions and potential further big disruptions to shipping and energy flows through the Strait of Hormuz - even as President Trump has been touting the ultimate 'success' of the US mission.

President Trump on Thursday vowed the US would not attack Iran before the November midterm elections, tempering rising oil prices - and seeking to 'assure' GOP voters - amid prior reporting in The Atlantic which said the Pentagon has been ordered to prepare 'options' for the Commander-in-Chief to launch strikes before the vote.

Trump has also touted "productive conversations" with Iran, even though the Iranians themselves have said talks are stalemated and there's no progress whatsoever.

With less than a month left until the midterms, and with Trump's approval rating at daily all time lows largely due to record - for this time of year- gasoline and especially diesel prices - the President badly needed some good news, even if largely superficial, and he announced it late on Friday just an hour before the close when Trump posted on Truth Social that Vladimir Putin had agreed to release (a modest amount) of diesel supplies into the global market, as the administration looks to tame price hikes for the critical fuel.

Trump said on Truth Social that “it was agreed that Russia will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace, another 500,000 Tons during the month of November, and 1,000,000 Tons immediately thereafter.”

He added that then, “based on the condition of their Diesel Refineries, Russia will then deliver, within a short period of time, 3,000,000 Tons of Diesel Fuel.”

Trump claimed the releases would help lower diesel prices for US farmers, ranchers and truckers - key voting blocs ahead of November midterm elections in which costs of living, including for energy, are the dominant issue. 

Maybe, but when one does the math, one has to scratch one's head: the 300K tons released in October amounts to just over 2.2 million barrels of diesel. Considering the US consumes just over 4 million barrels of diesel per day that amounts to half a day of consumption. 

Extending the math for November we get 3.725 million barrels or less than a full day's consumption, and the "1,000,000 tons thereafter" is a little over 4 days of consumption. We doubt the "3,000,000 to be delivered within a short period of time" will ever happen, so in reality Putin will sell the US just over 5 days of Diesel consumption.

The market's kneejerk reaction was favorable with both US and European diesel prices sliding, helping push WTI Crude down by about a buck to $91.

Then again, once the algo reaction fades, we expect carbon-based traders to realize how negligible this "deal" actually is.

The US Treasury Department on Friday said that the Office of Foreign Assets Control is “immediately issuing a temporary general license to allow the supply of Russian diesel to the global market” which will extend until April 2027.

Last but not least, what will most likely end up happening in the real world, is that Putin will send out a diesel tanker, and once Ukraine drones it, the deal will promptly fall apart. 

There is a comforting story going around credit desks about Oracle's data center problems: if the buildings are late, the capex is late too, and that buys the balance sheet some time.

Morgan Stanley isn't buying it.

In a new note titled "ORCL Credit: Lighthouse in the Fog" (available to pro subs), MS credit analysts Lindsay Tyler and Benjamin Guerrero pick up where we left off on Tuesday, when we reported that Oracle's 1.3GW "Project Lighthouse" campus in Port Washington, Wisconsin was next in line to slip after Project Jupiter's force majeure.

Their conclusion was blunt: a delay, Tyler told Bloomberg in an interview, "also means delayed monetization and delayed proof of concept, delayed revenue, delayed cash flow." For a company with over $600 billion of future revenue tied to AI data center construction, that's the whole investment case.

That matters because of who is saying it. Tyler is the analyst who told clients to buy protection on Oracle a year ago, back when its 5Y CDS cost about 125bps, and who warned at the time that it could hit 150bps and then approach 200bps "as the new year progresses." On Thursday Oracle CDS closed at a record 261bps, which implies a more than 20% probability of default over the next five years. For an "investment grade" company. 

Let's take a closer look at what MS says a delay actually costs Oracle, why the site that worries us most is the one that's almost finished, and why the "capex relief" crowd may be counting the wrong thing.

2H27? Try Mid-2028

The Wisconsin story will be familiar to regular readers. Lighthouse is one of two Vantage campuses being built for Oracle to lease: four buildings, about 902MW of critical IT load, contracted in September 2025. The shells are going up just fine. Oracle even put a drone shot of the site in its June earnings deck to show off its "massive progress":

The problem, as we explained Tuesday, is that there is nothing to plug them into. The campus needs Wisconsin PSC approval for new ATC transmission lines to bring grid power via We Energies (a WEC subsidiary). The PSC revoked its completeness finding on ATC's application in August, the case was closed, and ATC refiled on a new docket, restarting the clock. Citing the Aterio analysis we broke down this week, MS writes that there is "a material risk that meaningful load is not available until mid-2028." That compares with Oracle's June guidance for initial delivery in 2H CY27, and its September earnings call description of the project as "very much on track and going well."

