U.S. and Iran Resume Missile Fire Over Strait of Hormuz

The United States and Iran have ended a one-month peace agreement, resuming hostilities through an exchange of missile fire. The conflict escalated on July 14 after the Iranian parliament ruled that the ceasefire had ended due to alleged American violations of a memorandum of understanding. The United States subsequently launched two new attacks on Iran, while Iranian forces targeted ships navigating near the coast of Oman.

Hostilities center on control of the Strait of Hormuz. Iran intends to seek administrative control of the waterway, raising fears of a renewed blockade. In response to the instability, the United States has proposed a 20 percent fee on the value of cargo for ships passing through the strait.

These military actions, combined with Ukrainian drone attacks on Russian refineries that halted Russian diesel exports, have severely tightened global diesel supplies. In the U.S., the Energy Information Administration reported that average diesel prices rose by 22 cents to $4.796, with the Gulf Coast seeing the sharpest increase of 32 cents. Australia, which relies on imports for 80 percent of its oil product consumption, faces potential price spikes as its stockpiles remain thin at 50 days of net imports.