On Thursday (May 28), just as the world thought the months-long tensions between the United States and Iran might be turning around, the military conflict between the two sides suddenly escalated. Iran's Islamic Revolutionary Guard Corps confirmed that it retaliated against a US airbase after the US attacked an Iranian target near the Strait of Hormuz. An unnamed Washington official revealed that the US military action was aimed at curbing the growing threat of Iranian drones in the region. This round of mutual airstrikes occurred less than two months after the fragile ceasefire agreement that took effect in early April, further dimming the already bleak prospects for peace. Meanwhile, international oil prices rebounded sharply after the news broke, and global financial markets were thrown into turmoil.

Details of the military conflict: a back-and-forth exchange from drones to missiles

(a) The U.S. preemptively shot down four drones and destroyed the ground control station.

According to U.S. officials, the U.S. military operation targeted an Iranian drone ground control station near the port city of Bandar Abbas, located along the Strait of Hormuz. The U.S. military first shot down four Iranian attack drones preparing to launch an attack, then launched a precision strike on the control station. The official emphasized that the station was preparing to launch a fifth drone at the time, and that the U.S. action was entirely defensive, aimed at "maintaining the existing ceasefire," and that the operation was carefully considered.

(ii) Iran retaliates swiftly: strikes US military bases in retaliation

Iran's Tasnim News Agency, citing a statement from the Revolutionary Guard, reported that shortly after the US military launched its early morning attack, the Revolutionary Guard located and struck the US base from which the attack originated. The Revolutionary Guard explicitly stated that the attack was a "direct response" to US operations near Bandar Abbas airport. While the report did not specify the exact location of the US base or the extent of the damage, this counterattack signifies that the military confrontation between the two sides has escalated from a drone-based contest to a direct strike on each other's military facilities.

(iii) Other countries in the region were also affected.

It is worth noting that Kuwait, which hosts a large US military base, has stated that it is responding to missile and drone attacks, but has not yet specified the source of the attacks. Meanwhile, Israel, currently engaged in fierce fighting with Iranian-backed Hezbollah militants in southern Lebanon, has also reported alarms regarding hostile aircraft activity in its northern region. This indicates that the conflict between the US and Iran has spilled over, further complicating the security situation throughout the Middle East.

III. Trump's tough stance: Rejecting reports of the agreement, threatening Oman

(a) Denying that a compromise agreement is about to be reached

Just hours before the outbreak of military conflict, US President Trump publicly refuted a report by Iranian state television during a cabinet meeting open to the media. The report claimed that an informal draft agreement had been reached between the US and Iran, the main content of which was to restore commercial shipping in the Strait of Hormuz to pre-war levels within a month, with Iran and Oman jointly managing shipping in the strait. Trump made it clear that he was "not satisfied" with this so-called agreement and emphasized that the US was not currently discussing any easing of sanctions against Iran.

(ii) "That's international waters; nobody can control it."

At the meeting, Trump declared in his characteristically assertive tone that the Strait of Hormuz should not be controlled by any single country. He stated bluntly, "That's international waters, and Oman must play by the rules like other countries, or we'll blow them up. They understand that, so it's fine." This statement was interpreted by some as a veiled threat to Oman—despite decades of military and economic cooperation between the US and Oman. Neither the White House nor the Omani embassy in the US immediately responded, and the Iranian mission to the UN also remained silent.

IV. Market Reaction: Oil prices rebounded immediately, while the stock market fell under pressure.

Following reports of mutual airstrikes, the international oil market reacted swiftly. U.S. crude oil futures prices rose more than 4% in Asian trading on Thursday compared to Wednesday's settlement price, after a sharp drop of 5.5% the previous day (Wednesday). Simultaneously, global stock markets generally declined, while the U.S. dollar strengthened due to heightened risk aversion. Market analysts pointed out that the Strait of Hormuz is one of the world's most important oil shipping routes, and any military conflict in the region would directly impact energy supply expectations, thus triggering sharp fluctuations in oil prices. This escalation of the conflict has undoubtedly exacerbated the already fragile global energy market.

Event Summary: The ceasefire agreement is on the verge of collapse, and hopes for peace have once again faded.

Looking back at the ins and outs of this incident, it's clear that the ceasefire agreement maintained by the US and Iran since early April was on the verge of collapse. Trump's public denial of the so-called "Hormuz Agreement," and the subsequent mutual airstrikes, not only directly weakened the possibility of reaching a peace agreement through diplomatic means, but also forced other countries in the region (such as Kuwait, Israel, and Oman) into a broader tension.

