Strait

The European Commission on Thursday cut its 2026 growth forecast for the European economy, as the ongoing conflict in the Middle East drives energy prices sharply higher.

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The EU economy is now expected to grow by just 1.1% in 2026, down from the 1.4% projected in the Commission’s autumn forecast. The eurozone outlook was revised down further to 0.9%.

In its report, the Commission warned that disruption to global energy markets — caused by escalating tensions around the Strait of Hormuz, one of the world’s key oil and gas shipping routes — has significantly worsened Europe’s economic outlook.

“Before the end of February 2026, the EU economy was expected to continue expanding at a moderate pace, alongside a further decline in inflation,” the report said. “However, the outlook has changed substantially since the outbreak of the conflict.”

Inflation is also expected to rise sharply due to the disruption around Hormuz.

EU inflation is forecast to reach 3.1% this year — a full percentage point higher than previously expected — driven mainly by soaring energy costs after oil and gas prices surged amid fears of supply disruptions in the Gulf.

For EU officials, the shock recalls 2022, when Russia’s invasion of Ukraine triggered Europe’s worst energy crisis in decades.

The Commission described the latest turmoil as “the second such shock in less than five years”, warning that Europe’s dependence on imported fossil fuels leaves it highly vulnerable whenever geopolitical tensions threaten global energy supplies.

Consumer confidence has already fallen to a 40-month low, according to the forecast, as households prepare for higher heating and fuel bills while businesses face rising operating costs and weaker demand.

Investment is also expected to slow as companies confront tighter financing conditions and growing uncertainty. Export growth is weakening as global demand softens.

Despite the deteriorating outlook, Brussels said the bloc is better prepared than during the Ukraine-related energy crisis, thanks to years of investment in renewable energy, lower gas consumption and efforts to diversify away from Russian supplies.

“The push towards supply diversification, decarbonisation and lower energy consumption has left the EU economy better placed to absorb today’s shock,” the Commission said.

However, EU officials acknowledged that risks remain heavily skewed to the downside.

The report warned that prolonged disruption in the Strait of Hormuz or across wider Middle Eastern supply chains could drive energy prices even higher, derail the expected easing of inflation in 2027 and potentially stall Europe’s recovery altogether.

The Commission also cautioned that shortages of refined oil products, fertilisers and other industrial inputs could spread through global supply chains, increasing food and manufacturing costs across Europe.

Meanwhile, European governments are preparing for growing fiscal pressure. Public deficits across the EU are expected to widen as governments increase spending to protect households from rising energy bills while also boosting defence expenditure amid mounting geopolitical instability.

Italian Prime Minister Giorgia Meloni has recently urged the European Commission to relax fiscal rules for households and industries struggling with soaring energy costs, arguing that energy security should be treated with the same urgency as defence spending.

At the centre of Rome’s request is the EU’s national escape clause, adopted on 8 July, which allows member states temporary fiscal flexibility to increase defence spending under exceptional circumstances.

Meloni said Brussels had already shown a willingness to loosen budget rules in response to Russia’s war in Ukraine and growing concerns about Europe’s military preparedness. Italy is now seeking similar flexibility for emergency energy measures.

Nearly three months after the United States and Israel launched their large-scale bombing campaign against Iran and about six weeks since the April 8 ceasefire took effect, President Trump faces an inflection point. Does he return to war? Maintain the ceasefire and U.S. blockade on Iranian ports in the hope of cutting a deal on American terms? Or drop his maximalist negotiating stance?

Sen. Lindsey Graham (R-S.C.), an informal foreign policy advisor for the White House, continues to press for more aggressive U.S. military action. Trump’s political advisors would prefer that the war end as soon as possible to minimize political repercussions against the Republican Party in a midterm election year.

Trump seems conflicted. Despite weeks of U.S. bombardment and an ongoing naval blockade, Tehran is as protective of its nuclear program today as it was before the war began. “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them,” Trump wrote on Truth Social over the weekend. A day later, Trump took to the social media platform again to announce he suspended planned U.S. attacks on Iran to give talks more time.

Unfortunately for Trump, he’s proved to be his own worst enemy on this subject. Iran’s stockpile of highly enriched uranium and Tehran’s effective control of the Strait of Hormuz, the regime’s two biggest cards, are a byproduct of Trump’s own policy decisions.

The first is a clear indictment of Trump’s first-term order to withdraw the United States from the Obama-era Joint Comprehensive Plan of Action, a highly technical accord that put Iran’s nuclear work in a box by restricting the number and quality of centrifuges it could use, capped the amount of enriched uranium it could produce and compelled Tehran to ship 97% of its stockpile out of the country. When the Trump administration scrapped that hard-won deal, Iran responded by enriching more nuclear material at a faster pace and accumulating the very stockpile the Trump administration is now seeking to neutralize.

The Strait of Hormuz, Iran’s second card, would not even be an issue today if the Trump administration had refrained from going to war in the first place. On Feb. 27, the day before the conflict began, more than 150 tankers and vessels traveled through the strait. The international waterway was open for business.

Not so today. On Thursday, a grand total of three crossings were registered in the waterway. This collapse of commerce is a consequence of Iran’s ability to harass civilian tankers so much that shipping companies no longer view the journey as worth the cost. As Adm. Brad Cooper, the top U.S. commander in the Middle East, testified to the Senate Armed Services Committee on Thursday: “The Iranian capability to stop commerce has been dramatically depleted through the strait, but their voice is very loud. And those threats are clearly heard by the merchant industry and insurance industry.”

By virtue of his own actions, Trump is now left with a series of policy options that range from least bad to terrible. None of them are ideal, and all of them carry some risk.

For starters, Trump could resume the war. Any renewed U.S. bombing campaign would probably expand the U.S. military’s original set of targets to include a portion of Iran’s energy infrastructure, which Trump has threatened repeatedly to hit. A U.S. invasion of Kharg Island, where 90% of Iran’s oil processing takes place, might also be up for discussion. The aim would be to destroy Iran’s remaining military capabilities and further squeeze its oil revenue until Tehran’s strategic calculus on the war shifts to Washington’s liking.

Yet there are no guarantees that doubling down on military force will work. Trump’s entire strategy has relied on a baseline assumption: The more punitive the United States is, the more likely Tehran will be to cave. Yet that simply hasn’t occurred. If anything, Iran is more dug in now than it was in the opening days of the conflict. For the regime, capitulating to Trump is as dangerous as losing the war. Why would more bombing succeed where previous bombing failed?

The risks of additional U.S. military action are considerable as well. Before the ceasefire, Iran was launching ballistic missiles and attack drones across multiple gulf Arab states, hitting Qatar’s largest natural gas processing facility, Saudi Arabia’s east-west oil pipeline and Dubai’s luxurious high-rises. As the Iranians have stated, such attacks will not only resume if Trump orders a resumption of the war but will expand to new targets, including desalination facilities and nuclear power plants. Such strikes would raise global oil and gas prices to even more absurd levels, adding to the extra $40 billion the American people are already paying for fuel since the war began.

What about continuing the status quo? While this contingency would be less costly than another round of bombing or a U.S. ground invasion, it’s unclear whether it would help or hurt negotiations toward a settlement. There’s a possibility that extending the U.S. blockade of Iranian ports could merely reaffirm the regime’s earlier decision to preserve its own shutdown of the strait. Iran is now urging Washington to end its blockade before talks on the nuclear file can be held. And it’s a mystery whether Trump’s blockade is working anyway; the U.S. intelligence community assesses that Iran could withstand this pressure point for three to four more months, which may be too long for Trump to sustain given the oil disruptions that are bound to get worse.

Striking an agreement to end the war, return the strait to open traffic and restrict Iran’s nuclear program would be the most beneficial policy for the United States with the least amount of cost attached — not quite undoing the harm from Trump’s first-term decision to scrap the nuclear deal and his second-term decision to start a war. U.S. and Iranian negotiators are passing proposals back and forth as we speak. But as of now, Trump can’t stomach agreeing to a deal that covers some of Iran’s terms, including but not limited to a shorter suspension of enriched uranium and some kind of Iranian role in the management of the strait. Even if Trump did reassess his position, he would be forced to confront the hawks in his political coalition who would consider anything short of Iran’s total surrender a failure.

In short, Trump is in an unenviable position. He’s got nobody to blame but himself.

Daniel R. DePetris is a fellow at Defense Priorities and a syndicated foreign affairs columnist.

