U.S. launches strikes against Iran for a third night, while Tehran targets Gulf neighbors

• Two UAE tankers (Mombasa and AI Bahiyah) were struck in Omani territorial waters, killing one Indian crew member and injuring eight others, while Bahrain sounded missile-alert sirens as Iran retaliated against American strikes.
• Traffic through the Strait of Hormuz declined week-over-week from July 10-12, with shipowners pausing transit decisions and war risk premiums expected to increase sharply according to Lloyd's List Intelligence.
• The escalation unraveled last month's interim U.S.-Iran ceasefire agreement and pushed Brent crude up 2% to $85 per barrel and WTI up 2.3% to $80 amid uncertainty over the vital shipping route.

Summary

The U.S. conducted strikes against Iran for a third consecutive night under President Trump's orders, while Tehran retaliated with attacks on Gulf neighbors, escalating tensions in the strategically critical Strait of Hormuz region.

Key Developments:

• Iranian missiles struck two UAE oil tankers (Mombasa and Al Bahiyah) in the Strait of Hormuz within Omani territorial waters, killing one Indian crew member and injuring eight others
• Bahrain, home to the U.S. Navy's Fifth Fleet, experienced missile attacks triggering air-raid sirens
• Trump ordered a blockade reinstatement on Iran in the strait, effective Tuesday at 4 p.m. ET
• U.S. Central Command stated strikes will continue to degrade Tehran's capacity to attack shipping

Market Impact:

• Brent crude rose 2% to $85/barrel; WTI increased 2.3% to $80/barrel
• War risk premiums for Strait of Hormuz shipping expected to increase sharply
• Shipowners and charterers have paused transit decisions through the waterway
• Traffic through Hormuz declined week-over-week (July 10-12), with shipping adopting "defensive routing patterns"

Strategic Significance:

The Strait of Hormuz typically carries one-fifth of global oil and gas supplies, making this escalation critical for energy markets. The conflict has collapsed a ceasefire from an interim U.S.-Iran agreement signed last month, which aimed to reopen the strait and establish a 60-day negotiation period.

Lloyd's List Intelligence warns of sharply rising insurance costs as uncertainty mounts over commercial shipping viability through this crucial chokepoint.