U.S.-Iran Conflict Resurfaces, Threatening Strait of Hormuz

12.07.2026 · By Bernal Fintech Markets Desk

U.S. and Iran have exchanged fresh strikes in the Strait of Hormuz, reversing a tentative ceasefire and reigniting fears of disruptions to global energy flows. The conflict, which had seen a temporary de-escalation, has now escalated as both sides launch retaliatory attacks following an Iranian strike on a Cyprus-flagged vessel. The situation has raised concerns about the stability of one of the world’s most critical oil shipping routes.

The Islamic Revolutionary Guard Corps (IRGC) announced the closure of the Strait of Hormuz on Sunday, following an intense aerial exchange with U.S. forces. Despite this, the U.S. stated that some ships were still passing through the waterway. However, reports indicate that commercial traffic has significantly declined, with only a few tankers observed near the strait. This development has led to renewed volatility in energy markets, with oil and gasoline prices rebounding from multi-month lows as traders reassess the risks to physical energy flows.

Escalation of Hostilities

The latest hostilities began after an Iranian attack on a containership in the Strait of Hormuz, prompting the U.S. to launch retaliatory strikes. The U.S. military confirmed that the attacks were in response to the IRGC’s actions, which were seen as a direct challenge to the fragile ceasefire agreement that had been in place since last month. The renewed conflict has raised questions about the viability of any broader peace deal between the two nations.

Iran’s closure of the strait has been widely interpreted as a strategic move to pressure the U.S. and its allies, as well as to signal its resolve in the region. The closure also comes amid ongoing diplomatic efforts to salvage the ceasefire, with mediators attempting to broker a resolution despite the intensifying attacks. However, the recent escalation has made such efforts increasingly difficult.

What it means for markets

The renewed conflict in the Strait of Hormuz has immediate implications for global energy markets, with oil prices rising as traders factor in the potential for supply disruptions. The situation also adds to the uncertainty surrounding the broader geopolitical landscape, which could impact investor sentiment and market volatility in the coming weeks.