The Islamic Revolutionary Guard Corps (IRGC) Navy claims it has greatly expanded how it defines the Strait of Hormuz, which it has closed to most shipping since the start of the now-paused war. The move comes as that closure has wide-ranging impacts on the global economy and with U.S. President Donald Trump mulling new military actions against Tehran amid deadlocked peace negotiations and a tenuous ceasefire barely holding.

Under its new definition, the IRGC claimed a tenfold expansion “forming a complete crescent” of “about 20 to 30 miles to one now over 200 to 300 miles,” Political Deputy of IRGC Navy Mohammad Akbarzadeh said in a TV interview, according to the official Iranian FARS news agency.

“The Strait is no longer viewed as a narrow stretch around a handful of islands but instead has been greatly ​enlarged in scope and military significance,” Akbarzadeh noted. “In the past, the Strait of Hormuz was defined as a limited area ​around islands such as Hormuz and Hengam, but today this view has changed. The Strait is now defined as a strategic zone stretching from ‌the ⁠city of Jask in the east to Siri Island in the west.”

We asked the White House and CENTCOM for reactions to the IRGC Navy announcement. The White House dismissed it.

“During Operation Epic Fury, Iran was crushed militarily – their ballistic missiles are destroyed, their production facilities are dismantled, their navy is sunk, and their proxies are weakened. Now, they are being strangled economically by Operation Economic Fury and losing $500 million per day thanks to the United States military’s successful blockade of Iranian ports,” White House Deputy Press Secretary Anna Kelly told us. “The Iranian regime knows full well their current reality is not sustainable, and President Trump holds all the cards as negotiators work to make a deal.”

CENTCOM has not responded to our query.

The reported expansion is the second announced by Iran since the start of its conflict with the U.S. and Israel.

The IRGC did not specify what actions it would take under its expanded definition. However, while the vast majority of Iran’s naval forces have been destroyed during Epic Fury, it has been attacking ships in the region with cruise missiles, drones and its fleet of small attack boats that remains largely intact. In addition, Iran has reportedly continued mining the Strait even after the April 7 ceasefire.

Both U.S. Central Command (CENTCOM) and Iran say the IRGC launched strikes against U.S. Navy warships and commercial vessels they were helping to protect during the short-lived Project Freedom on May 4. That was an effort, created by Trump, to help guide ships through the Strait that was paused after about 36 hours. CENTCOM forces responded with strikes on attacking ships. Days later, another exchange of fire took place, with CENTCOM saying it bombed Iranian targets after destroyers came under fire transiting the Strait to the Gulf of Oman.

Meanwhile, the Navy has disabled four Iranian vessels trying to run the ongoing blockade.

The IRGC said the new definition was created in response to yesterday’s statements by President Donald Trump repeating that Iran’s Navy has been destroyed by U.S. attacks during the now-paused Operation Epic Fury.

“This very design and implementation of the new plan shows that this force is present on the scene with authority,” Akbarzadeh proffered.

As we noted yesterday, frustrated by the pace of negotiations, Trump threatened new military action against Iran ranging from resuming Project Freedom to new airstrikes against Iranian targets and perhaps even a ground incursion to retrieve Iran’s highly enriched uranium.

The closure of the Strait is having a direct impact in the U.S., spurring Trump to consider pausing the federal gas tax as a form of relief for American consumers as energy prices soar, The Washington Post noted. The move — which requires congressional approval to pass — would mark the latest in a string of government interventions to address fallout from the war.

“Since the war began in late February, the price of a barrel of Brent crude oil, an international benchmark, has skyrocketed from about $70 to more than $107. U.S. gas prices — now an average of $4.50 a gallon — have reached levels not seen since 2022 and contributed to Trump’s falling approval ratings ahead of the November midterms,” the Post stated.

The impacts of the closure are even greater in Asia, which relies more heavily on oil that normally transits the Strait. For instance, Indian Prime Minister Narendra Modi asked his nation’s 1.4 billion people to spend less on fuel, fertilizer, and travel, The New York Times reported. 

Modi “made these sweeping recommendations in a national address on Sunday after securing a big win for his party in recent state elections,” the newspaper added. “With that victory in hand, he no longer has to worry that voters might punish his candidates for higher prices of fuel, food and transport, which are tightly controlled by India’s government. Instead of subsidizing the losses and running huge budget deficits, India’s leader appears emboldened to ask its people to bear the burden.”

Heavy ship traffic and rising regional tensions fuel fears of a wider confrontation over one of the world’s most critical energy routes. Al Jazeera’s Tohid Asadi gets exclusive access to report from the Strait of Hormuz.

BEIJING — The Trump administration has repeatedly framed the war in Iran as a quick, winnable fight, vowing to defeat the Islamic Republic “totally and decisively” — incomparable to the “dumb” wars in Iraq and Afghanistan.

But from China’s perspective, the parallels are clear.

“You can blow everything up — destroy it all,” one Chinese official told The Times, describing the Americans, “but you don’t have a strategy.”

President Trump arrives in Beijing this week for talks with a Chinese government that is confident as ever in its ascendance on the world stage, taking stock of its leverage and still baffled the U.S. administration chose yet another costly war in the Middle East.

China has watched as the United States, over seven weeks of fighting an outmatched enemy, has depleted nearly half of its stockpiles of high-end munitions — including its THAAD and Patriot batteries — and fired its Army chief of staff, among other Pentagon leaders, who had warned of critical shortages.

Marco Rubio, Trump’s national security advisor and secretary of State, has said the military operation that started the war known as Operation Epic Fury “is over.”

But the Strait of Hormuz, one of the world’s most vital commercial waterways, remains effectively shuttered. Iranian attacks in the region continue. And talks between Washington and Tehran have failed to reach a diplomatic agreement to bring a definitive end to the conflict.

“The Chinese have high regard for the operational proficiency of U.S. forces, but they recognize that, thus far at least, the Trump administration has not achieved its core objectives in going to war with Iran,” said David Ochmanek, a former deputy assistant secretary of Defense now with the Rand Corp.

The war has given Beijing an opportunity, Ochmanek said, “to double down on the claim they have made for the past year and a half that the [People’s Republic of China], not the U.S., is a force for global stability.”

The war has allowed China to demonstrate some diplomatic prowess. An initial ceasefire reached between the United States and Iran last month was only clinched after Beijing pressured Tehran to agree. And China’s advocacy for an open strait — rejecting Iranian attempts to impose a toll system — while opposing the U.S. war itself has allowed Beijing to maintain leverage with both sides.

It has also inflicted costs. Allies of Beijing noticed when the government did not leap to the defense of Tehran at the start of the war. And China has its own vested interest in a free and open waterway, where nearly 50% of the country’s crude oil imports pass through each day.

Building up to the start of the war and throughout its initial weeks, Washington diverted significant military assets from Asia — where Trump’s own national security strategy says they are needed most — to the Middle East.

The USS Abraham Lincoln was redirected from the South China Sea, along with scores of advanced missile interceptors from South Korea and Japan and nearly the entire U.S. inventory of long-range air-to-surface missiles in the Pacific.

Policy experts at the Pentagon were brought in to discuss a potential invasion of Kharg Island, the jewel of Iran’s oil industry, to draw lessons from planning a defense of Taiwan, according to a Defense official, who was granted anonymity to speak candidly. A Marine expeditionary unit was sent from Okinawa to the region for the potential operation.

Chinese officials and analysts have been candid in their assessments of U.S. hard power, impressed by a military they acknowledge remains the best in the world.

But Beijing sees a persistent flaw in U.S. strategy: the belief that military strength alone can reshape political realities, a view further weakened by the pressures on a democratic government whose public grows impatient with wars that drag on beyond days or weeks.

China’s autocracy is free from accountability to the public — and anyway has confidence that Chinese public opinion would be on its side if it were to launch a major military operation against its main target, Taiwan.

But there are lessons of caution to be learned from the Americans, as well.

Over the last year, the Taiwanese Navy has been practicing the rapid deployment of cheap and domestically produced smart mines for the sea — a potential bulwark against enemy blockades of ports and hostile invasion forces.

It is the type of asymmetric warfare that has so far frustrated the U.S. military in the Strait of Hormuz, protracting a war that Trump vowed would last a month or less.

Taiwan, too, would confront Beijing with political realities that military force cannot erase. Nearly 90% of the Taiwanese people oppose a Chinese takeover, and about 60% say they would resist it at all costs.

