Key Takeaways:
The U.S. military struck Iran for the third time this week after Tehran closed the Strait of Hormuz, threatening a waterway that carries about a fifth of the world's traded oil.
U.S. Central Command said its forces began a new round of strikes against Iran on Saturday evening, hours after Iran's Islamic Revolutionary Guard Corps announced it had closed the Strait of Hormuz "until further notice." The escalation followed Iran's warning shot that struck a Cyprus-flagged container ship traveling what Tehran called an unauthorized route, causing significant engine room damage and leaving one civilian crew member missing.
"The United States is imposing a heavy cost by continuing to degrade Iran's ability to attack civilian mariners and commercial ships freely transiting the strait," the American military said in a statement. Defense Secretary Pete Hegseth posted on social media: "Iran made a poor choice. Now they pay."
Iran's IRGC navy said several vessels attempted to move through the waterway on an unauthorized route and disregarded warnings to correct course. One vessel "was struck by a warning shot and brought to a halt," the IRGC said, adding that the strait would remain closed until "the end of U.S. interference in this region." Iran state media reported explosions in Bandar Abbas and Sirik, two towns along the strait's shores.
The Strait of Hormuz handled about 21% of global oil supply before the war began in February, and Iran's effective blockade during the conflict triggered a global energy crisis that pushed crude above $120 a barrel. Oil prices have since retreated from those wartime highs, though the renewed closure threatens to reverse those declines. Bitcoin and ether showed minimal movement in response to the strikes, with traders assessing whether the escalation would trigger broader risk-off positioning across digital assets.
Diplomatic Efforts Collapse Into Military Exchange
The latest flurry of strikes followed a meeting Saturday between Iranian Foreign Minister Abbas Araghchi and his Omani counterpart Sayyid Badr Albusaidi to discuss "appropriate mechanisms for the safe passage of ships through the Strait of Hormuz." Oman's state news agency said negotiators would continue talks "at the technical and political levels," but the diplomatic window closed within hours as both sides resumed military action.
A senior Iranian source told Reuters that Iran, the U.S., Qatar and Pakistan had agreed to negotiate in a call that mediators were trying to arrange for Saturday. It was not immediately clear whether those efforts succeeded. CNN reported that Oman had drafted a proposal for free navigation through its southern corridor in Omani territorial waters, with vessels transiting the northern corridor through Iranian waters requiring prior approval from Tehran — though no tolls would be imposed.
Iran's top diplomat accused Washington of violating the interim ceasefire deal by ending waivers that allowed Iran to sell crude oil on the open market in U.S. dollars. "Reality check: There can only be mutual compliance," Araghchi wrote on social media. The U.S. revoked the license authorizing Iranian crude sales on Tuesday after commercial tankers came under fire earlier in the week.
New Supreme Leader Vows Vengeance
Iran's new supreme leader, Ayatollah Mojtaba Khamenei, issued his first statement since the funeral of his father and predecessor, Ayatollah Ali Khamenei, who was killed in the war's opening strikes on Feb. 28. "We pledge to avenge the blood of the martyred leader and all the martyrs," the statement said, vowing that vengeance "is the will of our nation and must certainly be carried out."
President Donald Trump responded by posting on Truth Social that "1000 Missiles are Locked and Loaded and aimed at the Islamic Republic of Iran, with thousands of more to immediately follow, should the Iranian Government act on its threat." Such retaliation would require Vice President JD Vance to order it if Trump were killed, according to earlier reporting. The Wall Street Journal reported this week that Israel had shared intelligence with Washington that Iran had recently devised a plan to assassinate Trump.
The strikes over two days killed at least 17 people and wounded 115 others in Iran, according to Iranian Health Ministry spokesperson Hossein Kermanpour. Iran retaliated for earlier U.S. strikes by targeting Bahrain, Jordan, Kuwait and Qatar. After the U.S. wrapped up strikes on Thursday, additional attacks hit Iran that neither Israel nor the U.S. claimed, raising the possibility that Gulf Arab states launched them as a deterrent against further Iranian aggression.
The last time the Strait of Hormuz faced a sustained closure was during the Iran-Iraq war in the 1980s, when the Tanker War disrupted shipping and contributed to a doubling of crude prices over 18 months. The current escalation casts further doubt on the interim agreement aimed at ending the conflict, with Trump declaring "the Cease Fire is OVER" while simultaneously agreeing to continue talks — a contradiction that leaves traders guessing at the next policy move.
This article is for informational purposes only and does not constitute investment advice.
