War returns to West Asia, oil seesaws as Hormuz bleeds

Washington: Early on Tuesday, the US launched a third round of strikes on Iran, which retaliated by attacking US military bases in Jordan and Bahrain, even as US President Donald Trump backed down from his threat to heavily tax ships passing through the Strait of Hormuz.

The fresh attacks left an interim peace deal in tatters.

Also Read: US-Iran war: Trump drops 20% toll plan on Hormuz, seeks Gulf investment deals instead

Oil pared nearly all its session gains after Trump’s post, following an earlier surge as the conflict escalated. Brent crude topped $87 a barrel for the first time in a month before falling to around $84 at the time of going to press.

The global benchmark jumped more than 5%, with several other key market gauges also surging, including those in West Asia.

Attacks continue

Wall Street was relatively calmer after data showed lower-than-expected US inflation. Most Gulf equity markets closed lower and European stocks fell, but Asia’s Kospi and Nikkei climbed.

Also Read: Trump’s Strait of Hormuz Plan Explained: Can the US charge ships and what it means for India

Iran reported fresh strikes late on Tuesday on its Gulf island of Qeshm, even as state media said explosions heard in Andimeshk were not enemy attacks. In the morning, the US sustained its attacks for five hours. Air raid sirens warned of another missile attack in Bahrain in the evening.

Two Emirati oil tankers were struck by Iranian cruise missiles in the Strait of Hormuz, the UAE Ministry of Defence said on Tuesday, in the latest escalation in the strategic waterway.

“I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States,” Trump posted on social media. “Those investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future.”