Iran Cuts US Diplomatic Channels as Bab al-Mandeb Threat Raises Global Trade Risks

Iran-US Conflict Escalates With Strait of Hormuz Deadline Near

Iran has cut diplomatic channels with the United States and warned of possible disruption around the Bab al-Mandeb Strait, placing a second major global trade chokepoint at risk as tensions escalate. The White House said only Donald Trump knows the next course of action as his 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz approaches.

Press Secretary Karoline Leavitt said Iran must “meet the moment and make a deal,” adding that the president alone would decide the response. Trump warned on Truth Social that “a whole civilization will die tonight” if Iran fails to comply, alongside threats targeting bridges and power plants.

Strikes, Infrastructure Damage and Regional Warnings

Multiple strikes were reported across Iran, including attacks on Kharg Island, through which nearly 90% of Iran’s oil exports pass. Railway operations in Mashhad were halted after warnings to avoid rail networks. Iranian sources also warned that attacks on power plants could leave Saudi Arabia and the wider region in darkness through retaliatory strikes.

Regional Diplomacy and Market Reaction

Countries including Pakistan, Egypt, and Turkey are pushing for a 45-day ceasefire framework, while explosions were reported in Tehran, Karaj, and near Erbil airport in Iraqi Kurdistan. Meanwhile, Brent crude rose 0.5% to $110 per barrel, and S&P 500 futures dipped 0.2%, reflecting rising market anxiety as the conflict intensifies.

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