U.S. military expands strikes on Iran as Strait of Hormuz tensions lift oil prices

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US strikes and oil tensions

Highlights

U.S. Central Command conducts strikes on over 80 Iranian military targets and dozens of vessels after Iran attacks commercial ships in the Strait of Hormuz.
Brent crude surges 6.6 per cent to $79.06 in after-hours trading as renewed clashes disrupt expectations for increased oil shipments through the strait.
Iran’s Islamic Revolutionary Guard Corps retaliates with missile and drone strikes on 85 U.S. military sites, escalating risks to regional energy flows and shipping.

Escalation after ship attacks and ceasefire breakdown

As reported by Financial Times, the U.S. military says it launches strikes against Iran for a second straight day after Iran attacks commercial vessels in the Strait of Hormuz. U.S. Central Command says the additional action aims to further degrade Iran’s ability to threaten freedom of navigation in the waterway.

Centcom says the U.S. hits more than 80 Iranian military targets on Tuesday night and later targets dozens of Iranian fast boats, underground missile facilities, coastal defence positions, and radar and surveillance sites. Trump says the strikes are retaliation for Iran’s bombing of ships and warns that any repeat would bring a stronger response.

Speaking at the Nato summit in Ankara, Trump says he considers the ceasefire with Tehran to be over, although he adds that he does not expect a return to full-scale war. Vice-president JD Vance says the U.S. will keep striking Iran until the issue is resolved and that shipping through the strait must remain open.

Iran’s Islamic Revolutionary Guard Corps says its forces respond to the earlier U.S. attacks with missile and drone strikes targeting 85 sites at U.S. military facilities in the Middle East. Trump also says the U.S. hits Kharg Island during Tuesday’s operation and repeats a threat to take over the export hub, through which about 90 per cent of Iran’s oil is exported.

Oil market impact and diplomatic uncertainty

The latest clashes fracture a ceasefire that had promised to reopen the strait more fully to oil shipments, adding fresh volatility to global energy markets. Brent crude rises 6.6 per cent in after-hours trading to $79.06, after earlier moving above $80 for the first time in more than two weeks.

Since the latest ceasefire agreement in mid-June, Iran has attacked five vessels in the strait, including tankers belonging to Saudi Arabia and Qatar. The waterway previously carries about a fifth of the world’s oil and gas, making any sustained disruption a direct risk for importers, exporters and shipping insurers across the region.

At the Nato summit, many alliance leaders avoid public comment on the strikes, but secretary-general Mark Rutte says they are absolutely necessary to punish Iran for breaching the ceasefire. Trump, despite renewed criticism of Nato in the past, calls the meeting very successful and says fellow leaders show strong support.

He also leaves open the possibility of diplomacy with Tehran. Although Trump says he is not sure he wants to make a deal, he says his negotiators, including Vance, special envoy Steve Witkoff and Jared Kushner, may continue talks.

Our earlier coverage of the Strait of Hormuz transit dispute explained how the June 17 interim arrangement to reopen the waterway was already faltering over disagreements about shipping corridors and who controls passage. We noted that the unresolved routing rules were fueling tit-for-tat strikes, disrupting oil flows, and complicating diplomacy aimed at a broader settlement, including talks tied to Iran’s nuclear programme.

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