US strikes Tehran as collapsed Iran deal hits oil routes
The collapse of an interim peace deal has returned the US-Iran conflict to all-out war, with American strikes reaching Tehran and a naval blockade threatening to send global oil and fertiliser prices soaring again.
The US military concluded its latest wave of strikes on Iran early Thursday, marking the first time in this escalation that American attacks reached targets around Tehran. US Central Command stated that forces hit Iranian command centres, air defence sites, drone and missile capabilities, and coastal surveillance facilities. The strikes spanned multiple strategic locations, including Bandar Abbas, Qeshm Island, the southern port of Chabahar, and the northern Semnan province, where Iran houses its ballistic missile and space programmes.
Iran retaliated by launching missiles and drones at US regional assets and allied states. Bahrain activated air raid sirens, while Kuwait’s government stated on X that it faced "attacks by hostile drones" following "Iranian aggression". Jordan was also targeted in the Iranian response.
For European markets and investors, the immediate consequence of this escalation is the definitive collapse of an interim deal aimed at ending the conflict. The region has returned to a state of all-out war. Washington resumed daylight air strikes on Wednesday, explicitly stating the goal was to cripple Tehran's ability to threaten commercial shipping.
This guarantees the continued closure of the Strait of Hormuz, a vital chokepoint for global energy and agricultural supply chains that was initially shut after the US and Israel launched their campaign against Iran on February 28. The prolonged closure previously sent global prices for oil, fertiliser, and other critical goods soaring far beyond the region. European economies, already sensitive to energy shocks and heavily reliant on fertiliser imports for agriculture, should prepare for renewed upward pressure on commodity markets.
The US is actively enforcing a naval blockade to maintain this pressure. American forces fired a missile into the funnel of a Curaçao-flagged oil tanker sailing toward Kharg Island, Iran's primary oil export terminal. The US military claimed the vessel was attempting to break the blockade and had "ignored multiple warnings".
Iran had previously used the resulting global supply squeeze as major leverage in negotiations. With those talks now abandoned and the military campaign intensifying, that leverage dynamic returns. Meanwhile, the human toll on the ground is mounting. Iran's health ministry reports that at least 35 people have been killed and more than 300 wounded in the ongoing American attacks.