“Chinese analysts see two things at once,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “They are impressed by U.S. military reach, precision and operational capability, but they also see a familiar pattern of American power struggling to translate battlefield success into a durable political outcome.”

That matters for Taiwan, Singleton said, “because China’s own military modernization has borrowed heavily from the American model, relying heavily on joint operations, high-tech precision strikes, decapitation concepts and information dominance.

“If the world’s most experienced military can still struggle to convert military pressure into political success,” he added, “Beijing has to ask whether the [People’s Liberation Army] could do better in a far more complex Taiwan scenario.”

The Strait of Hormuz has become the central strategic battleground in the ongoing confrontation involving Iran, the United States, and regional Gulf powers. What initially appeared to be a military conflict is increasingly evolving into a struggle over maritime control, energy security, and geopolitical influence.

Since the outbreak of hostilities following the joint United States and Israeli strikes on Iran in February, Tehran’s near closure of the Strait of Hormuz and Washington’s retaliatory naval blockade have severely disrupted global energy markets. The conflict has reduced the movement of oil and liquefied natural gas through one of the world’s most critical maritime chokepoints, creating economic instability far beyond the Middle East.

Recent tanker movements coordinated through informal understandings with Tehran suggest that Iran may now be shifting from blocking Hormuz entirely to selectively controlling access. This emerging dynamic could fundamentally reshape Gulf security and international energy politics.

Hormuz Is No Longer Just a Trade Route

The Strait of Hormuz is one of the most strategically important waterways in the global economy. Before the conflict, roughly one fifth of global oil and liquefied natural gas shipments passed through the narrow corridor each day.

Its disruption has exposed the vulnerability of global energy markets to geopolitical conflict. Asian economies have been particularly affected because of their heavy dependence on Gulf energy exports. Oil supply disruptions and rising transportation risks have intensified inflationary pressure, energy insecurity, and market volatility across multiple regions.

The recent passage of a limited number of oil and gas tankers with apparent Iranian approval demonstrates that Tehran may now be exercising selective authority over maritime transit rather than enforcing a complete blockade.

This distinction is critical because it suggests Iran is attempting to transform military leverage into long term political and economic influence.

Iran’s Emerging Strategy of Selective Access

The limited reopening of shipping lanes indicates that Tehran may be developing a new model of strategic control. Rather than permanently shutting down the strait, Iran appears to be determining which countries, companies, or shipments can safely transit through the waterway.

This selective access system gives Tehran several advantages.

First, it allows Iran to maintain pressure on global energy markets without fully halting trade flows that could trigger overwhelming international military intervention.

Second, it creates potential economic benefits through informal transit arrangements, leverage over energy dependent states, and indirect influence on oil pricing.

Third, it positions Iran as a gatekeeper within one of the world’s most important strategic corridors, expanding its geopolitical relevance despite sanctions and military pressure.

The reported coordination involving Pakistan and Qatar also demonstrates how regional diplomacy is becoming intertwined with energy security and conflict management.

Gulf States and the United States Face Strategic Risks

For Gulf Arab states such as Saudi Arabia, United Arab Emirates, and Qatar, any arrangement that allows Iran to regulate maritime access poses a direct strategic threat.

Their economies depend heavily on uninterrupted hydrocarbon exports, and Iranian control over transit patterns would increase Tehran’s regional influence at their expense.

Asian importers are equally vulnerable because selective access introduces political uncertainty into global energy supply chains. Countries dependent on Gulf oil and gas would become increasingly exposed to Iranian political calculations.

For the United States, accepting Iranian dominance over Hormuz would undermine Washington’s broader strategic objectives in the region. The Trump administration has repeatedly emphasized restoring unrestricted freedom of navigation as a core war aim.

Allowing Iran to effectively manage maritime access would signal a major geopolitical shift and weaken perceptions of American regional dominance.

Why the Current Situation May Become More Dangerous

The most concerning aspect of the emerging situation is that temporary wartime arrangements could solidify into a long term strategic reality. Even if a ceasefire is eventually reached, Iran may resist fully restoring unrestricted navigation because Hormuz now represents its strongest source of leverage against the United States and regional rivals.

This creates the conditions for a prolonged state of instability rather than genuine conflict resolution.

A system based on selective transit rights would likely produce repeated confrontations as regional powers, Western navies, shipping companies, and energy importers challenge or negotiate the limits of Iranian control.

Such a situation would institutionalize uncertainty in global energy markets and increase the likelihood of future military escalation.

Analysis

The battle over the Strait of Hormuz reflects a broader transformation in modern geopolitical conflict where control over trade routes and economic chokepoints can become more strategically valuable than territorial conquest.

Iran appears to recognize that its greatest strength lies not in conventional military superiority but in its ability to disrupt the global economy through maritime leverage. By controlling the flow of energy through Hormuz, Tehran can influence oil prices, inflation, international diplomacy, and political stability in rival states.

This gives Iran asymmetric power against economically stronger adversaries.

The United States faces a difficult strategic dilemma. Military escalation aimed at fully reopening Hormuz could deepen regional conflict and further destabilize global markets. However, tolerating selective Iranian control risks weakening American credibility and altering the regional balance of power in Tehran’s favor.

The current situation also exposes the limits of military power in resolving structural geopolitical disputes. Even if active fighting declines, the underlying contest over maritime control, energy security, and regional influence will likely persist.

Ultimately, the future of the Gulf may increasingly depend not on battlefield victories, but on who shapes the rules governing the movement of energy through the Strait of Hormuz. If selective Iranian control becomes normalized, the region could enter a prolonged era of economic coercion, strategic competition, and recurring confrontation.

With information from Reuters.

A former Philippine Navy warship was sent to the bottom today by the combined effects of maritime strike drills launched by Japanese, Philippine, and U.S. forces in the Luzon Strait, one of the world’s most strategic and tense bodies of water. The maneuvers, which reportedly involved a variety of anti-ship missiles and rocket artillery, were part of the broader Balikatan exercise, which is especially important in the context of rising tensions in the Indo-Pacific.

Located roughly 50 miles offshore, the target vessel for a live-fire sinking exercise (SINKEX) campaign was the decommissioned Philippine Navy Rizal class patrol corvette, the former BRP Quezon. The ship was originally completed for the U.S. Navy as an Auk class minesweeper during World War II, serving as the USS Vigilance before being transferred to the Philippines and serving in a new role in the late 1960s. The BRP Quezon, which had a standard displacement of 890 tons, was decommissioned in 2021.

The maritime strike (MARSTRIKE) drills were conducted on the island of Luzon, which sits at the northern end of the Philippines, and is the country’s largest and most populous island. Specifically, the live-fire drills took place around the Paoay Sand Dunes, in the coastal region of Ilocos Norte.

The drills began around 10:00 a.m. local time with a U.S. Army M30/31 Guided Multiple-Launch Rocket System (GMLRS) fired as a “probing round,” with the location of the target vessel being confirmed around 10:15 a.m.

The GMLRS artillery rocket is a highly precise, rapid-strike weapon that can attack targets to a distance of around 50 miles, which would put it right at the limit of its range. It is fired from the M142 High Mobility Artillery Rocket System (HIMARS) that can launch six guided or unguided 227mm artillery rockets or a single Army Tactical Missile System (ATACMS) missile without reloading. GMLRS is not capable of engaging moving targets, so it has limited application in the traditional anti-ship mission set.

In a combined strike, anti-ship missiles were reportedly then launched from a U.S. Marine Corps Navy-Marine Expeditionary Ship Interdiction System (NMESIS) and from a Philippine Navy C-Star system.

Of these, NMESIS employs an uncrewed variant of the 4×4 Joint Light Tactical Vehicle (JLTV), also known as the Remotely Operated Ground Unit Expeditionary-Fires (ROGUE-Fires), on which is mounted a launcher with two ready-to-fire Naval Strike Missiles (NSM). These have a range of around 130 miles and have low-observable features, making them harder for enemy air defenses to detect and engage.

NMESIS is meant to be rapidly deployable and capable of highly dispersed operations in austere areas. As an uncrewed vehicle-launcher combo, small teams of Marines monitor multiple launchers dispersed around an area and move them regularly to keep them from being targeted by the enemy. The system was first deployed in a Balikatan exercise last year, as you can read about here.

While Philippine media reports that the NMESIS, operated by the Hawaii-based 3rd Marine Littoral Regiment, fired a missile during today’s drill, this is refuted by a report from Stars and Stripes. The 3rd MLR is notable in itself, being expressly designed to fight within an enemy’s own littorals, with all the challenges that brings.