Very much on track... in the same way Jupiter was "on schedule" when Oracle sent its developer a force majeure notice.

MS also flags a detail we flagged on Tuesday: WEC said Oracle's S&P downgrade triggered additional collateral, "with the current rating already requiring full credit support." In other words, Oracle is posting cash to the utility for power it won't get until 2028.

And Wisconsin isn't alone. MS points out that power, not construction, is the bottleneck at both Lighthouse and Jupiter, and that Oracle (or a subsidiary) appears to be the directly contracted party for power at both.

At Jupiter, the fix now involves trucks: as we reported yesterday, Oracle is weighing hauling compressed natural gas to the New Mexico campus by road until Energy Transfer's rerouted pipeline shows up next year, at roughly four times the price of pipeline gas. The stock slid as much as 6% on the headline, prompting the obvious question:

*ORACLE MAY TRUCK GAS TO SITE IN PLACE OF DELAYED PIPELINE *ORACLE SHARES EXTEND DECLINE TO AS MUCH AS 6.1% Did OpenAI come up with that?

— zerohedge (@zerohedge) October 8, 2026

None of this should come as a shock. Back in December, Bloomberg reported that some Oracle data centers for OpenAI were being pushed to 2028 from 2027. Oracle denied it, and the stock rebounded. Ten months later the bank with a sell on the debt is talking about mid-2028. Funny how that works if you just pay attention to the denials.

Why A Delay Is Not "Capex Relief"

The bulls' argument is simple: if the power is late, the GPUs are late, and Oracle spends less cash for a while. Barclays made this case after Jupiter, noting that roughly $30 billion of hardware capex is "typically spent 2-3 months ahead of the asset going live," which is why it declared the force majeure credit-neutral the day before Oracle CDS blew out to a record.

Tyler concedes that a delay "could push associated GPU and infrastructure spending to the right, which could be helpful from a technical supply lens." Then she lists four reasons why that is the wrong way to look at it:

1. Revenue and cash-flow realization would be deferred, extending the period before confirmation that ORCL's substantial investment and contracted backlog are translating well into meaningful financial results.

2. Delays could make the eventual balance-sheet and cash-flow impact more lumpy. If multiple halls are construction-ready by the time power is secured, ORCL could face more concentration in GPU capex (i.e., cash needs) and lease liabilities (i.e., balance-sheet obligations).

3. Just as there is limited visibility into the underlying lease and financing documents, there is also limited visibility into the contractual terms supporting ORCL's RPO. It remains unclear whether customers have specified compute delivery timelines or what remedies may apply for delays.

4. We consider whether any execution-risk overhang may spread to customer behavior and in turn pressure prepayments, an important potential future funding source for ORCL, either by affecting new RPO signings or customers' willingness to re-contract.

Point two is the one that should keep bondholders up at night. The capex isn't cancelled, it's bunched. If four Wisconsin buildings are finished and waiting when the transmission line finally shows up in 2028, Oracle has to fill all of them with GPUs and start paying rent on all of them at roughly the same time, quite possibly while Jupiter's halls are coming online too. Delay doesn't shrink the bill; it compresses it into fewer quarters.

And Oracle's cash needs are already stretched. Oracle borrowed roughly $43 billion in fiscal 2026 (ended May 31) and expects to raise another $40 billion of debt and equity in the current fiscal year, according to its filings. In her September 11 note "ORCL Credit: New Bookings, Old Bills" (available here for pro subs), Tyler estimated that Oracle's parent funding needs "may require two large bond deals by FY28-end even if ORCL receives ~$40bn more customer prepayments":

Which brings us to points three and four. Prepayments from customers (read: OpenAI) are one of the biggest funding sources in that bridge. If delays make customers less willing to prepay, or to sign up again when the contract rolls, the "new bookings" part of the equation shrinks while the "old bills" do not. And as Tyler notes, nobody outside Oracle knows what its $600 billion-plus RPO actually says about delivery dates, or what happens if they're missed.

