The United States and Iran exchanged strikes for a second consecutive night on July 9–10, 2026, with US forces hitting 90 Iranian military targets including air defence systems and logistics infrastructure along Iran’s coastline — among them sites near the Bushehr nuclear power plant and the ports of Chabahar, Bandar Abbas, Sirik, and Jask. Iran retaliated by targeting US military assets in Kuwait, Bahrain, Qatar, Jordan, and Iraq; explosions were reported in Manama and Kuwait intercepted missiles and drones. Iran’s health ministry put the casualty count at 14 killed and 78 injured across five provinces. Meanwhile, the funeral of Ayatollah Ali Khamenei — killed in the opening strikes of the conflict on February 28 — drew enormous crowds in Mashhad, some bearing signs with death threats against Trump. Traffic through the Strait of Hormuz, which once carried roughly 138 ships per day, has fallen to single figures. The US Strategic Petroleum Reserve now stands at 319.5 million barrels — its lowest level since 1983, having dropped 6.2 million barrels in a single week. Brent crude settled at $78.02 on July 9, up 5.2 percent in a single session.
The received wisdom
The mainstream reading of these exchanges is essentially hawkish-liberal: American credibility demanded a response to Iranian attacks on commercial shipping, the June ceasefire memorandum of understanding was always going to be fragile, and Trump’s firmness — however undiplomatic in expression — is at least preferable to the feckless engagement that characterised the Biden years. The Strait of Hormuz, this argument runs, cannot be allowed to become an Iranian toll road; the rules-based international order governing freedom of navigation is worth defending at cost. Iran’s parliamentary speaker’s declaration that “the Strait of Hormuz will only open under Iranian arrangements” is a sovereignty claim no Western government can accept. From this perspective, the current strikes are a necessary, if painful, correction to Iranian adventurism — and the pain at the pump is the price of maintaining a global order that ultimately benefits everyone.
There is something to this. Iran’s behaviour — striking commercial vessels in Omani waters in apparent breach of the June MoU, insisting on routing fees and coordination requirements for all Hormuz traffic — is not the behaviour of a party negotiating in good faith. Maritime security expert Jennifer Parker of the University of New South Wales put it plainly: even on a generous reading of the MoU, it does not permit Iran to attack civilian shipping in Omani waters.
A different read
And yet. The structural problem with the current American posture is not that it lacks resolve but that it lacks a theory of victory. Khamenei is dead, 90 targets have been struck, the IRGC’s barracks are on fire — and Iran is still attacking ships. Not because Iran is irrational, but because control of the Strait of Hormuz is, as Ryan Costello of NIAC observed, more significant leverage for Tehran than its nuclear programme in the near term. Lose that, and Iran loses its primary deterrent against the next American or Israeli strike. No amount of bombardment changes that calculus, because the leverage derives from geography, not from the willingness to absorb punishment.
The June MoU, which Trump declared “over” at the NATO summit in Ankara, was always an instrument of managed ambiguity. The text tasked Iran with “de-mining” and ensuring safe navigation “free of charge for the first 60 days,” while instructing Tehran and Muscat to define “the future administration and maritime services” in line with “sovereign rights of coastal states” — language that Iran, not unreasonably from its own legal framework, read as an opening to future toll arrangements and coordinated transit. The US read it as a reaffirmation of free passage. Both interpretations were, in a sense, correct, which means the MoU resolved nothing about the underlying sovereignty dispute. It was not a peace agreement; it was, as analyst Negar Mortazavi of the Center for International Policy noted, “a framework for managing conflict” — and even that framework has now collapsed.
The consequences are cascading beyond the Gulf. The Strategic Petroleum Reserve’s slide to 319.5 million barrels is alarming not merely as a number but as a strategic fact. Energy expert Abhi Rajendran of Rice University’s Center for Energy Studies warns that up to 100–150 million barrels of what remains may be unusable — stored in old caverns, degraded in quality, inaccessible to current refiners. The effective usable reserve may be as low as 170–220 million barrels. The US is the world’s largest oil producer and a net exporter, but as Stanford energy executive Maksim Sonin observes, that does not confer price independence in a globally traded commodity market. American petrol prices surged from under $3 to over $4.50 a gallon between February and May; Trump himself acknowledged that “anytime the US strikes Iran, oil prices jump.” The midterm elections are in November 2026.
The historical parallel that comes to mind is not the Gulf War — where US objectives were clear, achievable, and time-bounded — but the early years of the Korean War, when the Truman administration found itself fighting not to win but not to lose, trapped by the gap between the rhetorical stakes and the operational limits of American power. Both sides in the current conflict have incentives to avoid full-scale resumption: Iran faces runaway inflation and a weakened economy; the US faces an SPR approaching minimum operating levels and a domestic public with limited patience for prolonged conflict. But incentives to de-escalate are not the same as a path to de-escalation. The cycle that Martin Kelly of EOS Risk Group describes — attack, retaliation, tentative reopening, then another attack — can persist for years without resolution, inflicting cumulative damage on global energy markets and the credibility of international shipping law.
Trump called further talks “a waste of time” and described Iranian leadership as “scum.” Iran’s foreign ministry called US strikes “a grave war crime” and the US government “evil and psychopathic.” These are not the building blocks of a negotiated exit. What is missing is not toughness on either side but the painstaking diplomatic architecture — back-channel, deniable, patient — that previous administrations, Democrat and Republican alike, employed to create off-ramps from confrontations where neither side could publicly concede. The current administration has demonstrated it can inflict punishment. It has not yet demonstrated it can translate punishment into a durable political outcome.
What to watch
- SPR replenishment politics: Whether Congress moves to mandate SPR refilling constraints, or whether Trump attempts coordinated IEA releases — both would signal how long Washington believes the current cycle can last.
- Gulf state tolerance: Bahrain and Kuwait have now been struck by Iranian missiles. If Gulf Cooperation Council states begin hedging toward Iranian arrangements — or if Oman’s mediation role revives — the regional coalition backing US operations will show strain.
- Mojtaba Khamenei’s first moves: As the new Supreme Leader, his early signalling — whether he validates continued Hormuz leverage or seeks a new MoU — will determine whether the current cycle intensifies or finds a ceiling.
- US midterm dynamics: With petrol above $4 and the SPR near historic lows, a Republican-led Congress facing November elections has a strong electoral incentive to pressure the White House for a deal, regardless of ideological position on Iran.
— J