Meanwhile, the C-Star is the Philippine Navy’s primary anti-ship missile. Produced by South Korea’s LIG Nex1, a version of this missile is used by the Republic of Korea Navy as the Haeseong. The Philippines uses the C-Star to arm its two Miguel Malvar class and two Jose Rizal class frigates, which are also made in South Korea. Similar to the U.S.-made Harpoon, the C-Star is a turbojet-powered, sea-skimming missile with a range of around 90 miles.

In the drill, the C-Star was likely fired from the Philippine Navy frigates BRP Miguel Malvar and Antonio Luna, both of which are known to be taking part in Balikatan.

These were followed by two rounds fired from a Japanese land-based Type 88 anti-ship missile system, fired for the first time during a Balikatan exercise, and for the first time anywhere outside Japan. The Japanese missiles reportedly struck the hull of the target ship around 10:30 a.m.

JSDF Type 88 missiles fire for the first time in Balikatan 2026 | GMA News

Developed by Mitsubishi Heavy Industries in the 1980s, the Type 88 (also known as the SSM-1) is the primary coastal anti-ship missile system of the Japan Self-Defense Forces, with a range of around 100 miles, although more capable and further-reaching weapons are now in development, as you can read about here.

Interestingly, in a video released of the live-fire event in Ilocos Norte, close protection was being provided to the truck-mounted Type 88 launcher by a Marine Air Defense Integrated System (MADIS), also from the 3rd Marine Littoral Regiment. MADIS utilizes the JTLV and distributes different sensors and effectors between individual JLTVs, as you can read more about here. In this kind of scenario, it would be tasked with protecting the coastal missile battery against kamikaze drones and other aerial threats at short ranges.

The vessel sank rapidly, meaning that the Philippine Air Force wasn’t able to deliver more munitions onto the target. FA-50 light combat aircraft and A-29 Super Tucano turboprop close support aircraft had both been prepared to strike the same ship, but were stood down.

Other air assets taking part included a U.S. Navy P-8 Poseidon maritime patrol aircraft and an MQ-9 drone.

With the ship sunk or sinking, a coup de grace was provided by a U.S. HIMARS, which fired onto the same coordinates.

Also involved in Balikatan is the Royal Canadian Navy frigate HMCS Charlottetown, although it appears that it didn’t take part in the live-fire event.

According to a Philippine military spokesperson, another round of live-fire drills will take place tomorrow as part of Balikatan, utilizing a stand-by target vessel. This will also allow Philippine Air Force aircraft to take part.

The live-fire drills, conducted under the Balikatan exercise, signaled a notable expansion of Japan’s military role in the region as Tokyo strengthens security partnerships with its allies amid growing tensions with Beijing.

Overall, the live-fire exercise is highly significant due to its proximity to the Chinese mainland and the long range of some of the missiles that have been employed.

The Luzon Strait, into which the various missiles and rockets were fired, sits between Taiwan and the Philippines, spanning about 220 miles at its narrowest point. It serves as a vital shipping route and a highly strategic military corridor, particularly for China’s rapidly expanding naval forces. From this passage, assets stationed in the South China Sea can move into the Philippine Sea and the wider Pacific, and back again. This includes China’s growing fleet of nuclear-powered submarines, some of which underpin its second-strike nuclear deterrent.

The strait is also a crucial gateway for the U.S. Navy entering the South China Sea and would likely be a central battleground in any major conflict over Taiwan. Because of its importance, the area is closely monitored for activity both above and below the surface. In the event of war, it would quickly turn into a dense anti-ship missile engagement zone (SMEZ). The live-fire campaign today gave just a small taster of that kind of contingency.

Earlier this week, the U.S. Army test-fired a Tomahawk cruise missile from a Typhon launcher in the central Philippines, successfully hitting a target around 370 miles away in Nueva Ecija.

On this occasion, the Tomahawk missile was supporting ground troops in a night land maneuver exercise led by the 25th Infantry Division in Fort Magsaysay, part of the Balikatan exercise.

The Typhon ground-based missile system can also fire SM-6 multi-purpose missiles, which are used in this application in a quasi-ballistic missile land-attack mode. As for the Tomahawk cruise missile, this provided land attack and anti-ship capabilities. 

As we have discussed before, Typhon’s arrival in the Philippines in 2025 sent a clear signal to Beijing and throughout the region. It is a glimpse of what’s to come as the service works through plans to permanently base these systems in China’s backyard.

Compared to the longer-range Typhon, which is deployed further from the Luzon Strait, for the Balikatan exercise, the shorter-range NMESIS and Type 88 anti-ship missiles are pushed much closer to the zone in which their likely wartime targets would be found. As we have explored in the past, anti-ship missiles of this kind, and especially NMESIS, can also be deployed deeper into the strait, making use of smaller Philippine islands, like the Batanes island chain, although that ratchets up their exposure to counterstrikes considerably.

For both these kinds of missiles, their survival would rely upon the dispersal of launchers and other vehicles, as well as regularly moving them around to help prevent them from being targeted by the enemy. Of course, with the uncrewed NMESIS, this is designed from the ground up to not put personnel in harm’s way. All of this kind of doctrine is central to the Marines’ Expeditionary Advanced Base Operations (EABO) strategy, which is now a core tenet of how it would fight in the Pacific.

Already, China has voiced its displeasure at the deployment of the U.S. Army’s Typhon system to the Philippines. What is now becoming a regular appearance of NMESIS, backed up by other highly mobile strike systems, including allied anti-ship missiles, within reach of the Luzon Strait, will undoubtedly trigger similar concerns in Beijing. However, the live-fire sinking exercise today underscores how critical this waterway is to the U.S. military and its allies in the region, just as it is to China. Having more varied and more mobile anti-shipping assets in the northern Philippines complicates targeting for China, while extending the capabilities of the anti-access strategy of the U.S. military and its allies in the Luzon Strait, should a conflict break out.

Contact the author: thomas@thewarzone.com

Brent crude rises amid clashes in critical waterway.

Oil prices have jumped after clashes between United States and Iran in the Strait of Hormuz pushed their tenuous ceasefire to the brink.

Futures for Brent crude rose as much as 7.5 percent during a volatile trading session on Thursday, before easing as Asia’s markets opened on Friday morning.

The international benchmark stood at $101.12 per barrel as of 03:00 GMT, down from the day’s high of $103.70.

The latest rise came after the US and Iran exchanged fire in the critical strait, a conduit for about one-fifth of global oil and natural gas supplies, despite the truce announced between the sides on April 7.

US Central Command (CENTCOM) said it launched strikes on Iran after three US Navy guided-missile destroyers came under attack from Iranian missiles, drones and small boats in the strait.

Iran’s Khatam al-Anbiya Central Headquarters earlier accused the US of violating the ceasefire by attacking an Iranian oil tanker and another vessel in the vicinity of the waterway.

The Iranian military headquarters also accused the US of targeting civilian areas, including Qeshm Island.

US President Donald Trump on Thursday appeared to downplay the clashes, saying the ceasefire remained in effect, while Iran’s state-run Press TV said the situation had gone “back to normal”.

Shipping in the strait has been at a near standstill since late February amid the threat of Iranian attacks on the massive oil tankers that usually transport much of the world’s energy supplies.

Brent prices are up about 40 percent compared with before the war amid an estimated shortfall in daily production of 14.5 million barrels.

Asian stock markets opened lower on Friday amid the heightened tensions, with Japan’s benchmark Nikkei 225, South Korea’s KOSPI and Hong Kong’s Hang Seng Index each falling more than 1 percent.

On Wall Street, the benchmark S&P 500 fell about 0.4 percent overnight after hitting an all-time high the previous day.

Iranian media outlets are reporting that a port on Iran’s largest island in the Strait of Hormuz came under attack. However, details are scant at the moment and no images have emerged to support the claims. We have reached out to U.S. Central Command for more information. The reports come as negotiations between the U.S. and Iran to end the war have been ongoing during a fragile ceasefire that would be further imperiled by a new round of fighting.

This story has been updated with new information from CENTCOM that it attacked Iranian targets in response to U.S. Navy destroyers being fired on by Iran.

“FARS investigations in Bandar Abbas show that during the exchange of fire between the Iranian armed forces and the enemy, parts of the commercial area of Bahman Qeshm pier were targeted,” the official Iranian FARS news outlet reported on Telegram.

