Background
The crisis now unfolding in the Strait of Hormuz traces back to February 28, 2026, when the United States and Israel launched a joint air campaign against Iran codenamed Operation Epic Fury. The war's opening strikes killed Iran's longtime Supreme Leader Ali Khamenei, triggering a ferocious Iranian response of hundreds of missiles and thousands of drones aimed at Israeli and American assets across the region. Iran, in turn, moved to choke off the Strait of Hormuz, the narrow waterway through which roughly a quarter of the world's seaborne oil and a fifth of its liquefied natural gas normally passes. Islamic Revolutionary Guard Corps (IRGC) vessels boarded merchant ships, laid sea mines, and warned foreign carriers away from the strait, causing tanker traffic to collapse to a trickle.
After more than five weeks of fighting, Washington, Tehran and Israel agreed to a ceasefire on April 7-8. That truce held long enough for negotiators to hammer out a more formal memorandum of understanding, which President Trump and Iranian President Masoud Pezeshkian signed on June 17, with a sixty-day clock intended to bring the conflict to a durable close. Iran's clerical establishment, meanwhile, has been consumed by a succession crisis: Khamenei's son, Mojtaba Khamenei, was named the new Supreme Leader after his father's killing but has still not appeared in public, reportedly owing to injuries sustained in the February strikes. His father's funeral, held in Tehran in early July and attended by huge anti-American crowds, provided a brief diplomatic pause in the shadow-conflict over the strait, but that pause did not last.
Key Developments
Iran attacked three commercial vessels in the Strait of Hormuz on July 5-6, during the very funeral period Trump had designated as a diplomatic truce. U.S. Central Command answered with more than 80 retaliatory strikes on Iranian military targets, hitting Kharg Island — Iran's primary oil export hub — as well as Bandar Abbas, Sirik and Qeshm Island. On July 7, as strikes intensified, Trump said he considered the truce “over,” though he softened that stance a day later, saying the exchange of fire would not necessarily lead to sustained military action.
The lull proved brief. The U.S. launched a second round of airstrikes on July 9, and Iran responded by targeting Bahrain, Kuwait and Qatar with missiles and drones — the first Iranian strike on Qatari territory since the crisis began. Over the following weekend, U.S. forces hit roughly 140 Iranian military targets in a third round of strikes after another attack on a ship transiting the strait. The IRGC said it had struck two oil supertankers, the al-Bahiya and the Mombasa, while they were passing through Omani territorial waters; an Indian crew member aboard the Mombasa was killed. Tehran also warned that its tentative agreement with Washington had entered a “crisis stage.”
On Monday, July 13, Trump escalated dramatically on two fronts. First, he announced that the United States would resume its blockade of Iranian ports near the strait, effective 4 p.m. ET on Tuesday, July 14 — reviving a blockade that had run from April 13 to June 18 before the MOU was signed. Second, he declared that the U.S. would act as “guardian of the Hormuz Strait,” telling reporters Washington would be “reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security” in the waterway. Oil markets reacted immediately: Brent crude jumped 9.59% to settle at $83.30 a barrel on the news.
The blockade formally resumed Tuesday afternoon as promised. Overnight, CENTCOM carried out roughly five hours of strikes across Iran, hitting the port city of Bushehr — home to Iran's only operating nuclear power plant — along with Chabahar, Jask, Konarak, Abu Musa and Bandar Abbas, targets CENTCOM said were meant to “further degrade Iran's ability to attack commercial shipping.” Iran's newly created Persian Gulf Strait Authority, a body it set up during the earlier ceasefire to manage transit through Hormuz, said passage through the strait was now “unfeasible” given what it called hostile U.S. actions. A tanker was reported hit by a missile while transiting the strait's southern route hugging Oman's coast. Iran fired waves of missiles and drones toward Bahrain, and Jordan's state news agency, Petra, said its air defenses intercepted four missiles fired from Iranian territory early Tuesday — marking the first time Jordan has been directly targeted in this phase of the conflict.
Reactions
The response from the shipping and legal world has been pointed. The Strait of Hormuz is internationally recognized as a waterway where vessels have a right of free passage under international law, and legal experts have noted that a mandatory toll of the kind Trump described would likely violate that principle; some suggested the plan could only pass legal muster if reframed as a voluntary protection service that shippers could opt into rather than a compulsory fee. The International Maritime Organization, the U.N. body that regulates global shipping, publicly opposed the proposed transit fees, underscoring the unusual position the U.S. now occupies as both a combatant in the region and a self-appointed toll collector on one of the world's most important trade arteries.
Gulf states have found themselves repeatedly caught in the crossfire. Bahrain, Kuwait, Qatar and now Jordan have all been targeted by Iranian missiles or drones in recent days despite having no direct role in the U.S.-Iran conflict, prompting concern among regional governments that they are being used as leverage against Washington. Oil markets, for their part, have moved from wary patience to open alarm: crude prices hit a one-month high on Tuesday, with U.S. West Texas Intermediate futures climbing roughly 2.8% to $80.35 a barrel and Brent crude up almost 4% to $86.54, as traders concluded that the supply cushion that had blunted earlier shocks in March and April has now been substantially drawn down.
The strain is also showing up in the insurance market that underwrites nearly all commercial shipping through the strait. Hull war-risk premiums, which sat at a fraction of a percent of a vessel's value before the war began, have climbed to somewhere between 2% and 6% of a ship's value per voyage, with roughly 5% emerging as a new market norm — a many-thousand-fold increase from the roughly 0.001% shipowners paid in peacetime. Those costs cascade directly into the price of delivered crude, and they fall hardest on Asian buyers: the strait carries about 20% of the world's oil supply, including more than 40% of the crude China imports. By Tuesday, visible shipping traffic through Hormuz had slowed to a near-standstill, with tracking services showing only a handful of vessels willing to attempt the crossing.
What's Next
Diplomats from Qatar, Oman and Pakistan, who helped broker the original ceasefire and the June memorandum of understanding, are continuing to push both sides back toward talks, but Tehran's description of the deal as being in a “crisis stage” suggests the diplomatic track is under severe strain. Much now hinges on whether Iran's still-unseen new Supreme Leader, Mojtaba Khamenei, asserts public control over the country's response, and on whether Trump's blockade-and-toll strategy holds or triggers a broader supply shock that neither side can easily walk back. Shipping companies face an immediate practical dilemma: pay into a legally contested American “protection” scheme, reroute around the Cape of Good Hope at enormous cost and delay, or risk transiting a strait that both the U.S. Navy and Iran's IRGC are now actively contesting. With oil prices climbing and strikes hitting increasingly sensitive targets like the nuclear-adjacent city of Bushehr, the coming days are likely to determine whether the June ceasefire can be salvaged or whether the region is sliding back into full-scale war.
