U.S. strikes 140 Iranian targets as Hormuz closure deepens conflict

Iran's fourth closure of the Strait of Hormuz since February threatens to upend global energy markets and push the Federal Reserve toward a more hawkish stance.

The U.S. military struck approximately 140 Iranian targets Sunday after Iran attacked a commercial vessel in the Strait of Hormuz, deepening a standoff that pushed spot gold down 0.9% to $4,084.80 an ounce in early Asian trade.

"The renewed strikes raise the prospect of the Federal Reserve keeping interest rates higher for longer to combat stubbornly high inflation," ANZ Research analysts said in a note.

U.S. Central Command said precision munitions from fighter jets, drones and naval vessels hit missile and drone sites, naval capabilities, ammunition storage facilities, communication networks and coastal surveillance locations across southern Iranian provinces. Iran's Islamic Revolutionary Guard Corps responded by striking a second vessel in the strait and targeting U.S. facilities in Qatar, Jordan and Kuwait, while air defense systems activated across the United Arab Emirates and Bahrain. One civilian crew member remains missing after the crew of the Cyprus-flagged container ship MV GFS Galaxy abandoned the vessel by lifeboat.

The escalation threatens to collapse the June memorandum of understanding between Washington and Tehran, with President Donald Trump declaring the ceasefire "over" this week. The Treasury Department's General License X1, which allows Iran to sell oil on the open market, expires July 17 — five days from now — potentially cutting off the export revenue that has given Tehran room to negotiate.

The Strait of Hormuz handles about 21% of global oil trade, making its repeated closure the largest supply disruption in the history of the global oil market, according to the International Energy Agency. War-risk insurance premiums for vessels transiting the waterway have surged to approximately 5% of hull value, up from 0.125% before the conflict began Feb. 28, according to Neil Roberts, head of marine and aviation at the Lloyd's Market Association. Insuring a tanker worth $100 million for a single transit now costs roughly $5 million before cargo and liability coverage.

Major container carriers including Maersk, CMA CGM and Hapag-Lloyd have maintained diversions around Africa's Cape of Good Hope since February, adding about 3,800 nautical miles and 10 to 14 days per voyage. Industry estimates put the additional cost at $40 million to $50 million per week across the sector in combined fuel, insurance and operating expenses. Container spot rates have risen roughly 150% since the conflict began.

The last time Iran closed the strait in March, West Texas Intermediate crude surged above $120 a barrel within 72 hours while the S&P 500 fell 4.2% over the following two weeks as energy costs rippled through supply chains. Each subsequent closure has drawn a sharper military response — the U.S. has now struck more than 300 Iranian targets over the past seven days, according to CENTCOM figures.

The legal dispute at the heart of the crisis remains unresolved. Iran, which has not ratified the U.N. Convention on the Law of the Sea, insists vessels must transit routes it designates through its territorial waters. The U.S. and most maritime nations recognize a separate corridor along the Omani side of the strait under the transit-passage doctrine, which bars coastal states from suspending or redirecting navigation through international straits.

Oman has proposed fully reopening both shipping lanes through the strait, with the southern route through Omani waters restored without prior approval requirements. Iran's delegation took the proposal back to Tehran for internal discussions Saturday — hours before the IRGC struck the GFS Galaxy. Mediators are arranging a call among Iran, the U.S., Qatar and Pakistan to work toward de-escalation, according to Oman's foreign ministry.

For markets, the path forward hinges on whether the July 17 license deadline passes without extension. If it does, Iran loses the oil revenue that has funded its negotiating position. If it is extended without a Hormuz resolution, the cycle of attack and retaliation that has repeated four times since February is likely to continue.

This article is for informational purposes only and does not constitute investment advice.