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Most Gulf area economies face deeper downturns this year on Hormuz disruption
Most Gulf area economies face deeper downturns this year on Hormuz disruption BENGALURU - Most Gulf economies will contract more sharply this year than expected three months ago before rebounding in 2027, a Reuters poll found, as crumbling hopes of a quick U.S.-Iran de-escalation keep the Strait of Hormuz - the region's oil and gas export lifeline -largely closed. The July 7-16 survey of economists was taken as many abandoned assumptions Gulf shipping and energy exports would quickly normalise. Trump's latest blockade of Iranian shipping and repeated disruptions around Hormuz have lifted oil prices nearly 20% this month to about $85 a barrel. For Gulf Cooperation Council producers, the shock is less about the price of oil than the ability to sell and ship it. Higher crude prices support revenues, but they are not fully offsetting lost export volumes, costlier freight and weaker investor confidence. Kuwait and Qatar suffered the sharpest forecast downgrades, with both economies now expected to slump 8.1% this year, median forecasts showed, compared with contractions of 4.4% and 6.0% in a poll taken in April. Bahrain's economy will shrink 5.1%, sharper than the 2.9% predicted three months ago, while that of the United Arab Emirates (UAE) is forecast to contract 0.5% after economists had previously predicted stagnation. Saudi Arabia and Oman are the only GCC economies still expected to expand this year, as Saudi can move oil via its East-West pipeline to the Red Sea while Oman's export terminal sits outside the Hormuz Strait, limiting their exposure to the shipping disruption. The Kingdom's economic growth estimate was cut to 1.4% from 2.6%, below the IMF's latest projection of 1.7%, while Oman's was raised to 3.1% from 2.2%. Estimates varied widely, from a 4.3% contraction to 4.1% growth for Saudi Arabia and from a 2.1% decline to 4.1% expansion for Oman. "I would be quite cautious about taking Gulf GDP forecasts at face value right now," said Marwan Barakat, group chief economist and head of research at Bank Audi. "The issue is not only the level of oil prices or interest rates, it is the physical ability to move hydrocarbons, goods and people through one of the world's most important chokepoints." "If the disruption remains short-lived then we are likely to see a sharp near-term hit ... followed by a rebound," Barakat said. "But if the disruption becomes prolonged the damage becomes more persistent." The recovery will be swift next year, according to the latest forecasts. Kuwait topped the 2027 list, expected to grow 10.1%, followed by Qatar at 7.8%, Saudi Arabia with 6.0%, the UAE at 5.8%, Bahrain with 4.5% and Oman at 2.8%. "Growth forecasts look strong because they assume tensions with Iran ease and shipping through the Strait of Hormuz gradually returns to normal over the next six to 12 months," said Abdalla Saleh, a senior analyst at Fitch Solutions. "If that happens we would expect a significant rebound in both oil and non-oil parts of GCC economies." Efforts by governments to diversify their economies have been complicated by the crisis. Governments from Riyadh to Abu Dhabi and Doha have spent years pitching investors a post-oil future built on tourism, logistics, finance, technology and real estate. Those sectors provide a buffer against crude-price swings but are exposed to the same conflict-related disruption of airspace, weaker travel, delayed shipments and a higher regional risk premium. "The biggest risk isn't necessarily another major military escalation," said Akanksha Samdani, lead economist at Oxford Economics. "It's the possibility that businesses permanently price in a higher geopolitical risk premium." Inflation forecasts stayed relatively tame. Median expectations put Saudi inflation at 2.1% this year, the UAE's at 2.9%, Kuwait's at 2.7%, Qatar's at 3.2%, Oman's at 2.5% and Bahrain at 1.9%. Dollar pegs, subsidies, price controls and large fiscal buffers have contained the pass-through from elevated freight and insurance charges, while some companies have absorbed elevated costs rather than passing them fully to consumers. (Other stories from the Reuters global economic poll) (Reporting and polling by Anant Chandak; Editing by Jonathan Cable, Ross Finley, Kirsten Donovan) Copyright Reuters or USA Today Network via Reuters Connect. This story was originally published July 17, 2026 at 12:00 AM.
Hopes for US-Iran diplomacy still alive as fighting intensifies over Strait of Hormuz - The Korea Times
WASHINGTON — Fighting between the U.S. and Iran has intensified over control of the Strait of Hormuz, but hopes for a possible diplomatic solution have shown stubborn signs of life. Pakistan’s Foreign Ministry on Thursday rejected suggestions that Islamabad had abandoned efforts to bring Washington and Tehran back to the negotiating table after brokering an initial ceasefire agreement last month that has now collapsed. “Let me dispel the impression that Pakistan has done hands up, and this is not the case,” ministry spokesperson Tahir Andrabi said at a news conference, adding that the parties eventually "will have to come to the negotiating table to settle all outstanding issues.” Even the top negotiators for Iran and the U.S. signaled they have not walked away from talks. In a podcast interview with Joe Rogan that aired Wednesday, Vice President JD Vance said the Trump administration is “not going to bomb and bomb and bomb” and noted that “you’ve got to actually be willing to talk and to try to figure out the problem.” “We’re going try to use our military force as one of the many tools that we have to solve the problem,” Vance said, adding that “diplomacy is another tool.” Mediators from countries that include Pakistan, Qatar and Egypt have been working to resume talks, according to regional officials who spoke on condition of anonymity to discuss the sensitive diplomacy. They noted that neither side has notified Pakistan that it was officially withdrawing or terminating the initial ceasefire agreement . The backchannel efforts have been overshadowed by the escalating attacks, with the U.S. military on Thursday conducting strikes deeper into Iran and firing on a ship that the U.S. accused of trying to break its naval blockade of Iranian ports . Iran has retaliated by launching missiles and drones at U.S. allies in the region and warned that its attacks could grow to target “all the infrastructure in the region.” The U.S. and Iran are in a delicate and potentially pivotal moment that “leaves open the possibility of moving up the escalation ladder,” said Naysan Rafati, senior Iran analyst at the Washington-based International Crisis Group. Push is on for renewing negotiations Andrabi, the spokesman for Pakistan’s foreign ministry, acknowledged that mediation between Iran and the U.S. had become increasingly difficult. But he said peace efforts remained alive. “It can be put on the backburner, but it stays,” Andrabi said, adding that “whenever the parties exhaust the logic of escalation, the formula for peace is there.” The regional officials involved in mediation attempts said efforts to salvage the deal to end the war were continuing this week. They acknowledged that the 60-day negotiating process spelled out in the interim deal has halted. But they said mediators have been working to persuade both sides to return to the negotiating table. Officials say the key point of dispute is management of the Strait of Hormuz , the crucial energy shipping route that is Tehran’s greatest source of leverage . The language in the interim deal is vague. Iran claims it has the authority to arrange shipping transit through the strait, while the U.S. says the waterway is meant to be open to free passage and has tried to arrange an alternate shipping route along Oman’s coast. In his interview with Rogan, Vance acknowledged that diplomacy might ultimately be the only way forward. “I’m very frustrated by the Americans and frankly by people in other countries who are like, ‘You cannot negotiate with the Iranians,’” the vice president said. “Well, then what is your proposal to get people to stop shooting at ships in the Strait of Hormuz?” Trump increases threats and says Iran ‘better behave’ The fighting resumed over Iran’s unwillingness to allow oil tankers and other commercial vessels to navigate freely through the Strait of Hormuz, a vital Persian Gulf shipping route through which 20% of the world’s oil normally flows. Iran effectively choked off the usual stream of commerce by attacking commercial vessels that ignored its rules, disrupting world energy markets and driving up prices that could pose problems for Republicans in November’s midterm elections. Asked by reporters in recent days if he is still open to negotiations, Trump has repeated his previous threats that Iran returning to the table is the only thing that can avoid U.S. attacks on civilian infrastructure like bridges and power plants. But the Republican president said he would not put a timeline on it. “I don’t like giving deadlines, but they pretty much know, they know the story,” Trump said in Pennsylvania on Wednesday. “They better behave.” Moments before, Iran’s parliament speaker and lead negotiator said the country is not declaring last month’s interim deal void. But Mohammad Bagher Qalibaf said Iran’s commitment depends on continued implementation by the United States. If Washington fails to honor its obligations, Iran would have no reason to remain bound by it, he argued. The initial June 17 agreement called for a permanent end to hostilities and a reopening of the strait and started a 60-day negotiating clock to reach a final deal on the future of Iran’s nuclear program and other issues. Qalibaf also suggested that Iran is not seeking to keep the Strait of Hormuz closed indefinitely. He said Tehran’s objective is to preserve what he called “Iranian arrangements” governing navigation through the waterway, while allowing the maximum safe passage of commercial shipping under those rules. US tries naval blockade, more strikes to reopen Strait of Hormuz — again To stop Iran’s attacks on ships, Trump has stepped up military attacks and reinstituted an earlier Navy blockade of Iranian ports to inflict economic pain. But it would be unrealistic to expect the U.S. to eliminate Iran’s ability to launch missiles and drones into the strait anytime soon, said Bradley Bowman, a former Army helicopter pilot and now a scholar at the Foundation for Defense of Democracies, a hawkish Washington think tank. “Unfortunately, Iran only needs to hit a ship every now and then to create serious problems and dilemmas for insurers and ship captains and reduce the flow of traffic in the strait,” he said. “That reduced flow exerts significant economic and political pressure on Washington, especially as midterm elections approach. Iran understands the leverage it now has — and so does Trump.” At the same time, Bowman and other experts are not convinced that more strikes and economic pressure will get Iran to negotiate. “We’re doing things that have not affected Iranian behavior in the past,” said Mark Cancian, a retired Marine colonel and a senior defense adviser with the Center for Strategic and International Studies. “So why would it affect Iranian behavior now?”
