Summary of Key Points
In July 2026, the second phase of the US-Iran conflict resumed: The trigger was an attack on merchant vessels in the Strait of Hormuz. The United States used this as a pretext to launch multiple military strikes against Iran, which in turn responded by announcing the closure of the strait. The US immediately reinstated the maritime blockade on Iran. At the same time, the US tightened its sanctions (revoking oil export exemptions and targeting financial and shipping networks), causing international oil prices to rise from around $70 at the beginning of July to over $80. Although the future situation is controllable (due to factors such as the US mid-term elections and market responses), the global energy market will continue to experience volatility.
Detailed Analysis
1. The Resumption of the US-Iran Conflict: The Chain Reaction from Vessel Attacks to Strait Closure
On July 6-7, 2026, there were consecutive attacks on merchant vessels in the Strait of Hormuz (including a Qatar LNG ship and Saudi oil tanker). The US and Qatar blamed Iran, while Iran claimed that the positioning systems on their ships posed a risk. On July 7, the US launched its first round of strikes, targeting Iranian air defense systems and drone bases; Iran retaliated by bombing a US base in Bahrain and announced the closure of the Strait of Hormuz, a critical global oil transportation route. The US quickly reinstated the maritime blockade, escalating the conflict. By July 15, the US had launched four rounds of strikes, and Iran threatened that "not a single drop of oil would be exported from the region" if the US continued to attack.
In simple terms: It's like two neighbors fighting over access to a road (the Strait of Hormuz). They start with verbal arguments, then move on to physical attacks, and finally block the road completely, preventing either side from using it.
2. Increased US Sanctions: Four Measures to Strangle Iran's Economic Lifeline
In addition to military strikes, the US implemented four additional sanctions:
- Revocation of Oil Export Exemptions: Previous permits allowing Iran to sell oil temporarily were revoked, trapping approximately 63 million barrels of Iranian crude oil at sea and cutting off its main source of revenue.
- Sanctions on Financial Supporters of the Supreme Leader: Assets of key financiers of the Iranian supreme leader, Ayatollah Ali Khamenei (such as UAE businessman Ali Ansari), were frozen.
- Targeting the Shipping Empire: The US sanctioned Iran's shipping network, including two Chinese Hong Kong companies and a Chinese ship, to prevent Iran from circumventing sanctions through maritime routes.
- Blocking Weapon Procurement: Sanctions were imposed on international intermediaries supplying weapons to the Iranian Revolutionary Guards, cutting off their supply of military equipment.
In simple terms: The US is not only attacking militarily but also financially isolating Iran by freezing its oil revenues, cutting off external financial support, preventing it from transporting goods, and restricting its ability to acquire weapons, effectively making it unable to continue fighting.
3. The Wild Ride of Oil Prices
In the first half of 2026, the US-Iran conflict caused oil prices to soar before dropping: they reached a peak of $118 per barrel in March but fell to around $72 after a ceasefire agreement in June. With the resumption of hostilities in July, prices immediately rebounded, with Brent crude approaching $85 and WTI near $80 on July 15.
Reasons: The Strait of Hormuz handles approximately 20% of global oil transportation. Its closure or blockade led to concerns about supply shortages, and the US's ban on Iranian oil exports further reduced global crude supplies.
In simple terms: It's like a shortage in the market—when less oil is available (due to the blocked strait), prices rise. The previous ceasefire had lowered prices, but with the conflict resuming, prices have gone up again.
4. The Strait of Hormuz: The Lifeline of Global Energy
The Strait of Hormuz is the only route from the Persian Gulf to the Indian Ocean, through which most oil and natural gas from Middle Eastern countries (such as Saudi Arabia, UAE, and Qatar) is exported. If the strait were completely closed, global oil supply would decrease by about 20 million barrels per day (20% of the total demand), potentially triggering an energy crisis.
In simple terms: This strait is like a vital artery for global energy supply. If it's blocked, countries around the world could face shortages, leading to soaring oil prices and increased costs for consumers.
5. Future Predictions: Will Oil Prices Reach New Heights?
It's unlikely they will exceed the $118 level of the first half of the year:
- US Mid-Term Election Pressure: The Trump administration doesn't want high oil prices (as voters may complain about expensive fuel), so the conflict is likely to remain contained.
- Market Experience: The market has already experienced the impact of a closed strait; oil-producing countries (like Saudi Arabia) may increase production, and other nations have tapped into their oil reserves.
- Iran's Limited Strength: Iran's military and economic capabilities are unlikely to sustain a prolonged conflict.
However, Volatility Will Continue: As long as the conflict persists, oil prices will fluctuate significantly, with possible daily changes of 5% or more. Businesses and consumers need to be prepared for such volatility.
In simple terms: Although the fighting continues, both sides are cautious not to escalate the situation too much (the US doesn't want high oil prices to harm its voters, and Iran doesn't want to lose the conflict). Therefore, prices may not reach previous highs, but they will remain unstable, similar to unpredictable weather conditions.
Conclusion
The resumption of the US-Iran conflict is essentially a struggle for control over energy resources, with the Strait of Hormuz at the center of the dispute. Although short-term price increases are expected, the situation is manageable. However, global energy market instability will continue for some time. Individuals should be aware of how changes in oil prices affect their living costs, and businesses need to manage their supply chains and expenses accordingly.