Markets fell and energy prices spiked as the US‑Israel war with Iran widened, shipping through the Strait of Hormuz remained disrupted and diplomatic manoeuvres continued amid threats of further escalation.
Markets and energy
Global stock markets tumbled and oil jumped as trade through the Strait of Hormuz — a vital artery for crude and gas — was effectively closed by Iran early in the conflict. Supply disruptions and higher energy costs revived memories of the 1970s oil shocks, stoking fears of inflation and stagflation in some economies.
US actions and the Hormuz deadline
US President Donald Trump repeatedly threatened action to force the strait open, setting and then extending deadlines. On March 21 he warned Iran to reopen the waterway within 48 hours or face strikes on energy facilities. He later extended that deadline, first by five days and then by 10 days, saying talks with Iranian interlocutors were progressing and that Iran was “begging” for a deal. The White House also transmitted a 15‑point peace plan to Iran via intermediaries in Pakistan.
Iran’s military posture
Iran’s Islamic Revolutionary Guard Corps (IRGC) said the Strait of Hormuz was closed and warned that any transit would be met with “harsh measures.” The Guards also announced a prohibition on shipping “to and from” ports of countries they described as allies of the US and Israel; state media said several commercial vessels were turned back after warnings from IRGC naval forces. The Guards urged civilians to stay away from areas near US forces, accusing US and Israeli troops of using civilian areas as shields.
Regional fighting and attacks
The conflict has produced repeated strikes across the region. Iran has launched missiles and drones targeting Israel and other countries; despite Israel’s missile defences, some strikes reached urban areas and caused civilian casualties. Israel’s defence minister, Israel Katz, warned attacks “will escalate and expand” to additional targets that assist Iran’s weapons efforts. Israel also reportedly conducted strikes in Beirut and in Tehran, while Lebanon’s southern suburbs were hit in a pre‑dawn raid.
Bahrain’s military said its defences had shot down hundreds of incoming drones and missiles, claiming 362 drones and 154 missiles defeated so far. Kuwait reported damage to its main commercial port, Shuwaikh, from a drone attack but said there were no casualties. A strike on Kuwait International Airport earlier damaged fuel storage and sent plumes of smoke into the sky.
Diplomacy and indirect talks
Despite the fighting, indirect contacts between the US and Iran have occurred. German Foreign Minister Johann Wadephul said preparations were underway for direct meetings in Pakistan between US and Iranian representatives. US Secretary of State Marco Rubio travelled to France for a G7 foreign ministers meeting expected to focus on the Iran war, the Strait of Hormuz and broader strategy. Some US allies have been reluctant to join military operations; Japan and several European nations said they had no immediate plans to send ships into Hormuz, though Germany signalled readiness to consider post‑war help securing shipping.
Multinational responses
The United Arab Emirates told the US and Western partners it would join a proposed multinational maritime task force to reopen the strait, and it has urged other countries to form a “Hormuz Security Force” to escort shipping and deter attacks. Several Western governments, however, have been cautious about committing forces while the war continues.
Wider regional and international fallout
Saudi Arabia and Ukraine signed a defence cooperation agreement, with Ukraine offering air‑defence expertise as Gulf states face repeated missile and drone strikes. The conflict has disrupted international sports and events: Formula 1 canceled races in Bahrain and Saudi Arabia, making the Japanese Grand Prix the last race for five weeks. Iran’s sports ministry banned national and club teams from travelling to countries it deems “hostile,” complicating international fixtures and raising questions about Iran’s scheduled World Cup matches in the United States.
Human cost and accountability
The UN human rights chief, Volker Türk, called on the United States to conclude a probe into a deadly strike on an Iranian school on February 28 and to publish its findings. Preliminary US military reporting has suggested a Tomahawk cruise missile struck the school in a targeting error; the UN urged swift completion of investigations and accountability.
US policy timeline
Key developments in US policy over the past month include:
– Feb 28: War begins as US and Israel launch strikes across Iran; Iran closes the Strait of Hormuz.
– March 5: Oil tops $100 a barrel; Trump comments on Iran’s leadership succession.
– March 13: US bombing raid on Kharg Island hits many military sites but spares energy infrastructure.
– March 21: Trump issues 48‑hour deadline to reopen Hormuz.
– March 23–26: Trump extends the deadline twice amid reports of “very good” but unspecified talks; Pentagon considers further troop deployments.
– March 24: US sends a 15‑point plan to Iran via intermediaries.
Other developments
– The Houthis in Yemen have said they do not currently plan to limit passage in the Red Sea.
– UAE has indicated willingness to deploy naval forces to a multinational Hormuz operation.
– Iran’s government has restricted sports teams’ travel and instructed federations to seek relocation of fixtures when necessary.
– The war has forced cancellations and relocations across business, cultural and sporting calendars.
Outlook
The situation remains fluid: military strikes and counterstrikes continue, diplomatic channels are active but opaque, and markets are reacting to both heightened risk and the prospect of prolonged energy supply disruption. International partners are weighing how to respond — militarily and diplomatically — while civilian populations across the region face increasing danger and disruption.