A likely US strike struck the central Iranian city of Isfahan early Tuesday, producing a large fireball visible for miles, while Iranian forces struck a fully loaded Kuwaiti oil tanker in the Persian Gulf, officials said. The exchanges mark a sharp escalation in the monthlong conflict between Iran and a US‑Israel coalition and have intensified global market and security concerns.
President Donald Trump posted video of the Isfahan explosions, which came after earlier US strikes in June on multiple Iranian sites. Isfahan is among locations US officials have targeted because some facilities there are believed to store or conceal highly enriched uranium, according to intelligence assessments.
Iran has meanwhile exerted tight control over transits through the Strait of Hormuz, disrupting one of the world’s most important energy routes. The chokehold and repeated attacks on commercial shipping have pushed oil prices sharply higher and unsettled markets worldwide.
Economic and market impact
– US retail gasoline prices climbed above an average of USD 4 per gallon, the first time since 2022, as global fuel costs rose amid the conflict.
– Brent crude hovered near USD 107 a barrel, more than 45 percent higher since the flare-up began on February 28, and was poised for a record monthly gain.
– European equities, which had enjoyed months of gains, looked set to end an eight‑month winning streak as investors weighed the conflict’s risks to supply and growth.
– Asian and Chinese markets suffered steep losses, with China and Hong Kong stocks on track for their worst month in over two years.
– Bond markets faced pressure as inflation concerns and expectations for central bank policy shifts rose, while the US dollar strengthened.
Regional and diplomatic developments
– China reported that three of its commercial vessels recently transited the Strait of Hormuz, thanking parties that assisted safe passage.
– Pakistan and China plan to discuss the Iran situation during an upcoming visit by the Pakistani foreign minister, reflecting concern among neighboring states.
– The UN moved to convene an emergency session after reports that three peacekeepers were killed in southern Lebanon amid intensifying clashes between Israel and Hezbollah.
Military moves and warnings
– The United States has deployed additional forces to the region, including roughly 2,500 Marines with more units en route, and ordered about 1,000 paratroopers to the theater of operations.
– President Trump said ceasefire talks were making progress but warned that if the Strait of Hormuz remains closed the US may widen its campaign to strike energy infrastructure, including power plants, oil wells, Kharg Island and possibly desalination facilities.
– Iran accused the US of using diplomacy to buy time while reinforcing its own deployments.
– Israel and the US conducted further strikes on Iranian targets, including areas around Tehran, according to officials, while Tehran launched new attacks on Gulf neighbors and naval targets.
Wider consequences and outlook
The combination of military strikes, shipping attacks and threats to energy infrastructure has raised fears of a broader regional conflagration and prolonged damage to production and export capabilities. Analysts warn that even if fighting eases, lasting harm to Middle East energy networks and persistent volatility in oil prices could slow global growth and keep inflation elevated.
As diplomatic talks continue under heavy strain, nations and markets are bracing for further military, economic and humanitarian fallout. Troop movements and additional strikes suggest the conflict could expand unless negotiators secure a rapid and enforceable de‑escalation.
