Ceasefire Frays as US Strikes Iran for Second Night Running

Synopsis

The United States and Iran have signed a tenuous accord to end four months of devastating war on June 17, 2026 – and it is now under the most severe test yet. US troops have carried out air raids on Iranian targets for the last two nights and Iran's Islamic Revolutionary Guard Corps has carried out drone and missile attacks on Kuwait and Bahrain. The Strait of Hormuz is the main flash point where around 20 per cent of the world's seaborne crude oil flows.

The Battle of Ceasefire Frays has been going on for two days now, with the United States launching strikes against Iran.

A Deal Under Siege

Air raid sirens went off twice early on the morning of June 28 in Bahrain, a Gulf island nation home to the United States Navy's Fifth Fleet, prompting people to seek shelter.

The Bahraini Interior Ministry issued the warning to head to the nearest safe place in the country on Sunday morning local time, which was the second instance of warning sirens sounding in the kingdom. It was a vivid reminder of the fragility of peace that can come so rapidly out of such a peace deal as to spark new hostilities.

The War's Beginn — And its Standing

The United States and Israel have been at war with Iran and its regional allies since 28th February 2026. There has been a Syrian war since the dawn of the conflict when US-Israeli airstrikes targeted Iranian military and government installations, leading to the death of Iranian officials and supreme leader Ali Khamenei.

Iran retaliated to Israel, US-backed Arab nations and US bases with missiles, drones and, blocking the Strait of Hormuz, the global economy and sparking fuel crisis.

Trump and Iranian president Masoud Pezeshkian signed a memorandum of understanding on June 17 to bring an end to the war in the G7 summit, where Trump signed it while he dined with French President Emmanuel Macron in the Palace of Versailles. The MOU demanded a 60-day truce, a plan for a lasting peace and reopening of the Strait of Hormuz.

The Ceasefire Breaks Down

That has not been the case. In the mission on June 26, six U.S. planes dropped bombs on four targets inside Iran, including radar sites and storage sites for missiles and drones in the coastal region of Sirik, a senior U.S. official said.

President Donald Trump issued a threat towards Iran, stating that if Iran keeps on striking, the US may ‘have to use more force' and if it does, Iran will ‘no longer exist.'

Iran's reaction was quick. In Bahrain, the IRGC claimed that its forces had, "destroyed eight important bases of the United States military in the Ali al-Salem base in Kuwait and in the Fifth Fleet naval base in Port Salman in Bahrain. Kuwait's Foreign Ministry denounced the "flagrant violation of its sovereignty" and Bahrain's Defence Force stated its air defence forces were responsible for shooting down a number of Iranian missile and drone attacks, including ones aimed at civilians.

The Strait and the Economic stakes

The issue at stake in the standoff is control of the Strait of Hormuz. Charging that the Strait of Hormuz "is closed to shipping traffic again and will remain so unless Iran opens it, Foreign Minister Abbas Araghchi said Sunday that only Iran had the right to reopen the shipping lane and restore its pre-war traffic levels, and that "any attempt to adopt new or separate arrangements" would only create "the situation".

The potential for economic losses due to the continued closure is significant. The war on Iran was the biggest supply disruption in the history of the global oil market, the International Energy Agency (IEA) said, noting that the conflict had a similar impact on the oil market as the 1970s crisis in terms of supply shortages, currency volatility and inflation. The traffic through the strait had been dried up, except for a trickle, and in excess of 500 vessels were estimated to be waiting to leave the Gulf.

During the war, the price of Brent crude reached as high as about $120 per barrel, up from the pre-war price of $65 to $75 per barrel. After the ceasefire was announced, the price dropped to $83.88 per barrel.

Negotiations Continue in Switzerland

Though the exchanges of fire are not yet complete, there has been no complete blockage of the diplomatic channels. The ceasefire has been fragile since the signing of the memorandum of understanding, with Iran and the US accusing each other of violations, and now Iran and the US are to have technical talks in Switzerland.

According to official data, inflation in Iran reached its highest point in June at 88.6 per cent year-on-year, as a result of the conflict. The most important question of this conflict is whether the two parties can turn a war that is beginning to drag on into a settlement that will last.

The real issue of this conflict is whether a crux that is beginning to teeter can be turned into a settlement that will hold firm before the Strait of Hormuz becomes the fulcrum of another broader conflagration.