Hours after US President Trump announced a new plan aimed at breaking the deadlock over control of the Strait of Hormuz, both the United States and Iran launched attacks, plunging the fragile ceasefire agreement between the two nations into crisis on Monday. In response to the new US initiative involving the "guidance" of vessels through the strait's passage, Iran stated it fired "warning shots" near a US Navy ship. A semi-official Iranian news agency even claimed that an Iranian missile struck a US frigate. According to a US Navy Rear Admiral, American forces subsequently retaliated, destroying at least six Iranian small boats. US Central Command added that two vessels flying the US flag had successfully transited the strait. Simultaneously, the United Arab Emirates reported coming under attack from Iran and warned its citizens to "immediately seek shelter in the nearest safe building." A South Korean cargo ship was also suspected to have been attacked by Iran. Driven by fears of conflict stemming from these rapid developments, crude oil prices experienced significant volatility on Monday.
On Monday, Trump confirmed to Fox News that Iran had resumed attacks, but he also warned that any attempt by Iran to attack US ships would result in Iran being "wiped off the face of the Earth." On Sunday afternoon, Trump announced a plan ordering US forces to "guide" commercial ships not directly involved in the conflict through the Strait of Hormuz, describing it as a humanitarian mission to "ensure these vessels can operate freely and smoothly." Trump named the mission "Operation Freedom" and declared it effective from Monday. This move directly challenges Iran's blockade of the critical waterway, through which approximately one-fifth of the world's oil shipments passed before the war. Trump had previously imposed a blockade on Iranian oil exports and, in a lengthy social media post on Sunday, added that if Iran obstructs US efforts to guide other vessels, "regrettably, the US will be forced to respond with military force."
The Trump administration quickly followed up on Monday, stating that the measures were already showing initial results. US Central Command said a Navy missile destroyer had been deployed to the Persian Gulf and characterized the successful passage of the two US commercial ships as a "first step." However, with Iran formally resuming attacks, it remains unclear how much tangible change Trump's initiative can bring for shipping companies trapped in the Persian Gulf and fraught with anxiety. Senior US administration officials subsequently distinguished Trump's new plan to "guide" vessels from previous operations involving direct "escorts" through the strait. According to Axios, the plan focuses more on mine detection, plotting the safest routes, and providing this information to shipping companies. This move promptly drew threats from Iranian officials. The chairman of the Iranian parliament's National Security Committee called Trump's post "fantastical" and warned on social media that any new US action "will be considered a violation of the ceasefire agreement." Also on Monday, a senior Iranian security official was reportedly quoted as saying that Iran controls the waterway and warning that any foreign vessel—"especially aggressive US warships"—would be attacked.
Market observers noted that there is still no clear path towards de-escalation in the Iran conflict. "Do not over-interpret, nor wishfully think," warned Terry Haines of Pangaea Policy Advisory in a client note, stating that the risk of a new conflict is extremely high and could trigger market panic. Raymond James Financial also mentioned in a report: "Throughout the weekend, the prospects for ending the US-Iran war remained unclear."
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