Analysts believe that both sides are currently showing a reluctance to compromise, and low-cost, high-deterrence strike methods such as drones and missiles are likely to continue to be used for some time to come. Whether the international community can intervene in time to mediate and prevent the conflict from escalating into a full-scale war will be the focus of attention in the coming days.

Frequently Asked Questions

Question 1: Did a ceasefire agreement actually exist between the US and Iran? What were its contents?

Yes. According to previous reports, the United States and Iran reached a fragile informal ceasefire agreement in early April this year. The core of the agreement was a cessation of direct strikes against each other's military facilities and forces to reduce military tensions around the Strait of Hormuz and create conditions for potentially broader negotiations. However, this agreement was not made public in a formal written form, nor was it confirmed by international organizations such as the United Nations, thus its binding force is very limited. The outbreak of this conflict demonstrates that this ceasefire arrangement lacks effective monitoring and a foundation of trust in its actual implementation, and any preemptive action by either side could lead to the rapid collapse of the agreement.

Question 2: Why did Trump publicly deny reports of the "Hormuz Agreement"? What was he worried about?

Reports that Trump denied included claims that the US and Iran had drafted an informal proposal to transfer shipping control of the Strait of Hormuz to both Iran and Oman. Trump denied this for several reasons. First, he wanted to avoid giving the false impression that the US was making concessions to Iran, especially given his consistent advocacy of a policy of maximum pressure on Iran. Second, he worried that acknowledging the existence of such a draft might be interpreted by his domestic political opponents as weakness towards Iran in an election year, thus damaging his political image. Furthermore, Trump's emphasis that "no country can control the Strait of Hormuz" was effectively a warning to both Iran and Oman—the US would not accept any arrangement that excluded US influence over the strait's management, nor would it tolerate Oman's bias towards Iran on this issue.

Question 3: What role did Oman play in this conflict? Why did Trump publicly threaten Oman?

Oman has long been an important "messenger" and mediator between the US and Iran. Due to its geographical proximity to the Strait of Hormuz and its relatively pragmatic diplomatic relations with Iran, Oman has repeatedly provided a venue and channel for secret negotiations between the two sides in recent years. The "joint management of the Strait by Iran and Oman" mentioned in Iranian state television reports is likely a tentative proposal conveyed through Omani channels. Trump's public threat to Oman stems from his suspicion that Oman may have sided with Iranian interests during the mediation process—for example, proposing to exclude the US from shipping management issues. This is effectively a stern warning to Oman, reminding it not to cross the red line drawn by the US.

Question 4: What is the logic behind the sharp drop and subsequent surge in oil prices after the news broke?

On Wednesday, the day before the conflict erupted, U.S. crude oil futures plunged 5.5%, primarily due to market expectations that a de-escalation agreement between the U.S. and Iran was imminent, reducing military risks in the Strait of Hormuz. This expectation prompted speculative funds to massively sell off long positions in crude oil, causing a short-term price crash. However, when news broke that Trump publicly denied any agreement and that both sides had launched airstrikes against each other, market sentiment instantly reversed—investors realized that peace had not been achieved, and the conflict was escalating. Since approximately 20 million barrels of crude oil pass through the Strait of Hormuz daily (accounting for about 20% of global seaborne oil), any military conflict could lead to supply disruptions. Therefore, panic buying quickly drove oil prices back up, rising by more than 3%.

Question 5: What kind of chain reaction will this conflict have on other countries in the Middle East?

First, Gulf states like Kuwait and the UAE will face direct security threats. These countries not only host US military bases but also face Iran across the sea, making them vulnerable to being drawn into a retaliatory cycle between the US and Iran. Kuwait has already reported missile and drone attacks, which could very well be just the beginning. Second, fierce fighting is underway between Israel and Hezbollah, an Iranian-backed militia, in southern Lebanon. An escalation of the US-Iran conflict could prompt Iran to increase its military aid to Hezbollah, leading to a further expansion of the conflict on the Israeli-Lebanese border. Finally, "mediating" states like Oman will face a dilemma—continuing to act as a mediator could incur US displeasure, while completely siding with the US could damage relations with Iran. Overall, this conflict is likely to disrupt the already highly unstable geopolitical balance in the Middle East, triggering wider instability.

At 15:15 Beijing time, US crude oil is currently trading at $91.05 per barrel.