Oil rises on renewed US-Iran hostilities and threat of Red Sea closure
LONDON, July 17 : Oil prices rose by about 2 per cent on Friday after the U.S. and Iran stepped up attacks across the Gulf, with shipping threatened by a potential Red Sea closure on top of the restricted traffic through the Strait of Hormuz. Brent crude futures rose by $1.53, or 1.82 per cent, to $85.76 a barrel by 0951 GMT. U.S. West Texas Intermediate futures gained $1.69, or 2.14 per cent, to $80.64. Both benchmarks have climbed nearly 13 per cent this week, with Brent on track for a third consecutive weekly gain and WTI set for its second. The broken truce between the U.S. and Iran has resulted in a drop in oil flows out of the strait. Iran, meanwhile, has pressed the Houthi movement to close the Red Sea route if the U.S. strikes Iran's power infrastructure. Transit through the Red Sea has increased significantly since the start of the Iran war because of rerouted Saudi oil exports away from Hormuz, Commerzbank analysts wrote. "Should a blockade of the Strait of Bab al-Mandab occur in the wake of further escalation, the price of oil in particular is likely to rise further," they wrote. Iran said it launched fresh strikes on U.S. facilities in the Middle East on Friday, including the first direct attack in Syria, after a sixth straight night of U.S. strikes on Iranian military facilities. U.S. Central Command said on Thursday that American forces had begun a new wave of strikes against Iran to further degrade Iranian military capabilities. "Oil security is still a critical issue," International Energy Agency Executive Director Fatih Birol said on Thursday at a Council on Foreign Relations event in Washington. "We should be worried, and I am worried, if the situation does not improve in the next few weeks," he said. Meanwhile, Qatar's defence ministry said its armed forces thwarted an Iranian missile attack early on Friday and the interior ministry said a child was injured by shrapnel resulting from interception operations. One of Kuwait's power generation and water desalination stations was hit by an Iranian attack, Kuwait's electricity ministry said on Friday.
US military boards oil tanker in Gulf of Oman
U.S. Marines from the 11th Marine Expeditionary Unit, a forward-deployed, rapid-response unit based in California, boarded the M/T Wen Yao, marking the first boarding of a vessel since the naval blockade resumed Tuesday evening, the U.S. Central Command (Centcom) said. So far, U.S. forces in Centcom theater have redirected three commercial vessels attempting to breach the blockade, disabled one ship that didn’t comply and now boarded its first to ensure full compliance with the U.S. naval blockade in the Strait of Hormuz. “The Strait of Hormuz and the surrounding waters remain free and open, except for vessels attempting to violate America’s steel wall blockade,” Centcom said. M/T Wen Yao was sanctioned by the U.S. government in 2024 for purportedly transporting Iranian crude oil and for its assistance to the National Iranian Oil Company. Earlier on Thursday, the U.S. military began conducting another wave of airstrikes against Iran, marking the sixth consecutive day the U.S. has waged attacks against Tehran. White House said that despite the strikes, Iranian officials are still talking to the Trump administration. “Iran very much continues to talk to the United States of America and express that they want to make a deal with us because they are suffering devastating blows on behalf of our United States military,” White House press secretary Karoline Leavitt told reporters during a Thursday White House briefing.
Why is it so hard to open the Strait of Hormuz?
Experts say that fully reopening the waterway will take more than a few dozen warships and the current wave of strikes. “This insinuation that we’re just a couple more days of strikes away from completely removing Iran’s capability to keep the strait closed is completely a fallacy,” according to Jason Campbell, a former Pentagon official now with the Middle East Institute. “The reality is that if you wanted to militarily open the Strait of Hormuz such that … the shipping companies — and as important, the insurance companies that cover them … deem this safe for passage, it would take a major ground operation with tens of thousands of forces,” he told The Hill. Bryan Clark, a senior fellow with the Hudson Institute think tank, told The Hill that in a simulated war game done by the Hudson Institute prior to the conflict, analysts found that the U.S. military would need to utilize combat air patrols over the area to shoot down drones and attack drone launcher sites. Forces would also need protection from the sea-based drones and fast attack boats — which aircraft can only quell to some degree — and a significant armada to escort commercial shipping vessels through the strait. “If the aircraft don’t get either the airborne drone or the sea-based drone, you’ve got to have a destroyer insert itself in there to be able to shoot those things down or shoot them up,” he said. Read more here, from The Hill’s Ellen Mitchell.
Gold price falls as US-Iran hostilities rekindle Fed hike bets
Gold price falls as US-Iran hostilities rekindle Fed hike bets Gold declined as escalating tensions in the Middle East rekindled expectations that the Federal Reserve may need to hike interest rates to contain stubborn inflation. Bullion fell as much as 2.3% to trade below $4,000 an ounce as Iran-US hostilities worsened. The dollar and bond yields pushed higher, weighing on bullion. Brent topped $85 a barrel, climbing for a fourth day and deepening inflation fears. The US struck an oil tanker near Iran’s main export terminal for the first time since the restart of the blockade on the Islamic Republic’s ports. President Donald Trump has pledged to intensify the bombardment until Tehran stops attacking ships in the Strait of Hormuz and agrees to open the waterway. The flare up has rekindled concerns over energy inflation and higher interest rates, sparking pressure for bullion prices. “Precious metals have come under selling pressure as oil prices move back into the $80s/bbl range,” said Ryan McKay, senior commodity strategist at TD Securities. TD’s pricing simulation model shows modest bearish positions in gold, with trend-following commodity trade advisors likely selling again when prices hit around $3,790, according to McKay. Gold has traded around $4,000 an ounce in recent weeks after losing 14% in the second quarter, its worst showing since 2013. That retreat was driven by expectations that the Fed could hike interest rates to manage inflationary pressures driven by the war, creating headwinds for non-yielding bullion. Gold is now roughly 26% below its peak near $5,600 an ounce in January, only its fifth drawdown of more than 25% since 1960, analysts at Morgan Stanley wrote in a report. The bank sees gold prices moving higher, though this is “contingent on the Fed refraining from additional rate hikes,” the analysts said. Spot gold fell 2.1% to $3,974.86 an ounce as of 4:15 p.m. in New York. Silver was down 3.93% to $55.53, with platinum and palladium also trading lower. The Bloomberg Dollar Spot Index rose 0.2%. (By Yvonne Yue Li) {{ commodity.name }} {{ post.title }} {{ post.date }}
Hopes for US-Iran diplomacy still alive as fighting intensifies over the Strait of Hormuz
WASHINGTON (AP) — Fighting between the U.S. and Iran has intensified over control of the Strait of Hormuz, but hopes for a possible diplomatic solution have shown stubborn signs of life. Pakistan’s Foreign Ministry on Thursday rejected suggestions that Islamabad had abandoned efforts to bring Washington and Tehran back to the negotiating table after brokering an initial ceasefire agreement last month that has now collapsed. “Let me dispel the impression that Pakistan has done hands up, and this is not the case,” ministry spokesperson Tahir Andrabi said at a news conference, adding that the parties eventually "will have to come to the negotiating table to settle all outstanding issues.” Even the top negotiators for Iran and the U.S. signaled they have not walked away from talks. In a podcast interview with Joe Rogan that aired Wednesday, Vice President JD Vance said the Trump administration is “not going to bomb and bomb and bomb” and noted that “you’ve got to actually be willing to talk and to try to figure out the problem.” “We’re going try to use our military force as one of the many tools that we have to solve the problem,” Vance said, adding that “diplomacy is another tool.” Mediators from countries that include Pakistan, Qatar and Egypt have been working to resume talks, according to regional officials who spoke on condition of anonymity to discuss the sensitive diplomacy. They noted that neither side has notified Pakistan that it was officially withdrawing or terminating the initial ceasefire agreement. The backchannel efforts have been overshadowed by the escalating attacks, with the U.S. military on Thursday conducting strikes deeper into Iran and firing on a ship that the U.S. accused of trying to break its naval blockade of Iranian ports. Iran has retaliated by launching missiles and drones at U.S. allies in the region and warned that its attacks could grow to target “all the infrastructure in the region.” The U.S. and Iran are in a delicate and potentially pivotal moment that “leaves open the possibility of moving up the escalation ladder,” said Naysan Rafati, senior Iran analyst at the Washington-based International Crisis Group. The push is on for renewing negotiations Andrabi, the spokesman for Pakistan’s foreign ministry, acknowledged that mediation between Iran and the U.S. had become increasingly difficult. But he said peace efforts remained alive. “It can be put on the backburner, but it stays,” Andrabi said, adding that “whenever the parties exhaust the logic of escalation, the formula for peace is there.” The regional officials involved in mediation attempts said efforts to salvage the deal to end the war were continuing this week. They acknowledged that the 60-day negotiating process spelled out in the interim deal has halted. But they said mediators have been working to persuade both sides to return to the negotiating table. Officials say the key point of dispute is management of the Strait of Hormuz, the crucial energy shipping route that is Tehran’s greatest source of leverage. The language in the interim deal is vague. Iran claims it has the authority to arrange shipping transit through the strait, while the U.S. says the waterway is meant to be open to free passage and has tried to arrange an alternate shipping route along Oman’s coast. In his interview with Rogan, Vance acknowledged that diplomacy might ultimately be the only way forward. “I’m very frustrated by the Americans and frankly by people in other countries who are like, ‘You cannot negotiate with the Iranians,’” the vice president said. “Well, then what is your proposal to get people to stop shooting at ships in the Strait of Hormuz?” Trump increases the threats and says Iran ‘better behave’ The fighting resumed over Iran’s unwillingness to allow oil tankers and other commercial vessels to navigate freely through the Strait of Hormuz, a vital Persian Gulf shipping route through which 20% of the world’s oil normally flows. Iran effectively choked off the usual stream of commerce by attacking commercial vessels that ignored its rules, disrupting world energy markets and driving up prices that could pose problems for Republicans in November’s midterm elections. Asked by reporters in recent days if he is still open to negotiations, Trump has repeated his previous threats that Iran returning to the table is the only thing that can avoid U.S. attacks on civilian infrastructure like bridges and power plants. But the Republican president said he would not put a timeline on it. “I don’t like giving deadlines, but they pretty much know, they know the story,” Trump said in Pennsylvania on Wednesday. “They better behave.” Moments before, Iran’s parliament speaker and lead negotiator said the country is not declaring