Local Markets Brace for Impact as US-Iran Tensions Explode with Fresh Strikes, Strait of Hormuz Closure
The U.S. launched fresh strikes on Iran in retaliation for an attack on a vessel in the Strait of Hormuz, prompting Iranian counter-attacks on American interests in the Gulf. Tensions escalate further with both nations accusing each other of violating their MoU, and Iran's Supreme Leader vowing vengeance for his father's death.
The United States launched fresh strikes on Iran on an early Sunday, stating that the attack was a direct response to an Iranian assault on the M/V GFS Galaxy, a Cyprus-flagged container ship, while it was transiting the Strait of Hormuz. U.S. Central Command (CENTCOM) confirmed that its forces initiated the third round of strikes this week after Islamic Revolutionary Guard Corps (IRGC) forces blatantly attacked the vessel. The attack on the M/V GFS Galaxy resulted in a civilian crew member going missing, an onboard fire, and significant engine room damage, rendering the ship unable to continue its journey.
Iran confirmed the attacks, with local news agency IRNA quoting an Iranian official who reported that US forces attacked five cities in the Bushehr province, including Asaluyeh, Dir, Bushehr, Dashti, and Tangestan. In swift retaliation, Iran carried out its own attacks, targeting American interests across Gulf countries such as Qatar, Bahrain, Kuwait, Oman, and Jordan. Officials in Qatar reported at least three people were injured by debris from intercepted missiles during these retaliatory actions.
Both Iran and the U.S. have accused each other of violating the Memorandum of Understanding (MoU) that exists between them. The U.S. alleges that Iran has been attacking ships passing through the Strait of Hormuz. Conversely, Iran accuses the U.S. of attempting to establish a corridor within the Strait where ships can pass without Iranian approval, asserting that the MoU explicitly requires Iran's approval for the free passage of ships through the critical waterway.
The current escalation follows remarks by U.S. President Donald Trump, who had earlier declared the ceasefire between the two countries to be over. Last week, President Trump announced CENTCOM's plans to strike Iran approximately 24 hours before the attack, and he issued a warning that the U.S. could denuclearize Iran without a formal deal. The strikes launched on Sunday appear to be the heaviest since the MoU was signed in mid-June.
Prior to these recent events, US strikes in the Kerman province had wounded at least two people, targeting a communication tower in Southern Iran. CENTCOM had also disclosed that its forces hit 140 Iranian military targets on Saturday, occurring after the IRGC announced the closure of the Strait of Hormuz “until further notice.”
Meanwhile, Iran’s Supreme Leader, Ayatollah Mojtaba Khamenei, has publicly pledged to avenge his father, Ali Khamenei, who was killed during a joint US-Israel attack in February. In his first public message since the funeral ceremony for his predecessor commenced a week ago, Mr. Khamenei stated that vengeance was “the demand of the nation” and “must certainly” take place. Al Jazeera reported his statement: “Revenge is the will of our nation. We pledge to avenge the blood of the martyred leader and all the martyrs of these two wars from the criminal and disgraced killers.”