Escalating tensions in Strait of Hormuz as US and Iran trade strikes

Iran has said it will unveil new sanctions for ships trying to pass through the Strait of Hormuz following a weekend of renewed exchanges with the United States, casting fresh doubt on progress towards an end to the six month conflict.

Mohsen Rezaei, the secretary of Iran’s supreme national security council, told state TV on Sunday that Tehran will announce a new ‘exclusion zone’ outside of the waterway in the coming days.

He said any ship seen entering the new restricted zone would be added to a sanctions list, reiterating that the waterway would only fully open again once the Americans “stop the sabotage, threats and attacks on Iran”.

Iran and the United States traded fire again over the weekend, forcing oil prices back up to $93 per barrel and driving Hormuz traffic down to its lowest since May.

The US claimed strikes on three Iranian oil tankers, including one off the coast of Kharg Island, after Iran’s Islamic Revolutionary Guard Corps launched ballistic missiles at two American naval vessels.

An average of 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, the lowest since May, according to shipping data on Monday, after US and Iranian strikes on tankers.

The 10-day moving average was 10 on Sunday, down from more than 15 on Friday and nearly 13 on Saturday, data from analytics firm Kpler found.

Only two vessels passed through the strait on Saturday while six went through on Sunday, mostly using the Iranian route.

US forces struck three Iranian oil tankers on Saturday, Central Command said, including one off Kharg Island, Iran's key oil export hub, following attacks by Iran's Islamic Revolutionary Guard Corps on US warships in the region.

In retaliation, the IRGC navy said on Saturday it targeted three oil tankers travelling unauthorized routes in the strait as well as three additional U.S. vessels in other areas.

President Donald Trump has backed up comments from his vice president and insisted the Iran conflict is a relatively minor operation, rather than a full-on war.

"I call it a military conflict because it's small potatoes for us,” the president told reporters in the Oval Office on Friday. “It’s not a big thing.”

When pressed by Rachel Scott of ABC News about the record-setting deployments of certain service members as part of the fight, the president lashed out, repeatedly asking, “How long were we in Vietnam?”

President Trump claimed the U.S. had successfully stopped Iran from getting a nuclear weapon and alleged U.S. satellite intelligence would spot any future threats from the country the moment they arose. The U.S. had “essentially taken over” Iran, the Republican said.

At least 11 people have been killed and seven injured after a fuel tanker exploded in western Iran, state media said.

State news agency IRNA reported late on Saturday that the vehicle suffered a brake fault and struck several cars before catching fire near a traffic police station outside Sanandaj, a Kurdish city roughly 400 kilometres (248 miles) west of Tehran.

The injured were taken to hospital. A similar collision involving a fuel tanker and a passenger bus near Sanandaj in 2018 killed 15 people and injured four.

Israeli strikes on a southern Lebanese town early on Monday killed at least 11 people including two children and two medics, Lebanon's state news agency said.

Israel has intensified its bombardment of south Lebanon in recent days despite a June ceasefire that was meant to halt fighting between the Israeli military and Lebanese armed group Hezbollah. At least seven people were killed in Israeli strikes on Sunday.

Just after midnight, Israeli warplanes hit a residential building in the town of Kfar Rumman in southern Lebanon, killing nine people including two children, and wounding five more, Lebanon's National News Agency reported.

A separate Israeli drone strike on a civilian vehicle in the town killed two medics inside the car, it said.

The strikes on the town came without an online evacuation warning from the Israeli military.

Any Israeli plan or action to remove Palestinians from Gaza would violate international law and undermine the US-backed plan for drawing down the war, eight Muslim nations said in a statement.

Israel's national security minister, Itamar Ben-Gvir, last week published a plan to encourage Palestinian migration from Gaza. Israel's defence minister, Israel Katz, has said Israel is prepared to facilitate the removal of Palestinians by sea, air or other means, and that plans remain under discussion.

The foreign ministers of Egypt, Saudi Arabia, Jordan and five other governments called the statements "inflammatory" and said they threatened the "legitimate and inalienable rights" of Palestinians and the future establishment of a Palestinian state.

The ministers warned of “grave consequences of transforming calls for forced displacement into declared policy or practical measures.”

“Such measures directly challenge international efforts to achieve peace, particularly president Donald Trump’s comprehensive plan to end the conflict in Gaza, which includes a firm rejection of forced displacement,” they added, referring to the US-backed October 2025 peace plan for Gaza.

Iran will raise the price of gasoline for users surpassing 110 litres per month starting on Tuesday, a government spokesperson said, as it steps up efforts to tackle problems created by the war and crippling US economic sanctions.

Motorists can still buy up to 60 litres at 15,000 rials (about one pence) per litre and an additional 50 litres at 30,000 rials per litre.

But the price for amounts above that will be raised to 100,000 Iranian rials (about 5 pence) per litre, Fatemeh Mohajerani said in comments carried by state media.

The increase in Iran's gasoline price, which is one of the lowest in the world, was discussed by the government and postponed amid concerns it could trigger new protests.

Iran experienced widespread protests in 2019 over the same issue.

The higher fuel price will only affect consumers who require more than 110 litres per month and is due to "current conditions", Mohajerani said.

In December, Iran partially raised the price of its subsidised gasoline for most users, as the OPEC member sought to control rising fuel demand.

Bodies wrapped in white shrouds and draped with Palestinian flags were laid out for the mass funeral after 110 people were killed. Some shrouds bore images of the deceased.

"We are witnessing a painful, heartbreaking scene," said Mustafa Quzghat, a relative.

Over 73,650 Palestinians have been killed since the war in Gaza began, according to Gaza's Health Ministry.

Oil prices extended gains on Monday as tit-for-tat strikes between the US and Iran on vessels sailing through the Strait of Hormuz and elsewhere heightened concerns about a prolonged disruption to supplies from the Middle East.

Brent crude futures rose 79 cents, or 0.82 per cent, to $97.07 a barrel by 0512 GMT, while US West Texas Intermediate crude was at $92.28 a barrel, up 80 cents, or 0.87 per cent.

Brent rose 7.8 per cent last week while WTI gained nearly 10 per cent after the US and Iran resumed attacks and caused a reduction in oil flows through the Hormuz strait where a fifth of the world's oil supply used to transit.

Jared Kushner, president Donald Trump's son-in-law, defended the lack of progress in talks about next steps in the fragile Gaza ceasefire, saying that "it's been a dystopian place for a long time."

Speaking at a news conference in Ukraine, Kushner defended his work with Trump's special envoy, Steve Witkoff, saying the militarisation by the Hamas militant group in the Palestinian territory was "beyond our comprehension, so demilitarizing it is not going to be easy."

"But we're very determined, and we're working through these things," Kushner said.

He added: "We're working through some political issues in Israel. I think we agree with them on the end state. They just have a crazy election, and that makes them a little irrational in certain regards."