US president Donald Trump has said that the US military operation “Project Freedom” guiding ships through the Strait of Hormuz will be paused for a short period. He cited a request from Pakistan and progress towards a final deal with Iran.

United States President Donald Trump has said that the US military operation to move stranded ships out of the Strait of Hormuz has been paused temporarily.

Trump made the announcement on his Truth Social platform on Tuesday.

He said the decision was made “based on the request” of Pakistan and other countries and the “fact that Great Progress has been made toward a Complete and Final Agreement” with representatives of Iran.

“We have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed,” he wrote.

There was no immediate comment from Iran.

Trump’s announcement came as tensions escalated in the Gulf, with the US military saying it destroyed several Iranian boats in the Strait of Hormuz, as well as cruise missiles and drones. The United Arab Emirates said its air defences dealt with missile and drone attacks from Iran for a second day, while another commercial ship in the Strait of Hormuz reported being hit by an “unknown projectile”.

For its part, Iran’s Islamic Revolutionary Guard Corps (IRGC) issued a new map of the strait, with an expanded area of Iranian control, and warned vessels on Tuesday to stick to the corridors it has set or face a “decisive response”.

In Washington, DC, Secretary of State Marco Rubio told reporters that the US has completed its offensive operations against Iran, dubbed “Operation Epic Fury”, and “there’s no shooting unless we’re shot at first”.

But Iran must “pay a price” for its efforts to control the strait, he said.

“The Straits of Hormuz do not belong to Iran. They don’t have a right to shut it down and blow up ships and lay mines,” Rubio said.

“Under no circumstances can we live in a world where we accept, ‘OK, this is normal – you have to coordinate with Iran. You have to pay them a toll in order to go through the Straits of Hormuz’. Not only is that unacceptable in the straits, you’re creating a precedent that could be repeated in multiple other places around the world.”

The maritime chokepoint, through which roughly one-fifth of the world’s energy supplies normally pass, has been effectively sealed by Iran since the US and Israel launched their war on the country on February 28.

Following a ceasefire in April, the US imposed its own blockade on Iranian ports in a bid to compel Tehran to agree to Washington’s terms in peace talks mediated by Pakistan, including reopening the key waterway and halting all nuclear enrichment.

The closure of the strait has disrupted global trade, causing oil and fertiliser prices to soar and prompting fears of a global recession and a food emergency.

Earlier on Tuesday, Trump told reporters at the White House that the US’s military and economic action was forcing Tehran to the negotiating table despite its defiant public stance.

“Iran wants to make a deal. What I don’t like about Iran is they’ll talk to me with such great respect, and then they’ll go on television. They’ll say, ‘We did not speak to the president’,” he said. “So they play games. But let me just tell you, they want to make a deal. And who wouldn’t? When your military is totally gone, we could do anything we want to them.”

Trump, who is facing mounting pressure at home as petrol prices rise ahead of crucial midterm elections, went on to say that Iran’s military had ‌been reduced to firing “peashooters”.

When asked what Iran would need to do to violate the ceasefire, Trump said: “They know what not ⁠to do.”

US Secretary of Defense Pete Hegseth, meanwhile, said that the renewed violence in the Strait of Hormuz does not constitute a breach of the four-week-old truce.

“American forces won’t need to enter Iranian waters. It’s not necessary. We’re not looking for a fight. But Iran cannot be allowed to block innocent countries and their goods from international waterways,” he said at the Pentagon.

“Right now, the ceasefire certainly holds, but we’re going to be watching very, very closely,” he added.

WASHINGTON — The United States has launched a new military operation to ensure commercial shipping vessels can safely pass through the Strait of Hormuz, deploying scores of warships, fighter jets and drones to counter Iranian efforts that have threatened the narrow waterway that carries a fifth of the world’s oil.

At a news conference Tuesday at the Pentagon, Defense Secretary Pete Hegseth said the new initiative — dubbed “Project Freedom” — is a temporary and defensive operation meant to resume the flow of traffic through the international waterway as hostilities have continued in the region.

“We are not looking for a fight, but Iran cannot be allowed to block innocent countries and their goods from an international waterway,” Hegseth said, while calling Iran’s tactics “international extortion.”

The operation comes nearly a month after the United States reached a fragile ceasefire deal with Iran, a truce that Hegseth said remains in effect even though Tehran has continued to attack U.S. forces and commercial vessels.

“The ceasefire is not over,” Hegseth said.

Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, said that since the ceasefire took effect, Iran has fired at commercial vessels nine times, seized two container ships and attacked U.S. forces more than 10 times. All of these instances, he said, are “below the threshold of restarting major combat operations at this point.”

Those attacks have left more than 1,550 vessels trapped in the Arabian Gulf, unable to transit, disrupting global trade and pushing energy markets toward crisis, with fuel prices climbing and shipping costs surging.

The new U.S. mission was cast as separate from the broader military campaign over Iran’s nuclear weapons program. As negotiations to denuclearize Iran continue, Caine said commercial vessels wanting to cross the strait will now “see, hear and frankly feel the U.S. combat power around them, on the sea, in the skies and on the radio.”

Two U.S. commercial vessels, escorted by Navy destroyers, have already moved through the Strait, Hegseth said.

“We know the Iranians are embarrassed by this fact,” Hegseth said. “They said they control the strait, they do not.”

Hegseth called the operation a “direct gift from the United States to the world,” aimed at resuming traffic through one of the world’s most vital waterways.

“To what remains of Iran’s forces: if you attack American troops or innocent commercial shipping, you will face overwhelming and devastating American firepower,” Hegseth said. “The president has been very clear about this.”

On Tuesday evening local time, the UAE’s defense ministry said in a statement on X that the country’s defensive systems “are actively engaging with missiles and UAV threats and that “sounds heard across the across the country are the result of ongoing engaging operations.”

Tuesday’s barrage marks the second consecutive day of attacks targeting the UAE since the U.S.-Iran ceasefire took hold on April 8. On Monday, the UAE said it engaged a total of 12 ballistic missiles, three cruise missiles and four drones launched from Iran.

Times staff writer Nabih Bulos, in Beirut, contributed to this report.

U.S. Central Command said its new plan to protect commercial shipping in the Strait of Hormuz kicked off Monday with the safe passage of two U.S.-flagged merchant ships. Dubbed Project Freedom, the operation is designed to “restore freedom of navigation for commercial shipping” through this strategically vital body of water, the command stated on X. Iran closed the Strait after being attacked by the U.S. and Israel on Feb. 28. Meanwhile, Iran says this move will threaten the fragile ceasefire and that it will attack any ships transiting the Strait without permission.

“U.S. Navy guided-missile destroyers are currently operating in the Arabian Gulf after transiting the Strait of Hormuz in support of Project Freedom,” CENTCOM stated in a message posted on X Monday morning. “American forces are actively assisting efforts to restore transit for commercial shipping. As a first step, 2 U.S.-flagged merchant vessels have successfully transited through the Strait of Hormuz and are safely headed on their journey.”

CENTCOM didn’t say which ships transited the Strait and it is unclear if the Navy destroyers escorted them. We have reached out to CENTCOM for more details.

Project Freedom involves “guided-missile destroyers, over 100 land and sea-based aircraft, multi-domain unmanned platforms, and 15,000 service members,” CENTCOM said in a post on X Sunday.

“The mission, directed by the President, will support merchant vessels seeking to freely transit through the essential international trade corridor,” CENTCOM added. “A quarter of the world’s oil trade at sea and significant volumes of fuel and fertilizer products are transported through the strait.”

“Our support for this defensive mission is essential to regional security and the global economy as we also maintain the naval blockade,” said Adm. Brad Cooper, CENTCOM commander.

President Trump on Sunday framed Project Freedom as an effort to gets ships and crews out of the Strait. It is unclear if this operation will also protect ships trying to enter as well. It’s possible this could occur once CENTCOM evaluates the realities in the waterway as ships are evacuated. We will update this story with any additional details we learn.

As part of Project Freedom, vessels “choosing to transit the Strait of Hormuz should consider routing via Oman territorial waters south of the Traffic Separation Scheme,” U.S. Navy Central (NAVCENT) cautioned Monday morning. The Traffic Separation Scheme refers to new traffic patterns Iran set up for ships transiting the Strait through its territorial waters.

“Due to anticipated traffic volume, coordination with Oman authorities via VHF channel 16 is advised to maintain safety of navigation,” according to NAVCENT. “Transit via or in close proximity to the Traffic Separation Scheme should be considered extremely hazardous due the presence of mines that have not been fully surveyed and mitigated.”