Investors are being asked to take on faith a backlog roughly the size of Sweden's GDP.

The Site That Worries Us Most Is The One That's Almost Done

Here is the part of the note that got less attention in the Bloomberg write-up, and the part we think matters most. MS reminds clients that Lighthouse and Shackelford County, Texas are funded through the ~$38 billion Vantage construction loan first reported in September 2025, which is part of about $65 billion of shorter-dated loans for Oracle-tied sites, on top of the $14 billion Related Digital (RDMICH) bond backing Michigan:

As with Jupiter, Tyler writes, "limited visibility into the financing and lease documents makes it difficult to assess how delay consequences, if any, would be allocated among developers, ORCL, lenders, and other counterparties." Then comes the money line:

We continue to consider whether greater focus on project delays could spill into ORCL CDS hedging, and whether execution concerns – alongside higher rates and a growing DC construction debt pool – could complicate the eventual refinancing of Abilene debt into longer-dated paper as the project nears completion (6 of 8 buildings delivered).

Abilene is the flagship Stargate site and the one that actually works: six of eight buildings delivered. But its $9.4 billion of construction loans are, per our covenant comps, interest-only and all due in 2028.

That paper has to be taken out with long-dated debt priced off Oracle's credit, and Oracle's credit is now trading at junk-like levels with the 10Y Treasury yield having hit 5.33% last week, the highest since 2002. Translation: the problem isn't just the sites that are late; it's that the late sites make the finished site harder to refinance.

Here is how the roughly $79 billion stacks up by site. Note how much of it sits on campuses where the power is late:

Put differently, $33 billion of construction debt, or about 40% of the total, sits on the two sites where power delays have now been flagged, and that's before counting Shackelford, where Oracle is already trucking in gas for initial work. Three of the four bank deals are short-dated loans against 15-19 year leases, i.e., a bet that Oracle can be refinanced in 2028-2032 at today's spreads. Today's spreads are not what they were when those loans were signed.

The Hedgers Are Already Here

As for whether delays "spill into ORCL CDS hedging," the market seems to have answered that one before the note hit inboxes. A year ago MS argued that construction loans on Oracle-leased sites would become a major source of CDS demand, as banks stuck with the loans hedged their exposure. That is exactly what has happened. Goldman's credit desk said last week that AI single-name CDS volumes are up 400% year over year, with Oracle at the top of the list, and on Thursday morning we put out this chart as Oracle's entire credit curve repriced:

By Thursday's close, CDS had widened another 10.5bps to a record 261bps, more than double where MS first told clients to buy protection, while the 2056 bonds sit around 82 cents and yield over 8.3%. For context, Oracle CDS hit what were then "Lehman crisis levels" last December. It is now roughly 100bps wider than that.

Nor is it just Oracle's own problems. As we noted yesterday, Oracle is in talks with Apollo and Goldman to fund a big chip purchase through an off-balance sheet vehicle, joining SpaceX and Broadcom in what we called the AI chip-debt SPV stampede. That may ease near-term borrowing at the parent, but it also adds yet another layer of Oracle-linked paper competing for the same credit buyers who will one day be asked to refinance Abilene.

Bottom Line

To be fair to Oracle, Lighthouse's timing is still "broadly consistent" with Vantage's 2028 full-campus completion target, as MS notes, and the bank stresses its negative view "pre-existed the project delays" and is based on fundamentals. But that is precisely the point: the fundamentals were already stretched before the gas had to come by truck.

As Goldman's TMT desk put it after Jupiter, third-party-developed AI infrastructure "is not always the bond-like asset class it can appear to be." Morgan Stanley's note shows why: every month of delay pushes out the revenue, bunches up the capex, and makes the eventual refinancing of the one finished campus a bit harder.

Having warned that AI is now a debt bubble too since last October, we think the capex-relief camp has it backwards. Delays don't cut the bill, they only push it into the 2028 refinancing window, right when Abilene's loans come due. The next tests: the PSC's completeness ruling on ATC's refiling, due October 19, and whether Oracle's fiscal second-quarter results in December bring a funding plan or just more pictures of steel. Then again, the last time Oracle was asked about delays, it simply denied them.

Much more in the full Morgan Stanley "ORCL Credit: Lighthouse in the Fog" and "ORCL Credit: New Bookings, Old Bills – FY1Q27 Quick Takes" notes, both available to pro subs.

