After 10-Day Lull, U.S. Launches Fresh Strikes on Iran | Middle East Tensions Push Oil Prices Higher

Overview of New U.S. Military Operations Against Iran

On July 7, the U.S. launched fresh military strikes against Iran in response to attacks on commercial vessels in the Strait of Hormuz, triggering explosions in southern Iran. The U.S. also revoked a license permitting Iranian oil sales, a move Tehran condemned as a violation of a bilateral memorandum of understanding. Separately, the UK reported three ship attacks in the strait within 24 hours. Amid the escalating tensions, international oil prices surged over 6%.

U.S. Strikes Iran Again; Tehran Condemns Sanctions Move as Tensions Escalate in Strait of Hormuz

On July 7 local time, the U.S. Central Command announced that U.S. forces had carried out a new series of powerful strikes against Iran, in response to Iran's attacks on three commercial ships in the Strait of Hormuz. The U.S. military stated that Iran's actions constituted a "clear violation of the ceasefire agreement." This marks the second round of U.S. strikes against Iran under the pretext of "commercial ship attacks" within ten days, following similar actions on June 27 and 28.

On-Site Blast Conditions in Southern Iran

According to Iran's state television early on July 8 local time, six explosions were heard near a village on Qeshm Island in southern Iran, and seven explosions were reported in a village in the Sirik district along the coast of the Strait of Hormuz, resulting in several injuries. Separately, the Islamic Republic News Agency (IRNA) reported on the same day that multiple explosions had been heard in succession in the port city of Bandar Abbas in southern Iran.

On July 8, Iranian media released footage showing the aftermath of an attack on the fishing port in Bandar Abbas. According to IRNA, Iranian President Masoud Pezeshkian had departed from Najaf, Iraq, early that morning to return to the Iranian capital, Tehran, concluding his visit to Iraq. Pezeshkian's trip was primarily to attend the funeral ceremony in Iraq for Iran's late Supreme Leader Ayatollah Ali Khamenei. During the visit, he also met with Iraqi Prime Minister Mohammed Shia' Al-Sudani.

UK Maritime Agency Reports Three Ships Attacked in Strait of Hormuz Within 24 Hours

The United Kingdom Maritime Trade Operations (UKMTO) reported on July 7 that a tanker was hit by a drone while transiting the Strait of Hormuz that day. This was the third incident of a vessel being attacked in the strait reported by the agency within 24 hours. The report indicated that the latest tanker was struck by an unidentified drone, causing minor structural damage. No casualties or environmental pollution have been reported. The vessel remains seaworthy and is continuing towards its next port of call. Earlier on July 7, UKMTO had reported two other attacks on vessels. According to sources, one was a large liquefied natural gas carrier and the other was a tanker; both were using shipping lanes closer to the Omani side when they were attacked.

Iran’s Official Response to Shipping Safety Incidents

Iranian Foreign Ministry spokesperson Esmaeil Baghaei stated on July 7 that some commercial ships, navigating routes not coordinated with Iran, have been turning off or tampering with their positioning systems or Automatic Identification Systems (AIS) in an attempt to evade monitoring. He warned that this creates collision risks and disrupts Iran's efforts to facilitate safe passage through the Strait of Hormuz.

U.S. Ends Oil Sanctions Waiver for Iran; Tehran Condemns Move as Violation of MOU

According to information released on July 7 by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), the United States has revoked a general license that permitted Iranian oil sales. Wind-down transactions will be allowed until 12:00 AM Eastern Time on July 17.

Early on July 8 local time, the Iranian Foreign Ministry issued a statement strongly condemning the U.S. decision to cancel the sanctions waivers for Iranian oil sales, calling it a flagrant violation of the Iran-U.S. memorandum of understanding signed in Islamabad. The ministry described the move as further proof of the U.S. government's malice, fickleness, and unreliability. While warning of the consequences of the U.S. breach, the Iranian Foreign Ministry stated it would take all necessary measures deemed appropriate to safeguard national interests and security.

Strait of Hormuz Tensions Drive Significant Surge in International Oil Prices

Renewed tensions in the Strait of Hormuz, raising investor concerns, led to a sharp increase in international oil prices on July 7, with gains exceeding 6%. At the market close, light crude oil futures for August delivery on the New York Mercantile Exchange rose by $$1.89 to settle at$$70.44 per barrel, a gain of 2.76%. London Brent crude futures for September delivery increased by $$2.17 to settle at$$74.16 per barrel, a gain of 3.01%. Following the market close, prices surged an additional 3% after news broke of the renewed U.S. strikes on Iran and the U.S. decision to cancel the oil sanctions waivers.