Iran has placed an undetermined number of mines in the Strait since the war broke out, a U.S. official told us.

As we noted last week, the UK Maritime Trade Operations (UKMTO) group says strait transits have fallen by more than 90%, leaving 850 merchant ships and around 20,000 sailors trapped inside the Gulf and unable to leave. 

In reaction to Project Freedom and the new NAVCENT transit guidance, the Islamic Revolutionary Guard Corps (IRGC) on Monday warned that “maritime movements of vessels, contrary to the regulations declared by the Iranian Navy, would face serious risks, and that they would be stopped by force.”

The IRGC added that it maintains control over the Strait and that ships adhering to its rules will be safe. In addition, it called Project Freedom, as well as the ongoing U.S. naval blockade of Iranian ports, acts of “piracy.” IRGC also said that Project Freedom is in violation of the April 8 ceasefire agreed to by the U.S. and Iran.

In addition to the IRGC warning, Iranian media claimed that “two missiles struck a U.S. Navy patrol boat. This patrol boat, which today moved near Jask violating security and navigation rules intending to pass through the Strait of Hormuz, was targeted by a missile attack after ignoring the warning from the Islamic Republic of Iran Navy.”

The official Iranian FARS news agency added that the “patrol boat was unable to continue its route due to the hits and was forced to retreat and flee the area.”

Iranian media offered no proof of the attack. In a post on X, CENTCOM denied that claim.

“No U.S. Navy ships have been struck,” the command stated. “U.S. forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports.”

🚫 CLAIM: Iranian state media claims that Iran’s Islamic Revolutionary Guard Corps hit a U.S. warship with two missiles.

✅ TRUTH: No U.S. Navy ships have been struck. U.S. forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports. pic.twitter.com/VFxovxLU6G

— U.S. Central Command (@CENTCOM) May 4, 2026

However, the United Arab Emirates on Monday said that one of its oil tankers was attacked by two Iranian drones as it sailed through the Strait.

“The UAE condemns in the strongest terms the targeting of a national tanker affiliated with [Abu Dhabi National Oil Company] ADNOC while passing through the Strait of Hormuz,” the UAE Foreign Ministry stated on X, adding that there were no injuries in the attack.

The ministry did not say which ship was attacked or when. However, the United ​Kingdom ⁠Maritime Trade Operations (UKMTO) agency said it received a report of an incident on May 3 “78NM north of Fujairah, United Arab Emirates. A tanker has reported being hit by unknown projectiles. All crew reported safe. No environmental impact reported.”

Project Freedom and the new NAVCENT transit guidance were launched following a message U.S. President Donald Trump posted Sunday on his social media.

“Countries from all over the World, almost all of which are not involved in the Middle Eastern dispute going on so visibly, and violently, for all to see, have asked the United States if we could help free up their Ships, which are locked up in the Strait of Hormuz, on something which they have absolutely nothing to do with — They are merely neutral and innocent bystanders!” Trump proclaimed on Truth Social. “For the good of Iran, the Middle East, and the United States, we have told these Countries that we will guide their Ships safely out of these restricted Waterways, so that they can freely and ably get on with their business.”

The president added that Project Freedom is a humanitarian effort, conducted as the U.S. and Iran are working on ways to end the conflict.

“I am fully aware that my Representatives are having very positive discussions with the Country of Iran, and that these discussions could lead to something very positive for all,” Trump avowed. “The Ship movement is merely meant to free up people, companies, and Countries that have done absolutely nothing wrong — They are victims of circumstance. This is a Humanitarian gesture on behalf of the United States, Middle Eastern Countries but, in particular, the Country of Iran.”

Still, if Iran does not comply, Trump issued a warning to Tehran. 

“I think it would go a long way in showing Goodwill on behalf of all of those who have been fighting so strenuously over the last number of months,” the American leader posited. “If, in any way, this Humanitarian process is interfered with, that interference will, unfortunately, have to be dealt with forcefully.” 

Trump on Truth Social announces that “Project Freedom” will begin in the morning to get ships out of the Strait of Hormuz pic.twitter.com/a7ygbWUEFQ

— Ben Jacobs (@Bencjacobs) May 3, 2026

As Project Freedom kicks off, shipping companies are taking a wait-and-see attitude about its effectiveness.

“We of course welcome initiatives aimed at improving the security situation in principle,” a spokesperson for German shipping giant Hapag-Lloyd told us Monday morning. “However, we currently have too little information on how such an escort service could be safely implemented in practice, so we are maintaining our risk assessment. We have taken note of the latest announcement. We are currently reviewing the information available and are in close contact with relevant authorities and our security partners.”

“At this stage, our risk assessment remains unchanged and the Strait of Hormuz remains closed for Hapag-Lloyd transits until further notice,” the company added.

While CENTCOM says Project Freedom had a successful first encounter, there are still many questions to be answered about this operation. Despite Iranian bluster, it is unknown so far if its threats are just posturing for domestic consumption or if they will really fire on U.S. warships. Such a move would guarantee a ferocious U.S. response and an end, at least temporarily, to the ongoing moves to stop the now-paused war.

Update: 2:15 PM EDT –

Earlier today, U.S. Army AH-64 Apache and U.S. Navy MH-60 Seahawk helicopters destroyed six small Iranian boats that were threatening commercial ships in and around the Strait of Hormuz, according to Cooper. You can read more about that here.

Contact the author: howard@thewarzone.com

The presidential office said Tuesday it will likely take several days to determine the cause of an explosion and fire aboard a Panama-flagged bulk carrier operated by South Korea’s HMM Co. in the Strait of Hormuz.

Presidential spokesperson Kang Yu-jung made the remarks in a written briefing after senior presidential officials, including presidential chief of staff Kang Hoon-sik, held a meeting to discuss the response to the fire.

“It is expected to take several days to analyze the cause,” the spokesperson said. “The government will brief the public transparently after swiftly and accurately determining the cause of the incident.”

The spokesperson said the vessel will be towed to a nearby port using a tugboat for investigation, with investigators from the Korea Maritime Safety Tribunal and the National Fire Agency to be dispatched.

The explosion occurred at about 8:40 p.m. Monday (Korean time), while the HMM Namu was anchored in waters off the United Arab Emirates (UAE), HMM said. The fire began in the engine room, and crew members used carbon dioxide to fight the blaze for about four hours. No injuries were reported, the company said Tuesday.

HMM said security camera footage showed the fire had been put out and said it would later inspect the engine room to assess the damage.

The freighter had 24 crew members on board — six South Koreans and 18 foreign nationals.

The cause of the explosion and fire, as well as the extent of the damage, is currently under investigation.

“It remains unclear whether the incident was caused by an external attack or an internal malfunction,” an HMM official said.

HMM said it plans to tow the freighter to Dubai, a process expected to take several days.

The spokesperson said South Korea is sharing relevant information with the United States, Iran and members of the Gulf Cooperation Council, including Saudi Arabia and the UAE.

She said the oceans ministry and the Cheonghae naval unit operating in the Gulf of Aden are in communication with the HMM Namu, adding the government is in daily contact with the 26 South Korean ships anchored in the strait.

In Washington, U.S. President Donald Trump said Monday that Iran has taken shots at a South Korean cargo ship and other targets as he called on Seoul to participate in a mission to reopen the crucial Strait of Hormuz.

The presidential office separately said it is reviewing Trump’s proposal by considering the readiness posture on the Korean Peninsula and domestic legal procedures.

“(We) are actively taking part in multiple international efforts for the swift stabilization, recovery and normalization of the global maritime logistics network.” it said. “In this context, (we) are paying attention to President Trump’s remarks.”

Industry officials said South Korean-operated ships in waters off the UAE were moving toward Qatar in line with government measures to steer clear of the Strait of Hormuz for safety.

The incident came after the U.S. launched an operation, called Project Freedom, this week to guide commercial vessels stranded by the U.S.-Israeli war against Iran out of the waterway.

HMM operates five vessels in the Strait of Hormuz, including one container ship and two oil tankers.

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BEIRUT — Confusion reigned on Monday over the fate of a fragile ceasefire between the United States and Iran after a wave of fresh strikes on the United Arab Emirates and Oman, along with reports of attacks on ships in the Strait of Hormuz, undermined confidence in the truce.

