US-Iran tensions escalate as both sides breach cease-fire red lines
A week after the United States and Iran signed a preliminary agreement to end hostilities, an Iranian drone struck a cargo ship in the Strait of Hormuz on June 25. The attack caused no casualties or major damage but triggered a series of retaliatory strikes that have pushed the two countries back toward all-out war, less than a month after they agreed to stop fighting.
The preliminary deal, brokered with the help of Qatar, aimed to de-escalate the conflict that began with a surprise U.S.-Israeli attack on February 28. Since the drone strike, each side has chipped away at the agreement's pillars. Red lines set by both sides have been crossed, and efforts to salvage the deal have faltered. A return to full-scale war threatens to further destabilise West Asia and disrupt the global economy.
The attack on the cargo ship followed Iran's warning against vessels using an alternative route through the Strait of Hormuz that is overseen by the U.S. military. Iran had largely shut down the waterway—which carried a fifth of the world's traded oil and gas before the war—after the February attack, viewing control of the Strait as a key pressure point. The preliminary agreement called for the Strait to reopen but contained language suggesting Iran could manage traffic and potentially charge fees. Iran has since claimed the right to control the Strait, while the U.S. and others argue it should remain open and toll-free as before.
On June 26, the U.S. launched strikes on what it said were Iranian missile and drone locations and coastal radar sites. The next day, Iran attacked a tanker using the alternative route, prompting more U.S. strikes. Iran then retaliated against Kuwait and Bahrain, both of which host American troops. The two sides later pulled back and sent delegations to Qatar but did not meet directly.
Iran reiterated its warning against using the alternative route as it prepared for the funeral of Supreme Leader Ayatollah Ali Khamenei, who was killed in the opening U.S.-Israeli strikes. The funeral, which began on July 4, drew crowds calling for revenge against U.S. President Donald Trump.
Days later, Iran attacked three ships in the Strait. The U.S. responded with strikes targeting air defence systems, radars, and over 60 small boats used by Iran's paramilitary Revolutionary Guard. The U.S. also revoked a waiver that had allowed Iran to sell oil on the international market for U.S. dollars—a key element of the interim deal.
Iran condemned the U.S. strikes and the restoration of oil sanctions as violations of the agreement, insisting on its right to control the Strait, which its military command calls an 'unbreakable red line.' Iran broadened its retaliatory strikes to include Kuwait, Bahrain, and mediator Qatar.
President Trump, after departing from a NATO summit, offered mixed messages. He said the U.S. strikes were in response to attacks on shipping, warning that 'if it happens again, it will get much worse!' He also appeared to rule out long-term military action, saying 'anything that happens is going to happen very fast' and suggesting the U.S. military might 'just finish the job.'
The fighting has steadily escalated since then, with no clear path to de-escalation. The collapse of the preliminary deal leaves both sides on the brink of a wider conflict that could have severe consequences for regional stability and the global economy.
