On Tuesday, as the US-Iran conflict entered its 144th day, US Defense Secretary Pete Hegseth was scheduled to testify before a key Senate panel. This testimony coincides with the Trump administration’s efforts to secure congressional approval for tens of billions of dollars in funding for the ongoing conflict with Iran.
At a public hearing to consider the supplemental funding request, Hegseth could also face questions from lawmakers about the latest reporting this week that the Pentagon has been slow to disclose injuries to US troops during the ongoing war, as the US Central Command has not been regularly disclosing non-fatal attacks in recent months, leaving the totals to a military website, which has shown delays in updates.
While the US military said it completed more strikes against Iran late Monday, the Jordanian army said its air defense systems today intercepted and shot down three Iranian missiles, while the Iran-backed Houthi group in Yemen has declared a maritime blockade on Saudi shipping, a move that could threaten global oil supplies.
There were 209 verified crossings of the Bab al-Mandeb chokepoint at the southern end of the Red Sea between July 15 and 19, according to maritime intelligence group Kpler. The Houthis have previously attacked ships in the area.
Bab al-Mandeb links Europe and Asia through one of the world’s busiest shipping routes. Nearly 15% of global maritime trade passes through the strait. Previous disruptions to shipping between 2023 and 2025 cost around $20 billion a year, according to industry estimates.
In March, when the world, hungry for oil, got a modest reprieve, Saudi Arabia began diverting millions of barrels of crude —ordinarily destined for ships transiting the blockaded Strait of Hormuz — to its Red Sea port of Yanbu.
Undoubtedly, anything that jeopardizes Saudi oil flows out of the Red Sea will put more upward pressure on global oil prices.
Now, oil prices are rising once again as the Iran-backed Houthi group in Yemen declared a maritime blockade on Saudi shipping, exacerbating global energy supply concerns amid renewed attacks on tankers in the Strait of Hormuz.
, the global oil benchmark, ticked up 1.8% to $90.85 a barrel shortly before 8.00 a.m. ET. , the US benchmark, climbed by a similar margin to $83.97 a barrel. Brent has now risen by almost $20 a barrel this month, as fighting between the United States and Iran ramps up again.
Undoubtedly, Saudi Arabia has increased exports from its Yanbu port in the Red Sea to 4 million barrels per day, seeking to bypass Hormuz, according to consultancy Rystad Energy.
The firm’s vessel tracking data indicates that approximately 2.5 million barrels per day of these volumes are currently moving south through (Bab al-Mandeb), leaving a critical alternative export route directly exposed to potential Houthi action.
Meanwhile, the International Energy Agency warned Tuesday that global energy security would deteriorate further unless the Strait of Hormuz reopened, as IEA Executive Director Fatih Birol has said that there is no room for complacency on oil security amid the escalation in hostilities and a continued drawdown of available commercial inventories.
Amid such a scenario, I find that there is hardly any hope for a diplomatic resolution between the United States and Iran, as the mediators had proposed a 10-day ceasefire aimed at salvaging an interim ceasefire deal and creating space for broader negotiations.
But a renewed exchange of strikes in recent weeks has shown few signs of letting up. Critically, this has cast uncertainty around the status of the Strait of Hormuz, a chokepoint through which a fifth of the world’s oil and liquefied natural gas passed before the start of the war in late February.
On Tuesday, gained slightly but remained range-bound, as investors grew optimistic about a potential breakthrough to quell geopolitical tensions in the Middle East, which could temper oil-driven inflation risks and shape the Federal Reserve’s interest-rate outlook.
I conclude that concerns have abounded that the developments will stem global oil flows, sparking a burst of inflation and leading central banks to consider interest rate hikes in response. The Federal Reserve is tipped to stand pat on rates at a policy meeting next week, but there is about a 54% chance of a quarter-point increase at its following gathering on July 27-28, 2026.
