Welcome back to the MBN Iran Briefing. You can read it in Arabic here, and check out MBN’s flagship Arabic-language Alhurra news platform (also in English).
Here is what you need to know this week:
The U.S. and Iran have paused hostilities once again (though precisely why is unclear). Netanyahu’s Washington visit this week will show whether Israel rejoins the fray if strikes resume. Oman’s push to reopen Hormuz collides with a tanker that collided with a mine, while new fronts open with Ukraine over the Caspian and the Houthis over Saudi Arabia. Iran’s currency is testing whether its pullback from a record low holds or reverses again.
Find out more below, and share your thoughts, analysis, and predictions with me at ailves@mbn-news.com. If you were forwarded the MBN Iran Briefing, please subscribe.
And don’t forget to check out the latest Iran Briefing podcast. In this edition I’m joined by MBN’s Editor-in-Chief Leila Bazzi, just back from spending time in the region, and Senior Correspondent Abubakar Siddique, as we take up how five months of war have turned Iran’s fight from one with the U.S. and Israel into one with its Arab neighbors, why Tehran’s own hardliners may be overplaying their hand, and what’s really happening in Beirut and Baghdad behind the official talking points. Leila also tells us why she thinks the region’s real test ahead isn’t about redrawing borders at all, but about who ends up controlling the gates.
QUOTE OF THE WEEK
Every column of smoke in the region means that a U.S. military, security, or financial center has been targeted.
Mohammad-Bagher Zolghadr, Secretary of Iran’s Supreme National Security Council
TOP OF THE NEWS
1. Another Pause
Different reasons have been offered for the pause in fighting between the U.S. and Iran, which is in its fourth day after nearly two weeks of renewed attacks by both sides. On NBC’s weekly program Meet the Press yesterday, UN ambassador Mike Waltz said: “What the president is doing right now, as we’ve seen all along, is giving some talks some space. Talks are ongoing; they’re happening at every level.” Other sources claim that the pause followed a White House meeting where senior officials raised concerns that a wider campaign could dangerously strain the Patriot interceptor stocks protecting U.S. troops and allies. Moreover, Axios reports that CENTCOM Commander Admiral Brad Cooper suggested that bombing be halted “because it has reached the limit of its effectiveness.”
The administration says it’s staying “locked and loaded,” and that its naval blockade of Iran remains in full effect despite the pause. CENTCOM says it prevented 12 commercial vessels from running the blockade, and disabled one, the Mozambique-flagged M/T Lavine, over the weekend. This week Israeli prime minister Benjamin Netanyahu visits Washington for the first time since the war began five months ago, and we’ll see if Israel is pulled more directly into the war. Israel has sat out the latest round of strikes since it resumed in mid-July, a restraint that presumably suits Washington as much as Jerusalem by keeping the fight narrowly focused on Iran and the Strait of Hormuz rather than widening it into an all-out Israeli-Iranian war.
Two things to watch for: what Netanyahu’s Washington visit produces in terms of Israel’s role in the war, and further updates from Central Command on stopping blockade-running vessels.
Vessels transiting through the Gulf of Oman off the coast of Muscat/AFP
2. Talks on Hormuz While a Tanker Blows Up
Oman’s deputy foreign minister visited Tehran Friday and Saturday for talks on managing the Strait of Hormuz, which has been closed to shipping since earlier this month and will stay shut until what Tehran calls U.S. military interference in the waterway ends. Earlier this month, Oman proposed managing the strait through two separate corridors, a southern route through Omani waters open to free navigation, and a northern route through Iranian waters requiring Tehran’s advance permission. The plan has yet to be finalized. The talks made progress on “common principles and operational mechanisms” and were “useful,” Iran’s foreign ministry says, though “no change has occurred in the transit situation in the strait.” Revolutionary Guard-run Tasnim News reported that a tanker that strayed from Tehran’s designated corridor struck a naval mine and exploded yesterday. Neither CENTCOM nor the UK’s maritime security authority UKMTO has confirmed the incident yet. Tehran has repeatedly warned that ships leaving its route will bear the consequences.
Three things to watch for: whether Oman and Iran hold a further round of talks this week, whether there’s any further identification of the tanker and shipping line involved in yesterday’s blast, and whether international shippers begin rerouting around the strait if another mining incident takes place.
Ukrainian President Volodymyr Zelensky/AFP.