last month’s interim deal void. But Mohammad Bagher Qalibaf said Iran’s commitment depends on continued implementation by the United States. If Washington fails to honor its obligations, Iran would have no reason to remain bound by it, he argued. The initial June 17 agreement called for a permanent end to hostilities and a reopening of the strait and started a 60-day negotiating clock to reach a final deal on the future of Iran’s nuclear program and other issues. Qalibaf also suggested that Iran is not seeking to keep the Strait of Hormuz closed indefinitely. He said Tehran’s objective is to preserve what he called “Iranian arrangements” governing navigation through the waterway, while allowing the maximum safe passage of commercial shipping under those rules. US is trying a naval blockade and more strikes to reopen the Strait of Hormuz — again To stop Iran’s attacks on ships, Trump has stepped up military attacks and reinstituted an earlier Navy blockade of Iranian ports to inflict economic pain. But it would be unrealistic to expect the U.S. to eliminate Iran’s ability to launch missiles and drones into the strait anytime soon, said Bradley Bowman, a former Army helicopter pilot and now a scholar at the Foundation for Defense of Democracies, a hawkish Washington think tank. “Unfortunately, Iran only needs to hit a ship every now and then to create serious problems and dilemmas for insurers and ship captains and reduce the flow of traffic in the strait,” he said. “That reduced flow exerts significant economic and political pressure on Washington, especially as midterm elections approach. Iran understands the leverage it now has — and so does Trump.” At the same time, Bowman and other experts are not convinced that more strikes and economic pressure will get Iran to negotiate. “We’re doing things that have not affected Iranian behavior in the past,” said Mark Cancian, a retired Marine colonel and a senior defense adviser with the Center for Strategic and International Studies. “So why would it affect Iranian behavior now?” ___ Amiri reported from New York, Magdy from Cairo and Ahmed from Islamabad. Associated Press writer Josef Federman in Jerusalem contributed to this report.
US widens Iran strikes northwards as Hormuz tensions spread to allies
US widens Iran strikes northwards as Hormuz tensions spread to allies The United States widened its strikes into northern Iran and targeted a tanker near Tehran's oil lifeline. Iran answered with attacks on US-backed regional partners, raising the risk of a broader Hormuz crisis. The United States intensified its strikes on Iran on Thursday, hitting targets farther north for the first time in the latest round of fighting and firing at a ship Washington accused of trying to breach its naval blockade. Iran responded with missiles and drones aimed at US allies in the region and warned that its attacks could widen. The latest escalation came after an interim ceasefire agreed last month collapsed, triggering days of back-and-forth attacks between the US and Iran over control of the Strait of Hormuz. Iranian officials said US strikes have killed more than 35 people and injured over 300, while shipping through the vital waterway has fallen sharply and oil prices have risen. Iranian state media said Thursday's US strikes hit areas around Tehran and Semnan province, which is home to Iran's ballistic missile production and space programme. It also reported attacks around Hamedan, Hormozgan, Khuzestan, Lorestan, Markazi and Sistan and Baluchestan provinces, as well as Qeshm island near the Strait of Hormuz. US Central Command said an attack on Greater Tunb Island targeted Iranian defence and missile sites. Greater Tunb is one of three small islands at the meeting point of the Persian Gulf and the Strait of Hormuz. Seized by Iran in 1971 from what would become the United Arab Emirates, the islands help Tehran exert significant control over the strait. The US military also said it disabled a Curacao-flagged oil tanker that was sailing towards Iran's main oil export terminal, firing a missile after the ship "ignored multiple warnings". Separately, Iranian state television said another American strike on Wednesday hit a barracks of Iran's 388th Mechanised Infantry Brigade in Sistan and Baluchestan province, killing seven people, including conscripts and career soldiers. Iranian military spokesperson Col. Ebrahim Zolfaghari said Iran could launch widespread attacks on "all the infrastructure in the region" if the US acts on President Donald Trump's repeated warnings that America could hit Iranian bridges and power plants. "Under no circumstances and in no way will we allow America, as a foreign and extraregional country, to interfere in the Strait of Hormuz," he said. "This is Iran's invincible red line." Iran retaliated on Thursday with missile and drone attacks on Bahrain, Jordan and Kuwait, authorities in those countries, which host US forces, said. There was no immediate acknowledgement of damage or casualties. Iraqi Prime Minister Ali al-Zaidi condemned an overnight drone attack in Iraq's semi-autonomous northern Kurdish region. Authorities said the drone was intercepted. It came during his trip to the US, where he said Iraq would work to disarm non-state armed groups, including those backed by Iran. A separate drone also targeted a tanker in the Persian Gulf off Basra in southern Iraq on Thursday afternoon, the state-run INA news agency reported. No casualties were reported. The current fighting is centred on the Strait of Hormuz after Iran began attacking ships using a US-controlled route through the waterway. When the US and Israel launched the war on Iran on February 28, Tehran effectively closed the strait to shipping, sending oil prices sharply higher and giving Iran leverage in negotiations. Lloyd's List Intelligence said weekly cargo shipments through the strait fell by almost a quarter at the start of the month, even before the latest surge in attacks. It said some shippers were moving through the strait with location devices turned off, while many others were staying put. Although more energy is now moving through pipelines, Lloyd's said it is not nearly enough to make up for the fall in shipping. Brent crude, the international benchmark, traded above USD 85 a barrel on Thursday, more than 15 per cent above its level before the war, though still below the nearly USD 120 reached at the height of the conflict. The US reimposed a naval blockade on Iranian ports on Wednesday, even as Trump said a deal remained possible. "They don't like what we're doing, and they do want to settle. We'll find out whether or not we settle with them, or we just finish it off," he said at the US Army War College in Pennsylvania. Pakistan's Foreign Ministry said on Thursday that efforts were still under way to bring Washington and Tehran back to the negotiating table, though it acknowledged that this was becoming increasingly difficult. Trump also said on social media that Tehran had made a goodwill gesture by releasing an American citizen detained in Iran since 2024. Human rights lawyer Jared Genser identified the detainee as his client Dena Karari, a US-Iranian citizen who runs a non-profit and was charged with espionage. Iran did not immediately acknowledge the release, and the case had not been publicly known. With strikes now reaching areas around Tehran, retaliation spreading to US allies and shipping in the Strait of Hormuz under growing pressure, the conflict has widened even as both military action and diplomatic efforts continue in parallel. With PTI Inputs
Iran-US interim deal collapses as Hormuz fighting and shipping crisis deepen
Iran-US interim deal collapses as Hormuz fighting and shipping crisis deepen The Iran-US interim deal has broken down as airstrikes, shipping attacks and the blockade return. The collapse has stalled nuclear negotiations, revived oil sanctions and deepened instability around the Strait of Hormuz. The conflict between Iran and the United States has intensified in recent days, and an interim agreement meant to stop the fighting has collapsed less than a month after it was signed. The Memorandum of Understanding was supposed to end military operations, reopen the Strait of Hormuz and pave the way for a permanent peace deal and an agreement on Iran's nuclear programme within 60 days. Instead, fighting has resumed, shipping through the strait remains badly disrupted, the US has restored its blockade on Iranian ports and sanctions relief on Iranian oil exports has been withdrawn. There has also been no public sign of progress towards a final agreement, while the dispute over Iran's nuclear programme remains unresolved. Under the deal, the US, Iran and their allies had declared the "immediate and permanent termination of military operations on all fronts, including in Lebanon" and pledged not to initiate military action against each other. But the US has launched days of airstrikes on Iran in response to its attacks on commercial ships in the Strait of Hormuz. Iran, in turn, has fired at Arab countries hosting American troops. A ceasefire between Israel and Lebanon's Iran-backed Hezbollah, reached shortly after the Iran agreement, has largely held despite renewed hostilities elsewhere. The agreement also said Iran would use its best efforts to ensure the safe passage of commercial vessels through the Strait of Hormuz for 60 days without charge, with traffic to resume immediately and be fully restored within 30 days after technical and military obstacles were removed and demining was carried out. It also said Iran would hold talks with Oman and other Gulf states on the future administration and maritime services of the strait in line with international law and the rights of coastal states. That clause appears to have become the main point of dispute. Iran says it gives it the right to manage traffic through the strait and possibly charge tolls after 60 days. The US and others reject that interpretation and say the waterway should remain open to all ships without fees, as it was before the war. The US has created an alternative route along Oman's coast and outside Iran's control, but Iran's attacks on ships using that route triggered the latest escalation. Traffic through the strait rose after the deal was signed, but stayed well below pre-war levels and has fallen sharply again in recent days. The MOU had also said the US would begin lifting its naval blockade immediately and end it fully within 30 days, with vessel traffic restored in proportion to pre-war levels. It further said US forces would be removed from the proximity of Iran within 30 days of a final agreement. But this week the US restored its blockade on Iranian ports, citing Iran's attacks on commercial shipping in the strait. On Thursday, US forces opened fire on a ship they said was trying to break the blockade. On sanctions, the US had undertaken to issue waivers immediately for the export of Iranian crude oil, petroleum products and derivatives, along with related banking, insurance and transport services, until sanctions were terminated. Those waivers were issued, but later revoked after Iran's attacks on shipping. The two sides had committed to negotiating a final deal in a "maximum 60 days extendable with mutual consent" and said talks would begin once initial steps under the MOU were being implemented. However, there has been no public sign of progress. Negotiations were apparently paused during last week's funeral for Iran's Supreme Leader Ayatollah Ali Khamenei, who was killed in the opening US and Israeli strikes. It is unclear whether the talks have restarted or whether any progress has been made. The 60-day timeline points to a mid-August deadline. On the nuclear issue, Iran reaffirmed in the agreement that it would not acquire or develop nuclear weapons, and both sides said they would work out what would happen to Iran's stockpile of enriched material, with the minimum method described as on-site downblending under International Atomic Energy Agency supervision. They also agreed to discuss enrichment and other issues related to Iran's nuclear needs as part of a final accord. But there is no clear sign of movement towards resolving the issue within 60 days. Iran has made no public concessions and has repeated its longstanding claim that its programme is peaceful. It has also refused to allow IAEA inspectors to visit bombed nuclear sites where its highly enriched uranium is believed to have been buried. Other parts of the interim deal also remain uncertain. The agreement referred to a USD 300 billion reconstruction fund for Iran as part of a final settlement, but it is still unclear where that money would come from. The US also pledged to lift all sanctions under a final accord, though American officials have said that would depend on progress on nuclear and other issues. For now, the interim deal has broken down, key commitments on shipping, sanctions and negotiations are stalled, and the wider conflict has flared up again. With PTI Inputs
