US strikes Iran for third night as Gulf tanker attacks lift oil

The United States struck Iranian targets for a third successive night on orders from President Donald Trump, while Iran attacked Gulf targets, including two Emirati oil tankers in the Strait of Hormuz, according to U.S. and Gulf officials. Brent crude rose 2% to $85 a barrel on Tuesday and West Texas Intermediate gained 2.3% to $80 as traders assessed renewed risks to a waterway that carried about one-fifth of global oil and gas before the conflict.

U.S. Central Command said the latest strikes were intended to keep “imposing a heavy cost on Iranian forces” and reduce Tehran’s ability to threaten shipping in the Strait of Hormuz. The operation followed Trump’s order to reinstate a blockade on Iran in the strait at 4 p.m. ET on Tuesday, as well as his proposal for a 20% charge on vessels using the energy corridor.

Iran responded with attacks on Gulf states, including the United Arab Emirates and Bahrain, on Tuesday morning. The UAE Defense Ministry said two Iranian cruise missiles targeted the UAE-flagged tankers Mombasa and AI Bahiyah in the strait’s southern lane, within Omani territorial waters.

The ministry said one Indian crew member aboard the Mombasa was killed and eight others were injured. Fires on the vessels caused material damage to both tankers, according to the ministry. It said the UAE would remain at the highest level of readiness and would take necessary measures against attempts to threaten the country’s security and stability.

Bahrain, which hosts the U.S. Navy’s Fifth Fleet, also faced renewed attack, the Associated Press reported. Missile-warning sirens sounded early Tuesday as Iran retaliated for the American strikes, according to the AP.

Shipping slows through Hormuz

Commercial traffic through the Strait of Hormuz has weakened as security concerns increase. Kpler said confirmed crossings fell by about 52% week on week between July 10 and July 12, with vessels shifting toward what it described as more defensive routing patterns. Kpler said that included greater use of Iranian and dark routes, while ships avoided Omani corridors and routes authorized by the International Maritime Organization.

Lloyd’s List Intelligence said war risk premiums for Hormuz voyages were expected to rise sharply as markets responded to the escalation. War risk premiums are additional insurance charges linked to conflict exposure in designated areas, and higher charges can affect the economics of a voyage for shipowners and charterers. Lloyd’s List Intelligence said some owners and charterers had paused decisions on whether to pass through the strait.

The latest fighting has undone the ceasefire that followed an interim U.S.-Iran agreement signed last month. That arrangement was designed to reopen the Strait of Hormuz and suspend hostilities for 60 days while negotiations proceeded.

The renewed disruption has placed energy markets back under pressure because Hormuz is a central transit route for seaborne hydrocarbons from the Gulf. The price moves in Brent and WTI reflected uncertainty over whether commercial vessels can continue to move through the channel at normal rates while U.S.-Iran hostilities and retaliatory strikes continue.

This story draws on original reporting from CNBC.