Iran says it destroyed U.S. drone over Strait of Hormuz amid escalating conflict

Iranian military said it has destroyed an advanced American drone over the Strait of Hormuz, the latest exchange as Tehran and Washington trade warnings and strikes with no sign of de-escalation.

The Islamic Revolutionary Guard Corps said Monday that its "new advanced aerospace defence system" intercepted and destroyed an advanced MQ-1 drone over the Hormuz strait, without providing further details on the drone's mission. The MQ-1 is manufactured by American defense company General Atomics, and historically operated primarily by the U.S. Air Force and the CIA.

The incident followed a series of Iranian operations against U.S. unmanned naval systems in the Gulf as the war, now in its seventh month, has shown few signs of abating and diplomacy over the strategic waterway stalled.

On Sunday, President Donald Trump said the U.S. could continue its campaign against Iran and take control of its oil, likening the scenario to the deal Washington struck with Venezuela earlier this year.

"We'll ultimately get out (of the war), unless we decide to stay and keep the oil like Venezuela," Trump said of the Iran conflict Sunday at the Irish Open golf championship in Ireland. He added that U.S. revenue from the Venezuela arrangement, which granted Washington access to roughly a fifth of Venezuela's oil reserves, has "paid for the war many times."

Under the agreement reached in August, Venezuela ceded majority U.S. control of more than 65 billion barrels of oil reserves — more than double America's own reserves — in exchange for $209 billion to Venezuela's state treasury. Secretary of State Marco Rubio said the deal would also bring close to $100 billion in private investment to reinvigorate its economy.

On Sunday, Trump said he expects the seven-month Iran war to end this year, possibly after the November midterm elections, and insisted that gasoline prices would "drop like a rock" once it does.

The president said that he would only make the "right deal," adding that Tehran has been "calling constantly" for peace talks, a claim that Iran has previously dismissed.

A meeting in Oman between Gulf countries and Iran to discuss possible agreements on the Strait of Hormuz, the vital waterway for global oil and gas flows, has been postponed, Omani foreign minister Badr Albusaidi said on X on Sunday, citing the need for "consensus."

Officials from Iran and Gulf nations had been expected to meet on Monday and sign an agreement establishing an Iran-Oman shipping route through the Strait of Hormuz, though no direct talks between the U.S. and Iran were ongoing.

The Strait of Hormuz has been subjected to an Iranian and later U.S. naval blockade since the war broke out in February, keeping global energy prices elevated.

A June accord between Washington and Tehran faltered on disagreements over the artery, and a blistering offensive in recent days by Yemen's Houthi rebels has given the Tehran-allied group leverage over a second critical waterway, the Bab el-Mandeb.

Ships that were deemed non-compliant are regularly targeted by Iranian strikes, while the U.S. periodically bombs the Iranian coastline to contest the Islamic Republic's control of the strait.

Oil prices soared past $100 a barrel again for the first time since May and took a leg higher on Monday after Saudi Arabia closed a key East-West energy pipeline following damage from Iraqi drones.

U.S. West Texas Intermediate futures were up 2.3% to $102.39 per barrel. Brent crude, the international benchmark, traded 2.4% higher to $107.11 a barrel.