Houthi Blockade

President Donald Trump announced that the United States will begin using frozen Iranian funds to compensate for damage to ships and cargo attacked in the Persian Gulf and surrounding waters. The declaration, posted on Truth Social on 23 July 2026, stated that all damage to vessels and related assets would be reimbursed from Iranian money under U.S. control.

The announcement came as Brent crude surpassed $100 a barrel for the first time since May. Tensions have surged since a ceasefire between Washington and Tehran collapsed in early July after Iranian forces fired on commercial vessels in the Strait of Hormuz. The U.S. military has struck targets in Iran for 13 consecutive nights to deter further attacks on shipping.

Iran-backed Houthi rebels also struck two Saudi tankers in the Red Sea on 23 July and declared a naval blockade, according to reports. Hostilities between Iran and the U.S. resumed on 7 July, marking a sharp escalation in the regional conflict.

At least nine oil tankers have reversed course near Yemen after Houthi rebels declared a maritime embargo against Saudi Arabia, with the vessels carrying a combined 6.2 million barrels of Saudi crude among them.

The EU's naval force Aspides advised merchant vessels linked to Israeli, US or Saudi interests to avoid the Red Sea and Gulf of Aden. Houthi forces also claimed missile and drone strikes on two Saudi tankers, the Encelia and Layla, while a Saudi-owned vessel caught fire after being hit in the Red Sea.

President Donald Trump warned that the United States would "take care of" the Houthis if they enforce the port blockade, suggesting Washington could be drawn into the conflict. The embargo threatens Saudi Arabia's Red Sea export corridor, which has handled 4.5 million barrels daily since the Strait of Hormuz closure.

President Donald Trump threatened to bomb and destroy a bridge or power plant in Iran — including sites in or near Tehran — for every Iranian attack on a vessel in the Strait of Hormuz, escalating his rhetoric after warning a day earlier of possible strikes on the Pickaxe Mountain nuclear site near Natanz.

The ultimatum followed a night of intensified exchanges: US Central Command said it struck Iranian military operations centres, drone storage facilities, air hangars and logistics infrastructure, while air defences were activated over Tehran and explosions were heard in Bushehr. Iran's Revolutionary Guard claimed attacks on US targets in Jordan, and Iran's military said it launched drone strikes on a US base in western Kuwait, with retaliatory hits also reported in Bahrain and Qatar. The US military death toll has risen to 18 since hostilities began on 28 February.

Defence Secretary Pete Hegseth put the conflict's cost at $37.5 billion and requested an additional $67 billion from Congress. Iran-backed Houthis in Yemen announced a blockade of Saudi oil shipments through the Red Sea. US intelligence assessments indicate 11 days of renewed strikes have not altered Iranian behaviour, and Iran's UN ambassador called US attacks on civilian infrastructure war crimes, drawing concern from UN Secretary-General António Guterres.

Oil prices surged nearly 4 percent on Wednesday after U.S. Central Command carried out its 11th consecutive night of strikes against Iran, escalating a conflict that has redrawn energy-market risk premiums this week.

Brent crude futures for September delivery rose to $91.96 a barrel, while WTI climbed to $87.46, marking the first time in over a month that Brent closed above $90. Supply disruptions compounded the rally: Russia's CPC terminal stopped receiving Kazakh oil following tanker attacks, and Lukoil declared force majeure on an Iraqi oilfield it operates.

Secretary of State Marco Rubio said the Strait of Hormuz remains a sticking point in broader tensions. Money markets are now pricing a 69 percent chance of a Federal Reserve rate hike in September as energy-driven inflation fears mount.