3. Enter Ukraine
Ukraine’s security service says it struck an Iranian vessel in the Caspian Sea on Saturday that was shipping military cargo to Russia while evading international sanctions. This came as part of a wider set of strikes launched by Kyiv at vessels transporting equipment “in cooperation with Iran.” The Shahed-type drones Tehran has supplied to Russia are now used in mass nightly attacks on Ukrainian cities.
Iran’s foreign ministry says the strike killed one sailor and wounded another, calling it “an act of aggression that could further inflame and expand the flames of war.” Russia’s foreign ministry names the vessel as the dry cargo ship Ana, sailing from the Russian port of Astrakhan with what it calls civilian cargo rather than the military shipment Ukraine described, and says its foreign minister Sergey Lavrov called Iran’s foreign minister Abbas Araghchi to offer condolences over the sailor’s death.
The Caspian Sea, bordering on both Russia and Iran as well as Azerbaijan, Kazakhstan and Turkmenistan, is a new geographic front for this war. It had not previously featured in five months of fighting. Tehran has already summoned Ukraine’s chargé d’affaires in protest.
Two things to watch for: whether Iran takes retaliatory action against Ukrainian or Ukrainian-linked targets, and whether Ukraine’s chargé d’affaires is expelled or the relationship with Tehran is downgraded further.
People sit in a fishing boat sailing the Bab el-Mandeb Strait off Yemen’s southern Taiz province on Saturday/AFP.
4. Enter the Houthis
On Saturday, the Houthis announced that they had launched dozens of missiles and drones at facilities linked to Aramco, Saudi Arabia’s national oil company, in the Saudi Arabian cities of Jizan and Yanbu. The attacks were cast as retaliation for Saudi airstrikes on the Houthi-held port city of Hodeidah and nearby Kamaran Island. The Houthis say their naval blockade against Saudi shipping remains in place.
The Bab al-Mandeb Strait, which normally carries about 12 percent of global trade and a quarter of global container traffic, has already been disrupted once, when Houthi attacks beginning in November 2023 cut oil flows through it from 9.3 million barrels a day in 2023 to roughly 4.1 million in 2024.
Flows had climbed back to about 7.4 million barrels a day by June as Saudi Arabia rerouted crude through Red Sea terminals in response to the closure of the Strait of Hormuz. Nine tankers have now made U-turns since the renewal of hostilities. A full closure of Bab al-Mandeb alongside Hormuz could put a quarter of the world’s oil and gas supply at risk.
Until Saturday, the Houthis’s renewed campaign against Saudi-bound shipping had targeted tankers at sea. The strikes on Jizan and Yanbu were its first attack on onshore infrastructure. Saudi civil defense sounded early warning alerts in both cities early Saturday and lifted them again minutes later. Satellite images published yesterday show smoke still rising over Jizan’s roughly 400,000-barrel-a-day Aramco refinery a day after the strike. Iran’s foreign minister says Tehran has offered to play “a constructive role” if talks develop between Yemen and Saudi Arabia. The Houthis have warned that they will not hesitate to expand their operations further depending on how the coming days unfold. They describe the exchange as “siege-for-siege and escalation-for-escalation.”
Three things to watch for: whether Iran’s mediation offer goes anywhere, whether the Houthis strike further inside Saudi Arabia, and whether the renewed blockade threat pushes Bab al-Mandeb traffic back down from its recent recovery.
5. The Rial Pulls Back from its Record Low, Barely
The rial was trading at 1,890,500 to the dollar on Sunday, as the government finances a widening wartime deficit through central-bank money creation while the naval blockade chokes oil exports and tax revenue. That is actually a pullback from the currency’s all-time record of 1.941 million to the dollar, which it hit earlier this month after Iran’s government put the war’s damage at $300 billion. The rial has moved in step with the war. It stood near 1.35 million to the dollar at the start of the year, jumped to 1.72 million after the war began on February 28, eased back to around 1.46 million as wartime disruption temporarily cooled demand for foreign currency, then climbed again after U.S. president Donald Trump threatened in April to strike Iran’s infrastructure. The memorandum of understanding between Tehran and Washington pulled the rate back to 1.53 million before renewed tensions reversed those gains.
Watch whether any of this week’s flashpoints — including Netanyahu’s Washington visit, the Hormuz talks and tanker fallout, the Houthi-Saudi escalation, or the Caspian dispute with Ukraine — tips the war toward renewed strikes and sends the rial back toward its July record low, or whether a period of relative calm lets the Iranian currency hold at its current value.
