Key Takeaways

• Direct military exchange: The U.S. struck targets near Bandar Abbas; Iran’s IRGC retaliated by hitting a U.S. military base in Kuwait.
• Kuwait defends against attacks: Kuwaiti authorities confirmed defending against drone and missile strikes.
• U.S. downs Iranian drones: Reuters reported the U.S. military shot down four Iranian attack drones and hit a ground control station in Bandar Abbas.
• “Self-defense” claim: The U.S. military maintained the ceasefire remains in place and described the attacks as defensive.
• Trump rejects Hormuz deal: The president dismissed reports of an Iran-Oman joint management arrangement, saying no single country can control the strait.
• “Not satisfied yet”: Trump signaled Iran wants a deal but he isn’t happy with the terms yet.
• Nuclear gap persists: U.S. officials maintained Iran cannot develop a nuclear weapon; the draft framework made no mention of enriched uranium.
• Iranian draft deal revealed: Reports showed Tehran would restore Hormuz shipping within a month under the framework, with Iran and Oman jointly managing traffic.
• Blockade would lift: The framework reportedly included Washington lifting its naval blockade of Iranian ports.
• Oil surges 2.6%: Crude recouped some of the week’s deep losses but remains more than 20% above pre-war levels.
• Lebanon fighting continues: Israeli hostilities against Hezbollah in southern Lebanon kept broader Middle East tensions elevated.
• Hormuz still vital: The strait carries roughly a fifth of global oil — its continued closure remains the key market concern.

The United States and Iran reportedly traded air strikes on Thursday, sending oil prices higher just hours after President Donald Trump downplayed expectations that a deal to reopen the Strait of Hormuz was close.

The U.S. military struck targets near the Iranian city of Bandar Abbas earlier in the day, drawing retaliatory measures from Iran’s Islamic Revolutionary Guard Corps (IRGC), media reports said.

The IRGC said it had struck a U.S. military base in Kuwait as retaliation for the Bandar Abbas attacks. Separately, Kuwaiti authorities said they were defending against drone and missile attacks.

Reuters reported that the U.S. military shot down four Iranian attack drones and hit a ground control station in Bandar Abbas.

Ceasefire on the Brink

The attacks marked a potential resumption in open hostilities between the United States and Iran, especially after Tehran had warned of retaliation following U.S. strikes earlier this week.

The U.S. military claimed that the attacks were carried out in “self-defense” and that a ceasefire with Iran remained in place.

Thursday’s attacks came shortly after Trump dismissed a report that Iran and Oman would manage shipping through the Strait of Hormuz under a proposed deal to end the war. Trump also indicated that Iran wanted to make a deal, but that he was not satisfied with the agreement as currently structured.

The fresh military action, coupled with Trump’s comments, indicated that a peace deal to end the war and reopen the strait — a vital waterway through which a fifth of the world’s oil transits — remained elusive.

Draft Deal and Its Limitations

Iranian media had reported on Wednesday that an unofficial draft of a peace deal said that Tehran would restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, and that Iran and Oman would jointly manage traffic through the channel.

The framework deal — which a host of reports said was close to being agreed on by both sides — would also see Washington lift its blockade of Iranian ports, local media reported.

But Trump largely dismissed the report, stating that no single country could control Hormuz. U.S. officials also maintained their stance that Iran cannot be allowed to develop a nuclear weapon, with reports on the framework deal making no mention of the country’s enriched uranium stockpile.

Oil Rebounds, Region Remains on Edge

Oil prices were last higher by 2.6% following Thursday’s attacks, recouping a measure of the deep losses seen over the past week, but staying more than 20% above levels seen before the start of the conflict in late February.

Separately, Israeli hostilities against Hezbollah forces in southern Lebanon also continued, keeping broader tensions across the Middle East elevated.