US strikes Iran-aligned groups in Iraq as conflict escalates

United States warplanes carried out military strikes targeting Iran-aligned militant groups in eastern Iraq, operating in coordination with Saudi Arabia, according to reporting from the BBC. US Central Command announced that the strikes were directed at forces that the Islamic Revolutionary Guard Corps directed to attack US forces and Saudi energy infrastructure. The military action followed a series of drone attacks launched by militants in recent days, and came after Iran stated it had targeted a US military base and command centre in Jordan with ballistic missiles. Central Command added that Tehran had previously launched multiple ballistic missiles in an attempted surprise attack on US forces based in the Middle East, though all were intercepted.

The renewed military operations ended a brief pause in hostilities. According to reports, the US and Iran had extended a temporary halt to skirmishes as diplomatic focus shifted toward discussions between Tehran and Oman regarding restarting traffic through the Strait of Hormuz. Omani and Iranian negotiators met in Tehran over the weekend, with talks remaining ongoing according to people familiar with the situation. A deal to restore regular ship movements through the waterway would allow the US and Iran to resume formal negotiations concerning Tehran's nuclear program and permanently ending their ongoing conflict. Omani officials anticipated making an announcement signaling progress on the negotiations.

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US President Donald Trump told Axios that there are very deep talks with Iran and suggested negotiations involving Oman are the primary track. In remarks to reporters, Trump stated that Iran is talking because of the pressure caused by recent US military strikes. Meanwhile, Israeli Prime Minister Benjamin Netanyahu met with Trump in Washington, marking their first meeting since the conflict with Iran began, as reported by the BBC. Netanyahu indicated he planned to press the US leader on maintaining constant watch over Iran's nuclear program.

The conflict's broader ramifications continue to ripple across international shipping lanes and energy markets. Iran halted three oil tankers in the Strait of Hormuz, through which a significant portion of global crude and gas usually passes. Shipping traffic through the strait slumped as Iran threatened vessels attempting transit without permission. A similar situation persists in the southern Red Sea and Bab el-Mandeb strait following warnings from Iran-backed Houthis. Empty supertankers headed to Egypt's Mediterranean port of Sidi Kerir to collect Saudi crude as observable traffic at the kingdom's Red Sea export hub of Yanbu dwindled following Houthi warnings against calling at Saudi Arabian ports.

The escalation immediately impacted global financial markets. Both main oil contracts rose more than four percent following the renewed Middle East flare-up, reviving supply fears after Brent crude had swung wildly from earlier in the month to over one hundred dollars the previous week. Prices subsequently slumped below eighty-six dollars once skirmishes paused. The oil price decline eased pressure on Trump by triggering a fall in US gasoline prices, as Americans opposed the war and that sentiment affected the standing of Trump's Republican Party ahead of mid-term elections in November.

The human toll of these economic and geopolitical shocks extends deep into daily life worldwide, according to Yahoo News reports. In Vietnam, a jeepney driver struggled to afford surging diesel prices while living inside his minibus with his daughter. In Nigeria, printing business owners in Lagos faced doubled fuel costs for generators amid frequent power outages. In Chile, a taxi driver grappled with soaring fuel prices while competing against ride-hailing services. In Turkey, traditional carpet merchants watched international collectors vanish as airport closures and conflict suppressed trade. In Italy, a Rome farmer faced rising fuel and fertilizer costs with no money to replace aging machinery. In the United States, a Bronx family balanced rent-stabilized housing with gasoline price increases, while a Nepali mother awaited word from her son returning to his hotel job in the Gulf.

Simultaneously, financial markets monitored Federal Reserve policy decisions and commentary on economic risks amid market volatility, while investors awaited upcoming corporate earnings reports from major international technology and energy firms.

What to Watch Next

• Omani officials anticipate making an announcement signaling progress on Strait of Hormuz negotiations.
• Federal Reserve policy decisions and commentary on economic risks continue to unfold amid market volatility.
• Upcoming corporate earnings reports from major international technology and energy firms.

For ongoing updates on international developments, consult News coverage.