A tanker about 11 nautical miles northeast of Oman was struck by an "unknown projectile which has caused damage to the engine room," the British Navy-backed UKMTO said on Saturday. The vessel is now disabled and unable to maneuver, and local coast guard authorities have been alerted. "There are no reported casualties or environmental impact," the UKMTO said.
The escalation comes amid U.S. news reports that the President is weighing a new wave of military action against Tehran that could begin within days. This is happening as hopes for a negotiated settlement to the war, which started on Feb. 28, fade and energy prices rise.
The truce that followed the U.S.-Iran memorandum of understanding on June 17 has largely fallen apart. The two sides remain stuck on key issues, including Iran's nuclear program and the question of who controls the Strait of Hormuz, which carried roughly one-fifth of the world's oil before the war erupted.
On July 13, Washington reimposed a naval blockade that barred Iranian vessels from entering or leaving Iranian ports. Over the past week, American forces finished a "heavy wave" of bombardments aimed at dozens of Islamic Revolutionary Guard Corps sites. Iran retaliated by targeting American bases in Kuwait and Bahrain.
Kuwait reported that its air defenses engaged hostile drones sent by Tehran. On Thursday, Egypt said a drone struck two ships at the Egyptian Mediterranean port of Damietta and sparked a fire. No group immediately claimed the strike, which was the first inside Egypt since the conflict began and another sign that it is spreading.
The June 17 memorandum of understanding yielded only a brief truce; once it collapsed, the two sides were still unable to resolve Iran's nuclear activities or the question of who would oversee vessel passage in the Strait of Hormuz.
Get the market news that matters in a five-minute read with Market Briefs, our free daily newsletter
Both waterways are central to global oil flows. Hormuz carried roughly one-fifth of the world's oil before the war, while Bab el-Mandeb sits at the Red Sea's southern gateway. Any disruption there would add to worries about supply.
Friday brought gains of just over 1% for oil futures. West Texas Intermediate settled at $84.67 a barrel, while global benchmark Brent closed at $90.12. Still, both contracts ended the week down more than 5% after a Monday selloff driven by hopes that Middle East tensions would ease.
After Houthi strikes in Yemen and Friday's drone attack at Egypt's Damietta port, concern is growing that the Bab el-Mandeb - the Red Sea's southern gateway - could become another pressure point in the dispute between Tehran and Washington over Hormuz.
Unnamed American officials told The Wall Street Journal on Friday that the President could order a new military action against Tehran within days. Those officials said Trump might still call off the operation if diplomatic talks show progress.
Axios, citing a U.S. official, said Trump is weighing possible strikes on Iranian energy infrastructure in the coming days.
Speaking at the Camp David presidential retreat during a televised cabinet session, Trump said, according to The Associated Press: "We will be hitting them very hard. And you know at some point, they're going to say, 'We just can't take it anymore.'"
Iran's Supreme National Security Council secretary, Mohammad Bagher Zolghadr, warned that the U.S. naval blockade and warmongering would tighten Iran's grip on maritime passages. "The continuation of the naval blockade and warmongering by the U.S. regime will not only lock the Strait of Hormuz tighter, but will also shut down other straits and chokepoints," he was quoted as saying by WANA. "The price for this will be paid by the global economy, the energy market, and American voters."
With the Strait of Hormuz and Bab el-Mandeb both in play, the market faces a widening risk premium on oil. Any serious disruption to tanker traffic through those routes could push energy prices sharply higher, while a renewed ceasefire or delay in U.S. strikes could trigger the opposite reaction. Traders are likely to remain sensitive to headlines from Washington and Tehran in the coming days.
Join Market Briefs, our free daily newsletter, for a quick daily rundown of the markets
