The naval blockade is back. Two tankers were hit by missiles in the Gulf of Oman, and Iran and the UAE can’t agree on whether they were legitimate targets or just ships in the wrong lane. Britain has just added the Revolutionary Guard to its list of terrorist organizations, and the IMF’s rosiest post-war forecast is already out of date. Also in this edition: Iran’s fraying relationship with its old back channel, Oman.
And don’t forget to check out the latest Iran Briefing podcast. In this edition I’m joined by Scott Wilcox, Senior Advisor at the Sicuro Group, a global risk management and operational resilience firm. We discuss how the war has affected business in the region – and why Iran’s cyber and disinformation campaigns worry Scott more than its missiles.
You can read it in the Arabic here, and check out MBN’s flagship Arabic-language Alhurra news platform (also in English).
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QUOTE OF THE WEEK
Iran has always been the GUARDIAN of the Strait and will remain so FOREVER.
Iranian Foreign Minister Abbas Araghchi
TOP OF THE NEWS
The Fight Over Who Controls Hormuz
U.S. military strike in Iran yesterday. Photo: AFP.
Control of the Strait of Hormuz has become the defining issue of the war. At the center of the dispute is a single, oddly worded clause: paragraph five of the Memorandum of Understanding signed in mid-June, which commits Iran to use its “best efforts for the safe passage of commercial vessels.” Michael Singh, a Middle East specialist at the Washington Institute for Near East Policy, has argued that the wording of the MOU “hews much more to what Iran wanted” by placing responsibility for the strait’s safety in Tehran’s hands rather than affirming it as an international waterway open to all.
The U.S. Navy imposed a blockade on Iranian shipping from April 13 to June 18, lifted it as part of the ceasefire, and is reinstating it this week. Iran, for its part, has spent the war asserting the opposite claim: that ships need its permission and must follow its approved routes, and that vessels that don’t comply are legitimate targets. Traffic through the strait has cratered as a result: Just 14 ships crossed on Sunday, down 60 percent from the 37 that crossed the same day a week earlier, against more than 100 ships a day before the war began.
The past 24 hours have given us a preview of how volatile the fight remains. U.S. President Donald Trump opened by proposing that Washington manage the Strait and charge a 20 percent toll on cargo passing through — only to abandon the idea a day later, saying he would replace it with “Trade and Investment Deals” that Gulf states would make into the United States instead.
Iran’s Foreign Minister Abbas Araghchi met Washington’s claim with a rival one: he asserted on X that “Iran has always been the GUARDIAN of the Strait and will remain so FOREVER,” disputing the idea that the U.S. gets to hold that title, before separately dismissing Trump’s specific number as excessive: “20% is of course too much. We will be fair.” Retaining the underlying idea that safe passage might carry some cost, he rejected Washington’s claim to be the one imposing and collecting the fees.
The IRGC said it struck two “offending” supertankers that had ignored warnings and switched off their transponders, while the UAE’s defense ministry gave a different account of the same event: The Mombasa and Al Bahiyah were targeted by two Iranian cruise missiles while transiting the southern shipping lane in Omani territorial waters, killing one Indian crew member and wounding eight others.
Britain Draws a Line on the IRGC
Burnt-out ambulances in a parking area along a street in the Golders Green neighbourhood of north London on March 23, 2026, after the volunteer ambulances run by a Jewish organization were set on fire overnight. Photo: AFP
Britain’s decision to proscribe the IRGC as a terrorist organisation marks a watershed moment after years of hesitation over how directly to confront Tehran on British soil. The designation, made under new powers in the U.K.’s National Security (State Threats) Act, follows a string of attacks the government links to Iranian state activity in Britain, including the arson of four Jewish community ambulances in London in March. MI5, Britain’s internal security service, identified at least 20 potentially lethal Iranian-backed plots against people in the U.K. in the past year. Prime Minister Keir Starmer said the new powers “will make it easier to prosecute and lock up anyone carrying out their dirty work here in Britain,” while Home Secretary Shabana Mahmood said she had “rapidly designated three groups so those working for them will be tracked down and put behind bars.” Under the designation, support for or membership in the Revolutionary Guard can now carry up to 14 years in prison, with acts of sabotage carrying up to life. Iran’s foreign ministry condemned the move, calling it a “ridiculous, provocative act that violates international law and the United Nations Charter” and claiming that “Britain itself hosts and supports terrorist and violent networks and groups.” Watch whether Tehran retaliates by escalating the same kind of plots against Iranian exiles and dissidents in the UK that prompted the designation in the first place, or by moving against any British nationals still inside Iran, since London withdrew its embassy staff from Tehran in February and has no diplomats there to target.