House Defeats Bid To End Israel Aid While Senate Blocks US-Israel Intel Integration
House Defeats Bid To End Israel Aid While Senate Blocks US-Israel Intel Integration The U.S. House on Wednesday rejected an amendment by Rep. Thomas Massie (R-Ky.) that would have eliminated $3.3 billion in annual U.S. military aid to Israel, voting 314–104 to defeat the proposal. As Tom Gantert reports for The Epoch Times, the vote exposed divisions within the Democratic Party, with 103 Democrats joining Massie in support of the amendment, while 98 Democrats voted against it and 10 voted present. Massie was the only Republican to vote in favor of the amendment. “Though my amendment to strike $3.3 billion in aid to Israel from the State Dept Approps bill did not pass, 104 House Members voted in favor of it,” Massie said on X. “The tide is changing. Americans want their tax dollars to be spent improving things here at home, not waging war and genocide.” The amendment was considered as the House debated the fiscal 2027 State, Foreign Operations and Related Programs appropriations bill. Before the vote, House Minority Leader Hakeem Jeffries (D-N.Y.) urged lawmakers to reject the amendment, calling it “overly broad” because he said it could restrict funding for humanitarian aid, refugee resettlement, peace-building efforts, and U.S. Embassy operations. While criticizing Israeli Prime Minister Benjamin Netanyahu’s government and calling for a “major reset” in U.S. policy toward Israel, Jeffries said the amendment was not the appropriate way to achieve those goals. “In addition, the so-called Massie amendment would restrict our country’s ability to confront Hamas, Hezbollah, and other terrorist organizations in the region who are sworn enemies of both the United States and Israel,” Jeffries’s letter to his colleagues stated. Rep. Randy Fine (R-Fla.) made reference to Massie, who lost his primary election to a President Donald Trump-backed candidate in May. “Very proud of my @HouseGOP colleagues,” Fine posted on X after the vote. “Today we unanimously repudiated our soon-departing Jew-hating colleague, making clear that standing with our greatest ally is core to America’s interests.” Fine continued, “It takes a lot of effort to eradicate the green shoots of Jew Hatred that want to infect our party the way they have Democrats. Folks in Washington are learning I won’t allow it.” Netanyahu said he wants Israel to phase out its reliance on U.S. military aid over the next decade, saying the country has grown strong enough economically and militarily to become more self-sufficient. Israel currently receives about $3.8 billion annually under a 10-year, $38 billion U.S. assistance agreement that expires in 2028. Netanyahu said ending the financial component of military assistance would reflect Israel’s increasing independence while preserving a close strategic partnership with the United States. At the same time, Democrats in the US Senate have blocked debate on an annual defense policy bill, objecting not only to President Trump’s war on Iran but also to provisions that would more closely integrate the United States and Israeli militaries. The motion to proceed failed 50-46, well short of the 60 needed, with votes on strict party lines, and Thune flipping to "no" procedurally to preserve a revote The NDAA process is where the integration fight lives: Massie is fighting the House version's Section 219, which he says would begin "co-mingling our military supply chains and technology with Israel's" Reuters reports that the version of the Bill before the Senate has also triggered backlash over measures that would deepen US military and intelligence ties with Israel. One key provision would require the Pentagon to appoint an official to coordinate between the US and Israel on defence technology. That would include joint weapons research, production and the integration of each country’s technologies into the other’s military systems. The provision also controversially calls for “data fusion”, which Human Rights Watch defined in June as combining feeds from multiple sensors and intelligence sources into a single targeting picture. The group said the arrangement could see the US absorb Israeli intelligence that may have been collected through what it described as problematic mass surveillance programmes. A separate measure in the 2027 Intelligence Authorization Act, which is usually considered alongside the NDAA, would expand intelligence sharing with Israel. Democrats framed the block around the war: Schumer said Republicans want the NDAA passed "as though none of this is happening," and Murphy called it flatly "an authorization for the Iran war, a war that nobody in this country wants." Senate Democrats’ efforts reflect a broader shift within the Democratic Party, where support for Israel has cratered ahead of the November midterm elections. Israel’s favourability rating among Democrats dropped from 59 percent in 2018 to 22 percent in May, according to a June Reuters/Ipsos poll. Tyler Durden Thu, 07/16/2026 - 12:45
What remains of the Iran deal as fighting rages
The conflict between Iran and the United States has intensified in recent days and an interim deal to end the fighting has collapsed less than a month after it was signed. The Memorandum of Understanding was supposed to halt all military operations and reopen the Strait of Hormuz, a crucial waterway for global oil and gas. It also set the stage for further negotiations intended to lead to a permanent peace deal and an agreement on Iran's nuclear program within 60 days. Here's a look at some of the main clauses of the agreement and the situation on the ground. The fighting has resumed THE DEAL: The United States of America and the Islamic Republic of Iran and their allies in the current war by signing this MOU declare the immediate and permanent termination of military operations on all fronts, including in Lebanon, and undertake from now on not to initiate any war or any military operation against each other and to refrain from the threat or use of force against each other and ensuring the territorial integrity and sovereignty of Lebanon. THE CURRENT SITUATION: The U.S. has launched days of airstrikes on Iran in response to its attacks on commercial ships in the Strait of Hormuz. Iran has fired back at Arab countries hosting American troops. A ceasefire between Israel and Lebanon’s Iran-backed Hezbollah reached shortly after the Iran agreement has largely held despite renewed hostilities elsewhere in the region. The Strait of Hormuz is largely closed THE DEAL: Upon the signing of this MOU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days only from the Persian Gulf to the Sea of Oman and vice versa. The traffic of commercial vessels will immediately start and, considering the needs for removing the technical and military obstacles and demining by the Islamic Republic of Iran, will be instated within 30 days. The Islamic Republic of Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz. THE CURRENT SITUATION: This clause seems to have been the undoing of the deal. Iran says it gives it the right to manage traffic through the strait and potentially charge tolls after 60 days. The U.S. and others dispute that, saying the strait should be open to all without fees, as it was before the war. The U.S. has set up an alternative route along Oman's coast and outside of Iran's control. Iran's attacks on ships using that route triggered the renewed hostilities. Traffic through the strait rose after the deal was signed but remained far short of prewar levels and has plummeted in recent days as fighting has escalated. The U.S. has reimposed its blockade THE DEAL: Immediately upon the signing of this MOU, the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran and will fully end the naval blockade within 30 days. During this period, the traffic of vessels will be in proportion to the numbers of prewar traffic being restored by the Islamic Republic of Iran. The United States of America further undertakes to remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final deal. THE CURRENT SITUATION: The U.S. this week restored its blockade on Iranian ports, citing Iran's attacks on commercial ships in the Strait of Hormuz. On Thursday, U.S. forces opened fire on a ship they said was trying to break the blockade. Sanctions on Iranian oil exports have been restored THE DEAL: The United States of America undertakes that immediately upon the signing of this MOU and until the termination of sanctions the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives and all associated services including banking transactions, insurances, transportation, etc. THE CURRENT SITUATION: The U.S. issued the waivers but then revoked them after Iran's attacks on shipping. There's been no public sign of progress toward a final deal THE DEAL: The United States of America and the Islamic Republic of Iran commit to negotiating and achieving the final deal in maximum 60 days extendable with mutual consent … After signing this MOU and subject to the beginning of the implementation of paragraphs 1, 4, 5, 10 and 11 of this MOU, and the continuing implementation of these measures, the United States of America and the Islamic Republic of Iran will start negotiations regarding the final deal exclusively on the other paragraphs. THE CURRENT SITUATION: Negotiations were apparently paused during last week's funeral for Iran's Supreme Leader Ayatollah Ali Khamenei, who was killed in the opening U.S. and Israeli strikes. It's unclear if they have resumed, or if any progress has been made. The 60-day time frame suggests a mid-August deadline. The nuclear dispute still seems as intractable as ever THE DEAL: The Islamic Republic of Iran reaffirms that it shall not procure or develop nuclear weapons. United States of America and the Islamic Republic of Iran have agreed to resolve the disposition of stockpile enriched material pursuant to a mechanism that will be mutually agreed upon in accordance with the schedule mentioned in Paragraph 7 with the minimum methodology to be downblending on site under the supervision of the IAEA. The two parties also agreed to discuss the issue of enrichment and other mutually agreed matters related to the Islamic Republic of Iran’s nuclear needs, based on a satisfactory framework being agreed upon in the final deal. The final deal will confirm the provisions of this paragraph. THE CURRENT SITUATION: It's unclear if any progress has been made toward the highly ambitious goal of resolving the nuclear issue in 60 days. Iran has not publicly made any concessions while reiterating its longstanding position that its program is peaceful. It has refused to allow International Atomic Energy Agency inspectors to visit bombed nuclear sites where its highly enriched uranium is believed to have been buried. Other clauses also appear to be in limbo The interim deal called for a $300 billion reconstruction fund for Iran as part of the final agreement, but it's still unclear where that money would come from. The U.S. pledged to lift all sanctions as part of the final accord, but U.S. officials have always said that is linked to progress on nuclear and other issues.
