US and Iran exchange fire for the first time in more than a month
Oil prices rise after American military hits island in Strait of Hormuz and Tehran retaliates with attack on Jordan
The US military has struck two Iranian rocket launchers on an island in the Strait of Hormuz, the first American attack on Tehran’s forces in more than a month.
Iran swiftly retaliated by firing missiles at Jordan.
“Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets with sea mines into [the] Strait of Hormuz”, prompting American forces to strike two launchers on Larak Island, said Captain Tim Hawkins, spokesperson for US Central Command, on Sunday. Centcom oversees Washington’s military operations in the Middle East.
Tehran lobbed “a few missiles” at Jordan in retaliation but they were intercepted by American forces, according to a person familiar with the matter.
The attacks caused oil prices to rise above $90 a barrel, as traders considered whether the resumption of hostilities posed a renewed risk to flows from the Middle East.
“Tonight’s renewed strikes on Iran not only underscore the fragility of de-escalation, but the adamancy of the IRGC to complicate free transit in the Strait of Hormuz,” said Michael Alfaro, chief investment officer of Gallo Partners, an energy and industrials-focused hedge fund.
“This situation feels like an endless powder keg which continues to embed a premium in prices,” he said.
The US attack appeared smaller and more focused than its last known strikes on the Islamic republic on July 29, when “dozens” of targets were hit in a two-hour wave of bombings.
Last month featured about three weeks of tit-for-tat strikes between the US and Iran that threatened a return to full-blown war, but failed to fully reopen the Strait of Hormuz or bring down the Islamic regime.
Since then, the US has shifted to prioritising economic warfare to pressure Tehran into capitulation. On Monday, US Treasury secretary Scott Bessent said Washington was expanding secondary sanctions on Iran, threatening measures that could “blow up” the global financial system.
However, Bessent has stopped short of the “economic D-Day” he had threatened against Iran. So far, Washington has only revoked US financial access to an Egyptian bank’s branches in the United Arab Emirates, and has not provided a deadline for Tehran’s trading partners to comply with its pressure campaign.
The limited first move from Bessent showed Washington was hesitant to go after bigger financial targets that help finance the Iranian regime, including major banks and state-backed entities in China, out of fear of further destabilising the global economy and financial markets.
Bessent told the Associated Press on Sunday that the US would announce an action against another bank in the coming days.
The six-month war between the US and Iran has become a stalemate, and talks between Washington and Tehran have collapsed.
President Donald Trump has struggled to end the conflict, which has stoked inflation and is unpopular with American voters ahead of crucial midterm elections in November.
Iran’s reformist President Masoud Pezeshkian, who left Tehran early on Monday to attend the Shanghai Cooperation Organisation security forum in Kyrgyzstan, said his country was “not seeking war”.
He added: “However, in the face of any aggression, we will never remain passive and we will give a firm response to the aggressors.”
The IRGC said it used missiles and drones to carry out a retaliatory strike on Sunday against technical and maintenance infrastructure as well as fighter jet positions at two US air bases in Jordan. They also claimed to have shot down an American MQ-9 drone over the Strait of Hormuz.
The group said the US will not be able to “weaken Iran’s control over the Strait of Hormuz through aggression” and threatened to “forcefully respond” to every strike. The IRGC also said the US strikes killed military personnel and civilians.