US strikes near Strait of Hormuz imperil talks, unsettle markets

U.S. military forces carried out overnight strikes on missile launch sites and boats in southern Iran near the Strait of Hormuz, CENTCOM confirmed, as indirect negotiations aimed at ending hostilities continued in the region. The command described the action as defensive and said it targeted systems that threatened U.S. personnel.

CENTCOM spokesman Timothy Hawkins said the strikes were intended to protect troops from threats posed by Iranian forces and hit missile launch sites and boats that were attempting to emplace mines. Explosions were reported in Bandar Abbas and along nearby coastal areas including Sirik and Jask, according to Iranian state-affiliated sources.

Iran’s Islamic Revolutionary Guard Corps asserted it had shot down a U.S. drone and forced another drone and a fighter jet to retreat, and warned that reciprocal responses remained legitimate. President Donald Trump had said the talks were “proceeding nicely” before the strikes and had warned that a failure to reach a deal could lead to renewed military escalation. Senator Marco Rubio defended the operations, saying “the straits have to be open, they’re going to be open one way or the other, so they need to be open.”

Negotiators continued indirect talks in the region, with officials on both sides reporting limited progress but acknowledging major disagreements. Iran’s foreign ministry reported a “degree of understanding” on several points while stressing a final agreement was not close. Tehran is seeking the release of roughly $24 billion in frozen overseas funds as part of any settlement, a demand that U.S. political leaders may oppose.

Key technical disputes persist. International inspectors report Iran holds about 970 pounds of uranium enriched to roughly 60 percent, near weapons‑usable levels. U.S. negotiators have discussed options such as moving some material abroad or diluting stockpiles to lower enrichment. The duration of any limits on enrichment is contested: U.S. officials previously sought long-term restrictions while Iran favors shorter timelines. Current talks reportedly do not include formal limits on Iran’s ballistic missile program.

Israel’s security concerns remain a complicating factor. Israeli leaders have signaled plans to intensify operations against Iranian-backed groups and have prepared for possible expanded activity in Lebanon. Israeli officials have stressed they will not accept arrangements that leave missile threats unaddressed.

Financial markets reacted to the escalation with mixed moves. U.S. crude futures fell about 5% to $91.87 per barrel, while Brent rose more than 2% to $98.20 per barrel. European equities slipped after the strikes, while U.S. futures moved higher on the expectation some form of détente could eventually be reached. Market analysts noted investors appeared willing to buy on price dips, though they questioned how much risk had already been priced into markets.

Diplomats have reportedly discussed temporary arrangements tied to the Strait of Hormuz, including proposals to reopen the waterway roughly 30 days after a deal, but details and enforcement mechanisms remain limited. For now, military actions and negotiations are unfolding at the same time, leaving the diplomatic process fragile and the region’s security situation uncertain.