Oil rises over 1% as Iran threat puts Red Sea route at risk - CNA
Oil rises over 1% as Iran threat puts Red Sea route at risk CNAOil Price Steadies After Gains as Hormuz Ship Attacks Threaten Supply Bloomberg.comOil little changed after U.S. reimposes naval blockade on Iran, launches more airstrikes CNBCOil traders warn market is close to running on empty as Hormuz shuts again Financial TimesOil prices keeps rising after 11% surge in two days as Trump vows more strikes on Iran The Straits Times
Cracking Up And Joining Up
Cracking Up And Joining Up By Michael Every of Rabobank Geopolitics is front and center, even in Argentina–England at the World Cup, where the contested Falklands/Malvinas, which could have oil reserves, saw jingoist 1980’s language. Yet it’s Hormuz, where 1980’s-style tanker wars are underway, that’s the penalty spot. The US is striking Iran again night and day, as Tehran warns of an “existential war”. Reports have Trump leaning towards expanding US military operations; others say what he’s been hitting widen his options for escalation; and Trump has stated Iran “will be defeated soon.” However, the Financial Times today leads with Trump’s ex-defence chief saying the US will not win the war from the air, a sentiment echoed in the Wall Street Journal – and boots on the ground are highly unlikely. Iran is attacking the Hormuz oil lifeline of ship-to-ship shuttle runs, with some vessels now reportedly refusing US-military guided transits. The US just hit a tanker heading for Kharg Island under the renewed Iran blockade, as some wonder again if the US could try to take control of Iran’s southern islands – which would certainly take boots on the ground. The IRGC has threatened all global energy workarounds to Hormuz: that includes the Red Sea, where the Houthis may be preparing to attack; it might also involve Azerbaijan’s oil trade with Israel, meaning either striking Iran’s well-armed northern neighbour or the Eastern Mediterranean route its oil arrives via. Markets would move markedly if these developments were to occur. Israel-Lebanon talks are getting some results, with agreement for Israel to pull back from two pilot zones to allow the Lebanese army to prove it can keep the territory free from Hezbollah – the IDF notably just killed three of the latter, and Trump is still talking about Syria fighting Hezbollah instead. PM Netanyahu will meet Trump in the US on Monday, as many fault lines are seen between the two. However, the flurry of radical domestic legislation the Israeli government just launched ahead of an October 27 election Knesset dissolution may suggest the foreign policy arena is not where they will look to flex for would-be voters. Elsewhere, US General Caine is pleading with defense contractors to build weapons faster, as munitions constraints linger: the US Air Force plans to buy 28,000 low-cost cruise missiles ahead, showing procurement pivots are happening. The Secretary of War is also going to give US troops testosterone shots to make them stronger, as many NATO allies struggle to recruit the soldiers, sailors, and pilots that a military build-up will require; and senior defense officials are pushing for more censorship and are said to be looking at Cuba military options. The EU again failed to strike a new Russia sanctions deal after three days of talks, with Athens reportedly opposing them to shield a Greek shipping company. On the other hand, the EU and Ukraine struck a deal to tap into €10bn of unspent SAFE funds to build drones in Ukraine – with a carve-out to buy some components from China. Ominously, Lithuanian and Latvian leaders also warned that Russia is planning infrastructure attacks on the Baltics or Poland, with other suggestions of potential false flag operations as the trigger for such. Against that backdrop, and what Ukraine is doing to Russian refineries, a benchmark Bloomberg measure of crack spreads now stands above the panic peak of 2022, so while Brent oil is $85 --bang in line with where Joe DeLaura expected it to hover at while ‘Comfortably Bomb’ plays out-- the price of a barrel of diesel is around $147. The EU also just published a report calling China a “key enabler” and a “crucial enabler” of Russia’s war on Ukraine, further noting that: “At the centre of this transformation lies the determination of some powers, Russia and China foremost among them, to establish regional dominance and reshape the global order in line with their interests, fostering a return to a sphere-of-influence logic.” That language echoes European complaints already made about the US, as a Pew survey shows that Xi now beats Trump in terms of popularity. But given nobody gets to vote on that, how much does such soft power matter? In that regard, the X thread from the US Under Secretary of War poopooing the idea of Middle Powers having options other than siding with the US (or China), which we noted yesterday, drew polarised reactions. Those who pushed back strongest came from politics or economics, with a few from the military; by contrast, those who said the blunt (so unhelpful) US argument was true think across those disciplines. As a good example, Velina Tchakarova’s ‘The Middle Power Mirage: Colby, the Sceptics, and the Verdict Nobody Wants’ states: “Here is the strategic reality the convening class prefers to avoid. We are in a new Cold War between two systems, Pax Americana 2.0 and the DragonBear, the structural alignment of Chinese and Russian power across every systemically relevant domain. In that contest, middle powers without sufficient strategic leverage or autonomy will not be neutral conveners. They will be the first victims, hollowed out or cannibalized for the sake of global supremacy, or they will become the battlefield itself. There is no comfortable third space for the underprepared.” She also underlines that preparations can be made for that kind of third space, but they are fiscally, political-economically, and even ‘civilisationally’ uncomfortable. That’s as EU-China trade data this week saw Brussels state that safeguard measures permitting tariffs and quotas against import surges may “become legitimate on a case-by-case basis.”; the UK Treasury suggest alignment of its financial system with the US, not the EU, and a stablecoins framework that opens the door for the USD variant to be used; Bloomberg says ‘Trump's Aides See China Cheating on Trade, But Shun Retaliation’ - there are too many fish to fry in Hormuz, it seems; and India’s PM Modi is pushing to cut import reliance to shield the economy from shocks. Against this backdrop, national elections are now more existential than during the 2000’s policy consensus for ever more globalisation. Today, each vote can push or pull economies towards one of the two global poles of power, tipping the balance between them and/or legacy vs emerging stakeholders within them. In that light, Trump is to give an address today focused on “free and fair elections” rumored to be politically explosive, as Democratic Party Senator Fetterman warns he’ll leave the party if it turns its back on Israel, and Supreme Court justices worried about their safety were told by Congress, “There’s not a money fairy up here.” In the UK, the terror inquiry into the murder of former MP Ann Widdecombe continues, as a man was arrested for threatening to shoot Reform UK leader Nigel Farage, who is involved in a scandal over a cash gift ‘for his security’. The Times of Israel opines that ‘Netanyahu hits new lows in his battle for survival; there will be a great deal of damage for better leaders to undo’; and Ukraine’s President Zelenskyy just ousted his reformist defence minister amid a government reshuffle, which critics have called a serious strategic error. In short, norms are cracking up around us, not just in refined products, but in less ‘refined’ economics and politics. To predict how this plays out one needs to join things up; and that involves looking at who is willing to join up, and where. Tyler Durden Thu, 07/16/2026 - 09:30
Iran turns to Houthis for Red Sea blockade if US hits its power network
Iran turns to Houthis for Red Sea blockade if US hits its power network Iran has asked Yemen's Houthi movement to be ready to shut the Bab el-Mandeb Strait if the US attacks Iranian power infrastructure. The reported plan raises the risk of wider disruption to global energy supplies and Red Sea shipping. The Middle East's energy crisis could soon widen beyond the Strait of Hormuz. Iran has asked Yemen's Houthi movement to be ready to shut down the Bab el-Mandeb Strait if the US attacks Iranian power infrastructure, according to news agency Reuters. The move, if carried out, could deepen the global energy crisis by disrupting another key oil shipping route after Iran's closure of the Strait of Hormuz. According to two senior Iranian officials, Iran's leadership has internally debated the plan and has already informed its Houthi allies to remain prepared for action. It comes as the US and Iran continue to exchange strikes after a fragile peace memorandum unravelled over disputes surrounding the Strait of Hormuz. The conflict has since expanded beyond direct military exchanges, with US stepping up attacks on Iranian military targets and Tehran retaliating through missile and drone strikes while threatening regional shipping routes. HOUTHIS SAID TO HAVE DEPLOYED MISSILES, DRONES A source close to the Houthi movement told Reuters that the group has completed preparations for possible attacks on commercial shipping. Missiles and drones have been positioned near the Bab el-Mandeb Strait, with launch sites located in Yemen's highlands overlooking Hodeidah and the Gulf of Aden. The fighters are now waiting for instructions before launching any operation. Representatives of Iran's Islamic Revolutionary Guard Corps (IRGC), who are already present in Yemen, would decide when to move forward with any attempt to block the strategic waterway, the source added. The Bab el-Mandeb Strait links the Red Sea to the Gulf of Aden and serves as one of the world's busiest shipping lanes. Any disruption there would affect global trade and energy markets. SECOND MAJOR ENERGY ROUTE COULD COME UNDER THREAT With the Strait of Hormuz already closed by Iran, the reported plan threatens to disrupt another critical global shipping route. Before the war, the Strait of Hormuz carried roughly one-fifth of global oil