Local news outlet El Español reports that Spain's National Court denied release for Jim "Fergie" Chambers, the communist centimillionaire and heir to the massive Cox media fortune, for the fourth time, citing a flight risk while US authorities seek his extradition over allegations of financing Hamas and money laundering. 

Chambers, an heir to the US billionaire family behind Cox Enterprises, has been detained since early July. He has been accused by the US government of transferring $7.5 million to Hamas from the US to Tunisia.

Here's more from the outlet:

The events allegedly took place while Chambers was visiting Tunisia. In fact, he was received at the Iranian Embassy in that country, as revealed by the National Court in a new ruling issued this Friday.

. . . 

Furthermore, the resolution issued this Friday by the National Court details that "associates" of the defendant allegedly admitted that Iran intended to "obtain money from him" and that Chambers was open to joining "global terrorist activities".

On the other hand, the US accuses him of having participated in "direct actions" against the company Elbit Systems, an Israeli arms manufacturer , whose office allegedly became one of the "targets of the campaigns" of the accused and his "associates".

Related:

• Spain Clears Way For US Extradition Case Against Cox Media Heir Turned Communist Financier

We profiled Chambers in July, shortly after he was arrested, and noted that he was a major funder of America's radical left and had been described by pro-Palestinian activist Laith Marouf as "the new Soros."

Chambers founded the Babochki Collective and was a major backer of Stop Cop City, Palestine Action US (later renamed Unity of Fields), and related legal defense efforts. He allegedly funded bail, legal fees, and direct-action campaigns targeting police-training projects and Israeli-linked defense firms, while also building networks with far-left activists.

A communist and a convert to Islam from New York, Chambers allegedly used his $250 million fortune to fund "revolutionary organizing."

City Journal's Stu Smith wrote in a recent report, "Chambers is one of the main funders of America's radical Left. His money has flowed to a host of projects in the "anti-imperialism" organizing space," adding, "Chambers claims that he and Singham are effectively the two primary financiers of the US radical left." 

?? Fergie Chambers, heir to the Cox media fortune and a major funder of militant pro-Palestine groups, was detained in Spain as the Trump administration seeks his extradition on federal charges carrying up to 30 years in prison. https://t.co/4YrIyZSR8q

— Stu Smith (@thestustustudio) July 13, 2026

A recent New York Post article mapped out a multi-agency Treasury task force focused on stripping NGOs of tax-exempt status, including George Soros' far-left Open Society Foundations, the Southern Poverty Law Center, and the Council on American-Islamic Relations. 

A magnitude 8.0 earthquake struck Panama at around 1:56 p.m. EST, according to the US Geological Survey. 

Notable quake, preliminary info: M 8.0 - 14 km SW of Pitaloza Arriba, Panama https://t.co/qnQAspzMXy

— USGS Earthquakes (@USGS_Quakes) October 9, 2026

What's known so far:

Alerts:

Tsunami Info Stmt: M8.0 General Area of Panama 1056 PDT Oct 9: Potential to generate destructive tsunamis; CA,OR,WA,BC,and AK

— NWS Tsunami Alerts (@NWS_NTWC) October 9, 2026

The preliminary epicenter was located about 8.7 miles southwest of Pitaloza Arriba, at a depth of 20.5 miles.

The epicenter is about 122 miles southwest of Panama City. The immediate damage report is unknown. 

Commerical travel is being diverted:

Planes are being diverted from Panama after the M7.6 earthquake that struck Southern Panama https://t.co/aufk5L6mTD

— Faytuks Network (@FaytuksNetwork) October 9, 2026

First footage surfacing on X: 

Señor temblor que se acaba de sentir en Ciudad de Panamá. Cc @tvnnoticias https://t.co/Pfe5FP6ZoV

— Freddy Pitti (@freddypitti) October 9, 2026

Llegan más imágenes del Terremoto en Panamá de 7.6 (actualizado en los ultimos minutos) https://t.co/KfxHsI19vb

— Ernesto (@ernestojmro) October 9, 2026

#Atención Un terremoto de magnitud 8.0 se acaba de registrar en Panamá. https://t.co/iYVFfy4lZD

— BluRadio Colombia (@BluRadioCo) October 9, 2026

Today's massive quake follows Venezuela's June twin quakes, Colombia's August earthquake, and Peru's August quake.

*Developing...