The drone and missile strikes, the first since a ceasefire halted fighting in early April, come after the Trump administration launched a wide-scale naval operation on Monday to “guide” stranded maritime vessels out of the vital waterway.

But fears over a return to war have driven another surge in oil prices, pushing them above $114 per barrel — levels not seen since the ceasefire nearly a month ago. Hundreds of cargo ships from dozens of countries remain stuck in the Gulf. And strikes in Dubai have raised concerns about further disruptions to international air travel at one of the world’s busiest airports.

Iran’s state-run news agency, IRNA, said the new U.S. operation was part of President Trump’s “delirium,” after the Islamic Revolutionary Guard Corps warned that passage through the strait required prior approval from Tehran.

“We warn that any foreign armed force, especially the invading American army, will be attacked if they attempt to approach and enter the Strait of Hormuz,” said Maj. Gen. Ali Abdollahi, according to a statement reported by the Iranian state-run Mehr News Agency on Monday.

The operation, which Trump over the weekend dubbed “Project Freedom,” is supported by 15,000 U.S. servicemen and 100 aircraft, according to U.S. Central Command. Their aim is to deny Tehran control over the strait, a narrow, 21-mile-wide passageway through which a fifth of global energy supplies flows.

On Monday, Trump vowed Iran’s forces will be “blown off the face of the Earth” if they attempt to disrupt Project Freedom.

“We have more weapons and ammunition at a much higher grade than we had before,” Trump was quoted as saying in an interview with Fox News.

“We have the best equipment. We have stuff all over the world. We have these bases all over the world. They’re all stocked up with equipment. We can use all of that stuff, and we will, if we need it.”

Iran blocked traffic through the strait soon after the United States and Israel launched their campaign on the country. Last month, days after a ceasefire between Washington and Tehran came into effect, the United States enforced its own naval blockade on Iranian ports in a bid to pressure Iran to make concessions in stalled negotiations.

On Monday, Central Command said in a statement that two American-flagged merchant ships were able to successfully transit the strait, while Central Command head Adm. Brad Cooper said the U.S. military sank six Iranian boats and intercepted missiles and drones targeting civilian vessels.

“We have defeated each and every one of those threats through the clinical application of defensive munitions,” he said.

“Project Freedom is a defensive operation, and we have deployed anti-ballistic missile destroyers,” he added. “Ships in the Gulf waters belong to 87 countries, and we urge ships to cross the strait.”

IRIB, Iran’s state-run broadcaster, quoted a senior Iranian military official who denied Cooper’s claim of sunk Iranian boats. The IRGC said in a statement on the messaging app Telegram that claims of commercial vessels or tankers traversing the strait were “baseless and completely false.”

Though Cooper did not clarify if the ceasefire between Washington and Tehran was now over, a raft of attacks throughout Monday spiked fears that the war would restart, spurring sharp price increases in already-jittery energy markets.

The UAE said a fire broke out and three Indian nationals were injured in the Fujairah Oil Industry Zone, a key export hub for the country, after what it described as an Iranian drone attack.

It also accused Iran of targeting a tanker linked to the country’s state oil company Abu Dhabi National Oil Company in the Strait of Hormuz, while the country’s defense ministry also reported four cruise missiles launched from Iran, saying that it intercepted three of them while the fourth fell in the sea.

“These attacks constitute a dangerous escalation and an unacceptable transgression,” said a statement from the UAE’s foreign ministry, adding that it “reserves its full and legitimate right to respond to these attacks.”

Elsewhere, two foreign workers were injured in an attack on a residential building in the Omani coastal province of Bukha, according to a statement from an unnamed security source quoted by the state-run Oman News Agency. Authorities were investigating the incident but did not elaborate on the perpetrator.

The U.K.’s Maritime Trade Operations Center reported on Monday that a commercial vessel was on fire off the coast of the UAE, while a South Korean bulk carrier ship said it suffered an explosion and a fire in its engine room and the cause was being investigated.

Bulos reported from Beirut, Wilner from Washington.

Iran claims its navy forced a US warship to turn back from the Strait of Hormuz as Washington denies any clash, amid rising tensions in the key waterway. The rival narratives come after US President Donald Trump announced Project Freedom, a mission he framed as a humanitarian effort to “free” stranded ships.

“I have all the cards,” posted the White House on its X account on Sunday, alongside an image of President Donald Trump holding playing cards from the Uno game, in a message appearing to signal Washington’s confidence in its ongoing war on Iran.

Uno is a card game in which the winner is the first to get rid of all their cards.

The post came after Trump announced on his Truth Social platform that the US military would begin guiding ships stranded around the Strait of Hormuz by the war on Monday, in a sign that the conflict could further escalate, despite the near-month-long fragile ceasefire. Tehran has been effectively blocking nearly all shipping from the Gulf for more than two months, after the US and Israel attacked Iran two months ago, disrupting global energy supplies.

“We have told these countries that we will guide their ships safely out of these restricted waterways, so that they can freely and ably get on with their business,” Trump said, dubbing the campaign “Project Freedom”. “They are merely neutral and innocent bystanders!”

The president added that US negotiators were engaged in “very positive discussions” with Tehran, which could lead to “something very positive” without further elaboration.

Iran, however, reacted by insisting that the security of the waterway was in the hands of its armed forces, and warned that “any safe passage and navigation in any situation” should be “carried out in coordination with the armed forces”.

On Monday, the Iranian Fars news agency reported that a US warship had been hit by two Iranian drones, the claim was denied by US Central Command.

So what leverage do the US and Iran hold over each other, and what happens next?

In response to Trump’s “I have all the cards” social media post, Iran’s Consulate General in Hyderabad, India, posted its own image on X.

“Yes, we have less cards,” Iran’s consulate in the Indian city of Hyderabad wrote on X, together with a photo of an Iranian military spokesperson holding four Uno cards compared to Trump’s five, pointing out that usually holding all the cards means you are losing, not winning, in the game of Uno.

In response to Trump’s “Project Freedom” declaration, Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that ships deemed to be in breach of its rules in the Strait of Hormuz “will be stopped by force”, while insisting there has been no change in how it manages traffic through the strategic waterway.

On Monday, it issued a new map of the Strait of Hormuz with boundaries extending further to the east than its previous one, and said any ship travelling between the two sides must coordinate with the IRGC first.

“There has been no change in the management process of the Strait of Hormuz,” spokesperson Sardar Mohebbi said, adding that vessels that comply with the “transit protocols issued by the IRGC Navy” will be “safe and secure”.

“Other maritime movements that are contrary to the declared principles of the IRGC Navy will face serious risks. Violating vessels will be stopped by force,” he said.

What leverage does the US have over Iran?

Sanctions

The United States’ most enduring source of leverage over Iran remains its sanctions regime, which was launched in 1979 when Ayatollah Ruhollah Khomeini declared Iran an Islamic Republic.

Successive US administrations over the past 47 years have hit Tehran with a series of financial restrictions targeting Iran’s banking, oil exports and access to international markets – the US says the sanctions are a response to Iran’s nuclear programme.

Sanctions have significantly constrained Iran’s economy, limiting government revenue and contributing to inflation and currency depreciation. Measures enforced through the US Treasury also deter other countries and companies from engaging with Iran, further strangling its economy.

The economic pressure has been central to US strategy towards Iran, particularly during its attempts to force Tehran back to negotiations over its nuclear programme, under both Democratic and Republican administrations.

Military power

Beyond economics, the US maintains overwhelming military superiority, especially air power. Aircraft carriers, long-range bombers and precision strike capabilities give Washington the ability to target Iranian infrastructure with relatively low risk to its own forces.

US bases across the Gulf, as well as military partnerships with regional allies – most notably Israel – reinforce this advantage.

American forces, together with the Israeli army, have killed more than 3,000 people, and struck thousands of sites across Iran in the current war, including Iran’s energy and nuclear sites.

Naval blockade

Since mid-April, the United States has enforced a widespread naval blockade of Iranian ports and ships. The operation began on April 13 after talks between Washington and Tehran collapsed, with US forces ordered to stop or divert vessels entering or leaving Iranian ports.

US forces have since intercepted or turned back dozens of ships, and seized a container ship, the Touska. On Monday, the US announced that its crew had been repatriated to Iran from Pakistan, where they were taken after their ship was captured in the Gulf of Oman last month.

According to Trump, the blockade is designed to choke Iran’s oil exports, its main revenue source.

US officials say the measures have severely disrupted Iran’s trade, which relies heavily on sea routes.