and liquefied natural gas shipments. Since its closure, Gulf producers have redirected a significant portion of their exports through Saudi Arabia's pipeline network to Red Sea ports. The Red Sea route now carries around 7 per cent of global energy supplies. If Houthi forces begin attacking ships or port infrastructure there, both of the Middle East's primary export corridors would face simultaneous disruption. Such a scenario could place fresh pressure on oil prices and further strain global supply chains already affected by the conflict. HOUTHI-SAUDI TENSIONS RISE AGAIN Regional tensions have also increased after the Houthis launched missiles toward Saudi Arabia earlier this week. The group said the attack was retaliation for an alleged Saudi air strike on an airport under Houthi control on Monday. The exchange has effectively broken a four-year truce between Saudi Arabia and the Yemeni movement. In response to the crisis, Saudi Arabia is taking the latest threats from Iran and the Houthis very seriously. According to Reuters, Saudi officials believe the Yemeni group is now coordinating more closely with Tehran over developments in the Red Sea. The conflict between the US and Iran began on February 28, when American and Israeli forces launched strikes against Iranian targets. Tehran responded by closing the Strait of Hormuz, triggering widespread disruption to global energy supplies. Although a temporary truce was reached in June, it quickly collapsed, leading to renewed fighting and increasing uncertainty across the region. RED SEA THREAT COULD DEEPEN ENERGY CRISIS Energy and security experts say any conflict around the Bab el-Mandeb Strait would have consequences far beyond the Middle East. During previous Houthi attacks linked to the Gaza war, many international shipping companies diverted vessels around the southern tip of Africa, significantly increasing costs and delivery times. Saudi Arabia has also shifted nearly 70 per cent of its energy exports to the Red Sea port of Yanbu since the Strait of Hormuz was closed. Any attacks on that route would further tighten oil supplies. One regional source told Reuters Iran's leadership sees pressure on global energy markets as a way to increase the cost of continued US military action. Iran considers the Houthis part of its regional "Axis of Resistance," a network that also includes Lebanon's Hezbollah and Shi'ite armed groups in Iraq. While those groups have already been drawn into the direct confrontation between Tehran and Washington, the Houthis have not formally entered the conflict. The United States has repeatedly accused Iran of backing the Houthis with weapons, money and military training, including support routed through Hezbollah. Iran has denied the claims.
Iran Warns US Of 'Infrastructure For Infrastructure' War, Will Control Hormuz As 'Unbreakable Red Line'
Iran Warns US Of 'Infrastructure For Infrastructure' War, Will Control Hormuz As 'Unbreakable Red Line' Since the prior day's handover of American detainee Dena Karari back to the US, which President Trump said he "appreciated" as a rare "gesture of goodwill" from Iran, Washington's bombs over the Islamic Republic appear to have ceased or slowed, for now at least. But that doesn't mean Iran's retaliatory missiles and drones on America's Gulf allies have halted. On Thursday, Kuwait has announced its air defenses continue to be active, confronting inbound assaults by "hostile drones". Screengrab of IRGC video from Sepah News website on July 14, 2026, showing a missile being launched towards US targets in Bahrain & Kuwait. "The General Staff of the Army notes that any explosion sounds heard are the result of air defense systems intercepting the hostile attacks," the Kuwaiti military said in a statement, blasting "the sinful Iranian aggression." It added: "Everyone is requested to adhere to the security and safety instructions issued by the competent authorities." After five consecutive days of US attack waves, the Iranian military has yet to show signs of backing off its assertions of 'control' over the Strait of Hormuz, and its military has newly warned that the energy transit waterway is an "unbreakable red line" which it will enforce. On Wednesday President Trump warned that if Iran doesn't come back to the negotiating table - while relinquishing control of Hormuz - that by next week strikes will expand to include civic and energy infrastructure, such as bridges. Tehran has in turn counter-threatened to destroy "all infrastructure throughout the region" if Trump acts on this threat to attack Iran's vital infrastructure cites. New: “Infrastructure for Infrastructure” - Iran’s Khatam Al-Anbiya Joint HQ Colonel Ibrahim Zolfaghari: 💢 NEW: “Infrastructure for Infrastructure” Iran’s Khatam Al-Anbiya Joint HQ Colonel Ibrahim Zolfaghari: 🔹”Under no circumstances and in no way will we allow America, as a foreign and extra-regional country, to interfere in the Strait of Hormuz. This is Iran’s unimpeachable… https://t.co/5DscO4bJVh pic.twitter.com/iGQuEOE9nW — Drop Site (@DropSiteNews) July 16, 2026 There are already signs that Iran could be making good on this threat, with Reuters reporting that "Iraq briefly suspended oil loadings on Thursday before resuming them after a drone hit an oil tanker at its Basra terminal, four Iraqi oil and security sources told Reuters." However, no fire or damage resulted from the attack, with sources indicating it wasn't immediately clear who launched it (whether directly from the Iranians, or perhaps from Tehran-aligned Iraqi paramilitaries). Iraqi oil officials have downplayed the incident: "It is not targeting Basra Oil Terminal. Its target is another place. Loading is at normal rates depending on the vessels' availability," Ali Nazar said. An oil ministry spokesperson said loadings were ongoing at Iraq's southern ports and that the ministry is investigating the matter. Iranian officials are meanwhile accusing Washington of more war crimes, specifically of carrying out a "barbaric attack" after a cancer hospital in Iran's southwest was forced to evacuate due to heavy airstrikes on the area. “This barbaric attack – reminiscent of Israel's atrocities against healthcare facilities – caused severe suffering and anxiety upon the hospitalised children,” Foreign Ministry spokesman Esmaeil Baghaei posted on X. He stated there were "211 patients undergoing chemotherapy" which had to be evacuated Wednesday. No response has been immediately forthcoming by the US side. To review of the events of the prior 24 hours: The US military says it launched another wave of strikes on Iran with Iranian media reporting explosions on Qeshm Island, Bandar Abbas and Chabahar. The US military also says it “disabled” an oil tanker attempting to sail towards an Iranian port in the Strait of Hormuz by firing Hellfire missiles. Iran says it carried out retaliatory attacks targeting US assets in Kuwait, Bahrain and Jordan. As for the situation of global shipping through the Strait, Kpler has recorded that merely 13 merchant ships transited the waterway on Wednesday, including eight that departed the Persian Gulf and five having entered. Among those, only one - a bulk carrier entering the Gulf - used the US-approved route for safe passage, which hugs the Omani coast. Iran has been busy boasting that a huge array of companies and countries have sought to negotiate passage with Tehran on its terms of late. This has settled into a waiting game amid dangerous escalatory tit-for-tat strikes, with each seeking to outlast in terms of absorbing pain. COLUMN: Iran will win some short-term battles over the Strait of Hormuz, putting US President Trump over a barrel. But its ability to hold the global economy to ransom will fade as bypass pipelines proliferate. And Iranian officials know it.@Opinion https://t.co/uimMjVJ7bN — Javier Blas (@JavierBlas) July 16, 2026 ...with that in mind, a "final blow"? As for the fact that the US military hit an 'unapproved' oil tanker Wednesday near Iran's main export terminal for the first time since the restart of the blockade on the Islamic Republic’s ports, CIC economists including Anne-Lise Cornen summarized where things stand for the White House in a note to clients... "The challenge for Donald Trump will be to prevent a further rise in inflationary pressures and their detrimental effects on the economy, at a time when the situation was beginning to improve in June," they said. Tyler Durden Thu, 07/16/2026 - 09:15
What explains Europe’s continued role in high-stakes diplomacy
— Sanket Kumar Prajapati As the US-Iran ceasefire appears to have collapsed amid renewed fighting, it remains unclear whether the latest mediation effort by countries, including Pakistan, Qatar and Oman, could help prevent further escalation. The renewed hostilities come despite months of diplomatic engagement. In June, the US and Iran signed a 14-clause Memorandum of Understanding (MoU) to begin 60 days of negotiations for a final deal. While the US President Donald Trump signed the MoU at the Palace of Versailles in France, Geneva earlier hosted the US-Iran negotiations in February this year. The choice of locations underscores Europe’s continued role in high-stakes diplomacy. Geneva, for instance, has served as Europe’s diplomatic centre for over a century. But why has Europe remained a preferred destination for peace talks? How has its role evolved with the changing nature of conflicts, and how is it perceived by both conflicting parties and international mediators? European mediation did not begin as an expression of values. Rather, it was a response to exhaustion. The Napoleonic Wars (1792-1815) had affected the continent for over two decades. By the time European powers gathered at the Congress of Vienna (1814-15), the destabilising consequences of unconstrained great power competition had been recognised. The Congress of Vienna was not simply a peace settlement. It was the first systematic attempt in modern history to institutionalise diplomacy as a mechanism for managing conflict rather than merely concluding it. The Concert of Europe (1815-1914) that emerged from the Congress was, at its core, a balance-of-power architecture, which sought stability through managing rivalries among great powers. The great powers, namely Austria, Prussia, Russia, Britain, and later France, agreed to manage their rivalry collectively. They decided to