EU warns airlines off 3 nations as US-Iran truce collapses

The European Union Aviation Safety Agency advised airlines to avoid the airspace of Iran, Iraq and Lebanon through Aug. 31, as the US-Iran ceasefire collapsed and the two sides exchanged fresh military strikes that sent Brent crude above $78 a barrel.

"The ongoing high level of tensions and the potential for further military action make these airspaces unsafe for civilian aviation," EASA said in a bulletin valid until the end of August. Should the existing truce break down entirely, Iranian airspace was likely to face "imminent threats," the agency added.

The advisory replaced an earlier warning that urged caution over Israel, Bahrain, Kuwait, Jordan, Qatar, Oman, the UAE and Saudi Arabia. EASA withdrew that bulletin without immediately issuing a replacement for those nations. The shift effectively removes a regulatory barrier that had kept many European carriers from resuming flights to Israel since the war began in February.

President Donald Trump declared the US-Iran memorandum of understanding "over" during a NATO summit in Ankara on Wednesday, calling Tehran's leadership "scum" and warning: "We're going to hit them hard." The Pentagon said it was launching fresh strikes on Iran to keep the Strait of Hormuz open after Iranian forces attacked three commercial ships transiting the waterway. Iran's Revolutionary Guards said they had destroyed 85 US military facilities in Bahrain and Kuwait and downed an MQ-9 drone in retaliation for earlier US strikes on about 90 Iranian military targets.

Oil and markets

Brent crude rose 5% to more than $78 a barrel on Wednesday, the highest since the US and Iran agreed a ceasefire while negotiating an end to the war last month. The previous peak of $120 a barrel in late April — after the war began with US-Israeli airstrikes on Iran on Feb. 28 — underscores the scale of supply risk still embedded in the region. The Strait of Hormuz handles about a fifth of global oil supplies, and ship-tracking data showed at least four oil and gas tankers have turned back from attempting to transit the waterway.

Nearly 6,000 seafarers remain stranded in the strait, according to Arsenio Dominguez, secretary general of the International Maritime Organization, who called for "maximum restraint and de-escalation." Oil markets had stabilized after the June 17 memorandum, with Brent trading in a $68-$72 range for most of the past three weeks.

Regional fallout

Qatar's interior ministry reported air raid alerts across the country Wednesday, urging citizens to remain calm and move to the nearest safe location. Kuwait's armed forces said they intercepted two ballistic missiles and 13 drones that breached Kuwaiti airspace at dawn, with no casualties reported. Bahrain also activated its air defense systems.

Iran's Revolutionary Guards warned they would expand their retaliatory range to other US bases in the Middle East if American aggression continued. A senior adviser to Supreme Leader Ayatollah Mojtaba Khamenei said Tehran would soon launch a "massive attack" on US bases in the region. The US struck two railway bridges in northern Iran on Wednesday, the first attacks on Iranian infrastructure since the ceasefire, according to a US official cited by Axios.

The last time the US and Iran exchanged direct strikes at this scale was in the opening weeks of the war in March, when Brent surged 30% in 10 trading days and the S&P 500 fell 8%. The current escalation has yet to trigger a comparable equity selloff, but defense sector stocks have gained across European and US exchanges.

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