The US and Iran have exchanged strikes for a second consecutive night, with the US military targeting around 90 Iranian military sites, including air defenses and logistics infrastructure near the Strait of Hormuz. Iran claimed retaliatory attacks on US assets in Kuwait, Bahrain and Qatar, damaging ports and infrastructure. Shipping traffic has dropped dramatically to single figures on the southern route and roughly 20 on the northern route.
This follows the June 17 Islamabad MoU, which set a 60-day ceasefire for negotiations on nuclear issues, sanctions relief, as well as Hormuz passage. President Trump declared the ceasefire “over,” expressing doubts about Iran’s reliability, and suggested talks were a “waste of time.” Meanwhile, Iran’s officials condemned US actions as war crimes and vowed responses, with its chief negotiator insisting the strait opens only under Iranian terms.
Trade Analysis
Escalation has reversed recent optimism after the memorandum, severely disrupting energy flows and highlighting deep distrust. The 60-day negotiation period is still active but undermined by act of war, making a final nuclear or any political agreement by year-end less likely.
Bullish (YES) signals:
- Lingering MoU framework on uranium measures and sanctions waivers
- Mutual economic pressures could force de-escalation
- Third-party mediation and Trump’s occasional openness to a “deal”
Bearish (NO) signals:
- Cycle of strikes and retaliations sapping mutual trust
- Harsh rhetoric from both sides and Iran’s insistence on control over the strait
- IRGC actions signaling prolonged confrontation
The latest violence amplifies risks, favoring further extensions and higher tensions into late 2026, or resolution only in 2027. Base case leans strongly toward NO on a final nuclear deal by year’s end.