meet periodically, consult before acting, and treat disputes as problems with negotiated solutions. The underlying logic was not trust but calculation: each power recognised that unilateral pursuit of maximum advantage destabilised a system that ultimately served their long-term interests. In A World Restored (1957), Henry Kissinger argued that Vienna’s real achievement was the construction of a legitimate international order, one in which major powers agreed not on values or political systems but on the rules of engagement. Similarly, in The transformation of European politics, 1763-1848 (1994), Paul W Schroeder describes the system as political equilibrium, sustained not by trust between states but by mutual restraint, where each power accepted costs it would not otherwise have borne in exchange for systemic stability. Crucially, this architecture was value-neutral by design. The Congress of Berlin in 1878 illustrates this. Under the mediation of German Chancellor Otto von Bismarck, the congress gathered great powers to address the crisis in the Balkans and revise Russia’s post-war settlement with the Ottoman Empire. Bismarck was selected as the mediator precisely because Germany had no direct stake in Balkan affairs. Notably, the Concert of Europe offered a table, a diplomatic framework, and the collective authority to enforce settlement. Even the Crimean War, the first major conflict between great powers since Napoleon, was contained and resolved within this framework. The Congress of Paris in 1856 formally brought the Ottoman Empire into the Concert’s architecture. A war between great powers had been localised, negotiated, and closed without systemic collapse. But the concert’s strength was also its limit. It was designed for a specific type of conflict: primarily interstate, fought between recognised sovereign actors with governments capable of negotiating and honouring agreements. It barely offered any framework for managing the conflicts that largely dominated the late nineteenth and early twentieth centuries – nationalist independence movements, colonial contestations, and rebellions within states – that did not fit the model of two governments seeking a negotiated peace. As these conflicts became the dominant form of political violence in the twentieth century, Europe’s original mediation architecture began to reveal its limitations. Alongside the Concert of Europe’s great-power machinery, a quieter, smaller but equally durable mediation tradition was developing. It was built not on the balance of power but on perceived neutrality of mediators. Countries like Switzerland, Norway, Austria, and Finland build their diplomatic identities as trusted third parties. Their effectiveness rested on a key principle: a mediator’s credibility depends significantly on the absence of a strategic self-interest in the dispute it seeks to resolve. Switzerland’s case is the most historically sustained. Its neutrality, recognised by the great powers at Vienna in 1815, was not a passive status but an active diplomatic instrument. As a neutral country, Switzerland offered its services – “good offices” – to nations in conflict during WWI and WWII. Its good offices included carrying out 36 protecting power mandates during WWI. Protecting power mandates involve managing communication channels between or among opposing sides. As legal scholar Dietrich Schindler documented in a journal article, Neutrality and Morality: Developments in Switzerland and in the International Community (1998), Switzerland’s neutrality lent credibility to its good offices precisely because it carried no explicit strategic agenda of its own. Geneva became the world’s diplomatic address not because Switzerland was powerful but because it was reliably uncommitted, offering a process without prescription it offered a space where adversaries could talk without conceding anything beyond their willingness to sit at the same table. Norway institutionalised a version of this model in the late twentieth century, and the Oslo Accords of 1993 remain its clearest illustration. By the early 1990s, US-led negotiations between Israel and the Palestine Liberation Organisation (PLO) had reached a structural deadlock. Norway succeeded where the US could not, and the reason was structural rather than diplomatic. As Jan Egeland, Norway’s State Secretary during the negotiations, later explained, Norway’s effectiveness came from three things: 1. A smaller bureaucratic machine that could move quickly and discreetly. 2. A foreign policy free from great power obligations. 3. No economic or political stake in the outcome. The first secret meeting between Israeli academics and PLO officials took place in January 1993 at a rural manor outside Oslo. By September, a Declaration of Principles on Interim Self-Government Arrangements, commonly referred to as the “Oslo Accord”, had been signed on the White House lawn. Although Oslo represented a breakthrough, Norwegian scholar Hilde Henriksen Waage identifies a tension that would prove consequential: Norway’s lack of leverage, the very quality that enabled the initial breakthrough, also meant it had no capacity to enforce the agreement once it was signed. The parties returned to the US for implementation, and Washington’s strategic priorities gradually reshaped what Oslo had produced. The lesson is one that European mediation would encounter repeatedly: procedural neutrality enables agreement, but cannot always guarantee its durability. At some point, a mediator needs leverage vis-à-vis normative authority to hold an agreement in place. The small states offered leverage to a limited extent but rarely offered the normative authority needed to enforce the agreements. In addition, the conflicts these mediators were navigating were also changing. By the mid-twentieth century, domestic and ideological conflicts involving non-state actors were displacing the largely symmetric interstate wars the Concert of Europe had been designed to manage. Mediating between parties who did not recognise each other’s legitimacy required more than a neutral table. It required actors who could shape the normative terms of the negotiation itself. Europe was about to discover that it could play that role, and that doing so would carry costs it had not anticipated. Post read questions 1. Why is the Congress of Vienna regarded as the foundation of modern European diplomacy? Explain the principle of balance of power as practised under the Concert of Europe. 2. The Concert of Europe institutionalised diplomacy as an instrument of conflict management. Discuss its achievements and limitations. 3. Neutrality can facilitate negotiations but cannot guarantee durable peace. Examine with reference to Norway’s mediation in the Oslo Accords. 4. The effectiveness of a mediator depends not only on impartiality but also on leverage. Critically examine in the context of international conflict resolution. 5. Distinguish between balance-of-power diplomacy and neutral third-party mediation. Which model is better suited to contemporary conflicts? (Sanket Kumar Prajapati is a Doctoral candidate at the Centre for European Studies, Jawaharlal Nehru University, New Delhi. The second part of the article will examine Europe’s evolving mediation role during and after the Cold War.) Share your thoughts and ideas on UPSC Special articles with [email protected]. Click Here to read the UPSC Essentials magazine for June 2026. 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Trump insists 'Iran is unhappy right now' while venting about 'electric catapults that don't work' at defense tech summit | Fortune
President Donald Trump addressed a defense summit at the U.S. Army War College on Wednesday but spent little time talking about battlefield issues — even as the war in Iran has reduced the U.S. supply of critical missile and interceptor systems. Seated at a roundtable with Defense Secretary Pete Hegseth and Republican Pennsylvania Sen. David McCormick, Trump said the gathering would generate around $10 billion in pledged investments from domestic defense and technology companies, without providing details. “The talent and innovation in this room will keep America safe for many years to come,” Trump said. He spoke shortly after the U.S. military launched another round of missile strikes that Trump had previously promised against Iran as a ceasefire to end that war remains in tatters. Trump made brief references to the war and a January military operation to oust Venezuelan President Nicolás Maduro, saying, “We’re really doing well with Iran.” “Iran is unhappy right now,” he said. But his lengthy speech spent more time drifting into themes Trump repeats during his political rallies, boasting about — and sometimes exaggerating — his administration’s accomplishments. Trump also diverted into a broadside against the use of windmills in Britain, questioned having steam catapults on U.S. ships and pondered the Battle of Gettysburg. “What a war that was, when you read about it,” the president said of the Civil War. Trump suggests he had stored up frustrations over catapults Trump suggested that oil from Venezuela would eventually pay for what the U.S. spent toppling Maduro some 50 times over — though he also said private oil companies would profit more than the country. After a long aside about the use of magnets to improve catapults on vessels, Trump finally offered, “I hope I’m not boring anybody.” “I’m getting it all out now,” he added. “All the anger I have when I hear about electric catapults that don’t work.” Later, Trump advised, “I’ll tell you how to make money: Do magnets.” At another point Trump declared, “I watch more tractors than any human being on earth.” The gathering in Carlisle, Pennsylvania, was organized by McCormick and also featured Gen. Dan Caine, chairman of the Joint Chiefs of Staff; Army Secretary Dan Driscoll; CIA Director John Ratcliffe; and Mike Waltz, U.S. ambassador to the United Nations. Summit attendees included JPMorgan CEO Jamie Dimon, Blackstone President Jon Gray, Lockheed Martin CEO Jim Taiclet, General Dynamics CEO Phebe Novakovic, Boeing CEO Kelly Ortberg, SpaceX director Antonio Gracias and artificial intelligence firm Palantir chief technology officer of analytics Shyam Sankar. “I’m in a world where I’m shaking hands with celebrity business people, mostly,” Trump said. Another presidential stop