The Strait of Hormuz, a vital artery for global trade and commerce, has been abruptly shut down by Iran amidst an intensifying standoff with the United States. The Islamic Revolutionary Guard Corps declared the closure on Sunday morning, citing "US interference in this region" as the reason for suspending all shipping activity until further notice.
The crisis unfolded over a weekend marked by high-stakes military exchanges between the two nations, sparked by an alleged unauthorised passage of a vessel through the strait. Iran's navy command claimed to have struck a ship traversing the waterway without permission, which lies between Iran and Oman. However, US Central Command (Centcom) countered that Iran had "blatantly attacked" a Cyprus-flagged container ship in the strait, confirming a missing crew member.
US retaliation against Iranian targets followed swiftly, with Centcom launching a series of strikes against at least 140 locations within the country, including missile and drone sites. The US military justified its actions by pointing to Iran's failure to adhere to a Memorandum of Understanding (MoU) following earlier attacks on commercial vessels. "The United States is imposing a heavy cost by degrading Iran's ability to attack civilian mariners and commercial ships freely transiting the strait," Centcom stated.
Iran has since escalated its military actions, reportedly launching missile and drone strikes against several neighbouring Gulf states on Sunday morning. This includes Jordan, Bahrain, Qatar, Oman, and the UAE, each of which reported recent attacks in a coordinated assault.
The Iranian chief negotiator, Mohammad Bagher Ghalibaf, issued a stern warning to Washington, asserting that it would "pay the price" for allegedly violating the agreed MoU. Posting on X alongside an image of the MoU, Ghalibaf stated, "The era of one-sided deals is over. We told you: keep your word or pay the price. Reality is knocking."
The economic fallout from this latest escalation has been significant, particularly for the UK. Last Wednesday's US declaration that a previous ceasefire was "over" sent UK borrowing costs surging, with the yield on ten-year gilts increasing by 11 basis points to 4.96 per cent following the initial US strikes on Iran.