What leverage does Iran have?

Strait of Hormuz

The vital waterway is Iran’s most significant strategic asset, the narrow passage ships one-fifth of the world’s oil and liquefied natural gas (LNG) supplies in peacetime.

Tehran has effectively closed the strait since the war began on February 28, sending global oil and gas prices soaring and energy markets into turmoil. Iran has repeatedly demonstrated its ability to target shipping, seize vessels, or conduct military exercises, demonstrating its ability to close or restrict the strait.

The result is soaring energy prices globally, forcing many countries to implement severe austerity measures to soften the blow.

Last week in the US, the average price of a gallon (3.8 litres) of gasoline (petrol) rose to $4.30, according to the American Automobile Association (AAA), up from less than $3 before the war.

Surging energy costs have driven up inflation and deepened economic uncertainty in the US, compounding Trump’s political troubles amid overwhelming disapproval for the war amongst Americans.

Even if the US does begin escorting ships through safely – the threat from mines or Iranian strikes may be enough to prevent tankers from attempting to sail, experts say. Insurance companies are also unlikely to underwrite voyages.

Regional allies

Iran’s network of allied groups across the Middle East is another asset that Tehran relies on heavily. These include armed groups in Iraq and Syria, as well as Hezbollah in Lebanon and the Houthis in Yemen

Through these groups, Iran has exerted pressure indirectly, targeting US interests and allies without engaging in direct confrontation.

One critical threat Iran has previously made is for the Houthis to disrupt shipping in the Bab al-Mandeb, another vital maritime chokepoint linking the Red Sea to the Gulf of Aden.

The Houthis, an Iran-aligned group in Yemen, have previously targeted shipping in this area, most notably during Israel’s genocidal war on Gaza, further raising concerns about the security of global trade routes.

Roughly 4.2 billion barrels of crude oil and refined petroleum liquids flowed through the strait in 2014, accounting for about five percent of global supply.

Cheap drones and cluster bombs

While nowhere near the military capabilities of the US, Iran’s investment in missile and drone programmes has proven to be an effective means of deterrence. That is particularly through its ability to threaten regional US bases and impose significant costs on regional countries hosting American assets involved in military operations against Tehran.

While the US undoubtedly has a more sophisticated and powerful arsenal at its disposal, the interceptors it uses to combat Iranian drones cost around $4 million each, while Iran’s Shahed drones can be mass-produced at $20-50,000 each.

Furthermore, Iran’s ballistic missiles have proved capable of breaching Israel’s much-lauded “Iron Dome” defence system on several occasions. Iran has also dropped cluster bombs, which divide before they can be intercepted, making them much harder to stop.

So does the US really hold the most cards?

Michael Clarke, visiting professor at the Department of War Studies, King’s College London, said Trump’s overwhelming conventional military strength has failed to translate into strategic leverage on the ground.

“President Trump thinks he is a great poker player,” Clarke told Al Jazeera. “He thought America’s sheer destructive potential put all the ‘cards’ in his hand” when starting the war on Iran.

But Iranian forces have consistently disrupted US expectations through asymmetric tactics, he said.

“At every turn, the Iranians have come up with asymmetric tactics – vicious, reckless tactics – that have negated everything the Americans have tried to do,” Clarke noted, describing a pattern in which traditional US military superiority has been blunted by unconventional responses.

Despite significant American forces and assets in the region – including “no fewer than three US Carrier Strike Groups, two Marine Expeditionary Units, hundreds of combat aircraft and thousands of troops”, Clarke argued that Washington has struggled to find an effective use for its multi-billion-dollar resources at its disposal.

Moreover, he said, domestic pressure on Trump is growing. Trump “can’t find a way to use them [US forces] that will make any real difference to the current stalemate in the limited time he has before his own MAGA base concludes he has lost the game”.

Clarke also highlighted the willingness of Iran’s IRGC to escalate tensions. “Whatever this war might do to Iranian society, the IRGC is prepared to gamble with its own existence in the fight,” he added.

May 4 (UPI) — An oil tanker was struck late Sunday near the Strait of Hormuz, the second attack on a vessel in the Persian Gulf in about eight hours.

The United Kingdom Maritime Trade Operations said in a statement that it received a report of a tanker being hit by unknown projectiles as the vessel was about 78 nautical miles north of Fujairah, United Arab Emirates, near the northern tip of Oman’s Musandam Peninsula by the Strait of Hormuz.

The attack occurred at about 11:40 p.m. local time, it said, adding that all crew were safe and there was no environmental impact from the strike.

The tanker was not identified.

The oil tanker was struck a little more than eight hours after a bulk carrier was attacked by “multiple small craft” in the same region.

The UKMTO said the unidentified bulk carrier was attacked Sunday afternoon about 11 nautical miles west of Sirik, Iran. All crew were reported safe.

The agency is advising vessels to transit the Strait of Hormuz with caution.

The maritime security threat level in the strait remains critical as the United States is enforcing a blockade of Iranian ports in response to Iran restricting which vessels can transit the strait.

The attacks come as U.S. President Donald Trump on Sunday vowed to “free” cargo ships trapped in the Persian Gulf since the U.S.-Israel war against Iran began on Feb. 28.

In his Truth Social post, Trump said Project Freedom would begin Monday with the goal of helping ships sailing under neutral flags navigate the strait. Few specifics on how the operation will work were given.

More than two dozen vessels have reportedly been attacked in the strait since the war began.

Published on
04/05/2026 – 7:15 GMT+2

Crude prices were slightly lower ahead of European markets opening as traders digested comments from US President Donald Trump that Washington would help ships leave the Strait of Hormuz from today. Iran, however, has rejected the plan.

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At the time of writing, the price of a barrel of US benchmark crude (WTI) was down 0.28% to $101.65 a barrel, while Brent crude, the international standard, edged down 0.06% to $108.10 a barrel.

Much hinges now on progress towards ending the war with Iran and unlocking the bottleneck through the Strait of Hormuz.

The oil market “remains the fulcrum, with hundreds of tankers, bulk carriers, and cargo ships still stranded across the Gulf, idling as storage constraints force producers to shut … production simply because there is nowhere left to store it,” Stephen Innes of SPI Asset Management said in a commentary note.

Trump said what he called “Project Freedom” would begin Monday morning in the Middle East. The US Central Command said it would involve guided-missile destroyers, more than 100 aircraft and 15,000 service members, but the Pentagon did not immediately answer questions about how they would be deployed.

Asia-Pacific and US markets

In Asian share trading overnight, Hong Kong’s Hang Seng jumped 1.4% to 26,135.47. Markets in mainland China and Japan were closed for “Golden Week” holidays. In Australia, the S&P/ASX 200 slipped 0.3% to 8,704.70.

Strong buying of tech stocks pushed shares in South Korea sharply higher, as the Kospi gained 3.8%. Taiwan’s Taiex surged 4.2%.

On Friday, the S&P 500 climbed 0.3% to another all-time high of 7,230.12, closing out a fifth straight winning week. The Dow Jones Industrial Average dipped 0.3% to 49,499.27, and the Nasdaq composite added 0.9% to a record close of 25,114.44.

Apple led the way after delivering better profit than expected. Because it’s one of Wall Street’s biggest stocks in terms of overall size, its rally of 3.3% was by far the strongest force lifting the S&P 500.

Stock prices generally follow the path of corporate profits over the long term, and US companies have been exceeding expectations for earnings in the first three months of 2026. That’s even with the war with Iran and high oil prices souring confidence for many US households.

Strong earnings boost S&P 500

A little more than a quarter of the companies in the S&P 500 have reported already, and 84% of them have topped analysts’ estimates, according to FactSet. The index is on track to deliver roughly 15% growth in profit from a year earlier.

The main uncertainty for the global economy is where oil prices are heading because of the Iran war. Oil prices moved higher last week on worries that the war might keep the Strait of Hormuz closed for a long time, trapping oil tankers pent up in the Persian Gulf instead of delivering crude to customers worldwide.

Brent was selling for a little more than $70 per barrel before the war began, and soaring prices helped the two biggest U.S. oil companies report stronger profit for the latest quarter than analysts expected. But stock prices nevertheless fell for both Exxon Mobil, 1%, and Chevron, 1.4%, as oil prices regressed Friday and each reported drops in net income from a year earlier.

In other dealings early Monday, the dollar rose to 157.18 Japanese yen from 156.80 yen. The euro fell to $1.1724 from $1.1746.