in Pennsylvania Trump has come to the critical swing state seven times during his second term, including last month, when he went to a Mack Trucks facility in Macungie. Trump carried Pennsylvania in 2016 and 2024, and McCormick is not up for reelection this cycle, but Republicans are increasingly concerned about the war and the persistently high cost of living as well as the president’s low approval ratings as they look to maintain control of Congress during November’s midterm elections. As he frequently does, however, Trump complained Wednesday that affordability and the rising cost of living that have increasingly worried voters were issues the Democrats have fomented for political purposes. “That’s a fake word that they use, they caused the affordability problem,” he said, before referencing one of his friends, whom he didn’t name, having bought a private plane just for the tax benefits. Trump spoke at a similar gathering organized by McCormick last year in Pittsburgh that sought to make the city a hot spot for advancement in energy technology and robotics. Then, the senator announced $90 billion in pledged investments in those sectors across Pennsylvania. Before Trump’s arrival, multi-analytics threat detection leader ZeroEyes, which is based in Conshohocken, outside Philadelphia, announced a planned $10 million investment in artificial intelligence and machine learning research and development. Pittsburgh-based Gecko Robotics says it plans to open a new 10,000-square-foot (930-square-meter) manufacturing facility designed to boost integration of robotics into defense manufacturing processes and better expand the nation’s defense industrial base. Shortage of Tomahawks and Patriots may take years to make up Unmentioned during Trump’s appearance was an analysis released in May that found that U.S. military contractors will need at least three years to replenish stockpiles of Tomahawks, which are used to strike targets deep inside enemy territory, as well as Patriot and THAAD interceptors, which defend against incoming missiles and drones. Stocks have dwindled as the U.S. has repeatedly fired strikes on Iran, adding to concerns that American forces would have limited firepower in any potential future conflict with China. Trump also recently pledged to give Ukraine a license to produce Patriot air-defense systems, which could be a major development in its war with Russia, though turning the idea into real weapons is also likely to take years. Trump has sought to correct the shortfall by seeking a historic $1.5 trillion defense budget proposal for 2027. But a package authorizing such spending levels is stalled in Congress, and, even if it eventually moves forward, loads of additional time will still be required to expand production capabilities to accommodate such weapons systems. Jake Loosararian, co-founder and CEO of Gecko Robotics, said U.S. defense companies have “got to supercharge supply chains” to reduce how long it takes for new technology to be ready for widespread production. “President Trump uniquely understands the importance of pragmatic impact today,” Loosararian said. “He also understands big, beautiful things for tomorrow.”
3 islands help control access to the Strait of Hormuz. They're in the crosshairs of the Iran war
DUBAI, United Arab Emirates (AP) — The expanding U.S. military campaign against Iran has put three small islands that sit at the confluence of the Persian Gulf and the Strait of Hormuz in the crosshairs once again. The islands of Abu Musa and Greater and Lesser Tunb — which were seized in 1971 by Iran from what would become the United Arab Emirates — have become a garrison for Iran, helping it exert significant control over the strait, through which a fifth of all oil and natural gas passes in peacetime. U.S. strikes on two of the islands in recent days have renewed speculation about the fate of these small, rocky isles, whose ownership remains disputed. Three islands sit along the route to the Strait of Hormuz The land mass of all three islands totals just about 10 square miles (25 square kilometers). But they carry oversized strategic importance given they sit along the deep-water route taken by ships passing between the strait and the Gulf. The largest, Abu Musa, has a village on it but primarily serves as a base for Iran's paramilitary Revolutionary Guard, which has stationed fast boats and missiles — both of which have been used to harass ships in the strait — on the island. It also hosts air defense systems. The same goes for Greater Tunb Island, while the much-smaller Lesser Tunb only has a military presence. Because of their strategic importance, regional powers have long fought for control of the islands. Iran, then under Shah Mohammad Reza Pahlavi, took the islands by force on Nov. 30, 1971, two days before the formation of the United Arab Emirates. The shah, as America's top security ally in the region, received little pushback at the time. After the 1979 Islamic Revolution, Iran used the islands as a base to target shipping during the “Tanker war” of the 1980s, when the U.S. Navy escorted oil tankers through the region under Iranian fire. Iran used the islands to both monitor the strait and launch vessels to lay mines or openly attack vessels in that conflict. U.S. estimates suggest Iran attacked over 160 ships in that confrontation. So far in the current war, there have been over 50 attacks targeting vessels and oil rigs, according to the Joint Maritime Information Center, a coalition overseen by the U.S. Navy. That includes some incidents of the U.S. firing on ships it accuses of trying to break its blockade on Iran. The islands have become US military targets In recent days as part of the escalation in fighting, the U.S. military launched strikes on both Abu Musa and Greater Tunb islands. Some analysts have speculated that American forces might invade. “Together they act as a layered denial system to the most critical energy chokepoint in the world,” Isabel Oakeshott, a columnist for The Telegraph who now lives in Dubai, United Arab Emirates, wrote in the newspaper. She equated Abu Musa to “a fixed aircraft carrier” for Iran. Taking the islands likely would be possible for the U.S., which has both paratroopers and Marines in the region. However, they likely would be exposed to Iranian attack while there. “Without prepared, hardened fortifications to provide cover — even with air support from nearby naval assets — force protection would be an enormous challenge,” warned Brandon Carr, an analyst with the Washington-based Quincy Institute for Responsible Statecraft, which calls for restraint in American military operations abroad. “The Marines would come under fire from Iranian ballistic missiles and drones, severely limiting their ability to project power into the strait.” The dispute over the islands hangs over the conflict In recent years, the United Arab Emirates successfully lobbied both China and Russia to include language in joint statements about resolving the ownership of the islands through either negotiations or an international court decision. That infuriated Tehran — but the world largely ignored the dispute. “What the world called a bilateral territorial dispute was, from the beginning, a strategic claim on a global chokepoint,” wrote Noora Mohamed Al Murry, an Emirati legal scholar, in April. “Managed ambiguity, in a waterway this consequential, is not a neutral position. It is a choice with a price, and the world is now holding the invoice.” Oakeshott, the columnist, predicted that the UAE, which hosts U.S. forces and has repeatedly come under Iranian fire in the war, would likely push to get the islands once the conflict ends. The U.S. campaign may force the issue to a head, some 55 years after the late shah warned the strait could become a “nuisance” for the world. “It does not take a big boat to carry a bazooka and a few shells," the shah told The Guardian newspaper in 1971. "But the trouble that it could cause is tremendous.”
Strait of Hormuz Tanker Traffic Erodes Further as Oil Prices Rise
Very few ships passed through the waterway on the first full day of the U.S. naval blockade of Iran.
A global grain crisis: why the Sea of Azov has become for wheat what the Strait of Hormuz is for oil
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice. The situation in the Sea of Azov is rapidly escalating from a regional military escalation into a global threat to global food security. CNN is sounding the alarm, comparing Ukrainian drone attacks on Russian civilian vessels to a hypothetical blockade of the Strait of Hormuz, which could instantly paralyze the oil market. Grain market experts emphasize that approximately a quarter of all Russian wheat exports pass through the Sea of Azov, making this waterway a key artery for food supplies to dozens of countries. The first economic consequences are already evident: amid news of the strikes, global wheat futures prices rose sharply, reacting to the risk of shortages. Satellite images and data from ship tracking services confirm traders’ worst fears: Russia has been forced to effectively halt navigation. Satellite footage clearly shows massive traffic jams of bulk carriers stranded on both sides of the blockaded region — both at the Kerch Strait in the south and at the entrance to the Azov-Don Canal in the north. The transport artery linking Russia’s inland waterways with the Black Sea has been completely blocked due to the threat of further drone strikes. It is necessary to add that the consequences of this “grain jam”could be far more long-term than initially apparent. The Azov blockade is not just a few delays, but a colossal blow to logistics.The ports of Rostov, Azov, and Taganrog are shallow and designed for river-sea vessels, which ensure fast and flexible delivery. Rapidly rerouting millions of tons of grain overland to deep-water Novorossiysk is technically impossible due to limited rail capacity. If the Sea of Azov remains closed for even a few weeks, the global market will face not just a price hike, but a real food crisis in countries in the Middle East and Africa that are critically dependent on Russian supplies. Meanwhile, insurance companies have already begun reviewing the risks for vessels in the Black Sea region, making any alternative freight option a boon for suppliers. The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.