The IMF’s Forecast Already Looks Out of Date
Photo: Reuters/Dado Ruvic
The IMF’s assessment of the damage the war will inflict on the global economy already looks contingent on an out-of-date scenario. When the fund issued its July update, trimming global growth to a still-respectable 3 percent for 2026, it built the forecast on the assumption that the Strait of Hormuz would reopen “later this month” and that shipping conditions would return to something like normal by next March. That estimate was published five days before this week’s blockade reinstatement and tanker strikes.
Oil prices are already expected to average $89 a barrel this year, 9 percent higher than the IMF projected back in April, and global inflation is projected to climb to 4.7 percent in 2026, up from 4.1 percent the year before, reversing two years of progress against rising prices. The fund has so far cushioned the blow to its outlook by pointing to resilience elsewhere: countries drawing down existing oil stockpiles, non-Gulf oil exporters ramping up production, and a boom in AI-linked investment offsetting the energy shock in economies exposed to it.
Oman’s Relations With Iran Deteriorate
Oman’s Sultan Haitham bin Tarik (R) walking with Iranian Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf following their meeting in Muscat three weeks ago. Photo: AFP
In its latest attacks on Oman, Iran targeted three Liberia-flagged oil tankers off Oman’s coast in the Strait of Hormuz.
The three strikes on July 14 were the latest in a growing list of Tehran’s attacks on Muscat, the only Gulf Arab country with which it had enjoyed cordial relations for decades.
I asked my colleague Abubakar Siddique, a senior MBN correspondent, to explain why Tehran and Muscat are at loggerheads.
Here is what he told me:
Oman has adhered to strategic neutrality in its foreign policy. It has always resisted joining the five neighboring Sunni Arab monarchies in viewing Iran’s Shiite clerical regime as a threat and an enemy.
Instead, Muscat cultivated cordial relations with Tehran and repeatedly served as a back channel to help negotiate its disputes with the United States.
Muscat maintained its neutrality after the outbreak of Iran’s war with the U.S. and Israel.
Oman, Iran’s maritime neighbor across the narrow Strait of Hormuz, has faced pressure from Washington to sever ties with Tehran.
But Muscat has now become a target of Iranian drones and missiles despite continuing to talk to Tehran about its plan to manage shipping through the strategic waterway.
Since the beginning of the war, Tehran has used the Strait of Hormuz as a key source of leverage. It has closed the waterway to choke global energy supplies and pressure its Gulf Arab neighbors, which supply some 20 percent of the world’s oil and gas through the strait.
The Memorandum of Understanding Iran signed with the U.S. last month said Tehran will “conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz.”
In effect, however, Tehran insisted on controlling maritime traffic by requiring commercial vessels to use only the lane closest to its coast within Iranian territorial waters. To reinforce its control, Iran’s powerful Islamic Revolutionary Guard Corps repeatedly targeted ships that used a lane closer to the Omani coast.
Tehran expressed its anger toward Oman by targeting U.S. military sites on Omani soil on July 12. Iranian officials said the strikes were in retaliation for American airstrikes along the country’s southern coast.
“Oman expresses its profound dismay at these irresponsible acts,” the country’s Foreign Ministry said in a statement after it summoned the Iranian ambassador following the strikes. The statement added that Muscat “underscores the imperative of adhering to the provisions of state sovereignty, good neighborliness and non-interference in internal affairs.”
Analysts see Iran as pushing Oman to the wall by coercing it to join Tehran’s vision for managing the Strait of Hormuz, which Oman, the U.S., the Arab Gulf states and the rest of the international community oppose.
“The Iranians are overplaying their hand,” Anna Jacobs, a nonresident fellow at the Arab Gulf States Institute, told AFP. “Oman will not accept this.”
