THE BLOCKADE RETURNS, AND THIS TIME IT COMES WITH A 20% TOLL

• Iran and Oman are still talking, technically. Foreign Minister Araghchi confirmed after a Saturday visit to Muscat that political and technical consultations on Hormuz management will continue 9AAM Iran says to continue talks with Oman on managing Hormuz navigation. But Iran's own Foreign Ministry simultaneously said US pressure on Oman prevented any agreement from being reached 4CRD Trump declares US ‘Guardian of Hormuz,' vows to charge 20 percent transit fees. Oman's Foreign Minister Badr Albusaidi expressed hope for "full implementation" of last month's framework. That framework is what Trump called "over" last week. Oman is trying to keep a door open that both principals are boarding shut from opposite sides.

• Yemen just blew up another front. Saudi Arabia struck Sanaa International Airport for the first time since 2021, targeting runways to prevent an Iranian Mahan Air passenger plane from landing 8CRD Yemen declares end of de-escalation, vows to 'punish' Saudi Arabia over airstrikes on Sanaa airport. The Ansarallah-led Yemeni Armed Forces (YAF) formally declared the "phase of de-escalation" with Riyadh over and promised punishment. The plane diverted to Hodeidah. The Yemeni Foreign Ministry called it a US-Israeli-backed declaration of war 8CRD Yemen declares end of de-escalation, vows to 'punish' Saudi Arabia over airstrikes on Sanaa airport. This is a single-source report from Ansarallah-aligned outlets and The Cradle, and the Saudi side has not responded substantively as of compile time. But if accurate, it opens a third active front in a conflict that is already stretched across 3,000 kilometres. Watch this closely.

• US weapons stockpiles are the constraint nobody in Washington wants to talk about publicly. CNN's reporting from Sunday confirms that by the time full-scale fighting paused in April, the Pentagon had burned through at least half its Terminal High Altitude Area Defense (THAAD) interceptors, nearly half its Patriot interceptors, and about 30 per cent of its Tomahawk land-attack missiles 15CNN Iran war heats up while US weapon stocks remain depleted, risking military’s ability to fight future wars. Current replenishment rates are approximately 15 Tomahawks and 20 Patriots per month. No THAAD deliveries are scheduled for all of 2026 15CNN Iran war heats up while US weapon stocks remain depleted, risking military’s ability to fight future wars. Congress has not appropriated a single dollar of supplemental funding to replace any of it. The resumption of the blockade and the new strike cycle mean those numbers are going down again, not up.

• Iraq's oil export collapse is forcing a three-year infrastructure pivot. Iraqi Prime Minister Ali al-Zaidi is expected to announce a deal to rebuild the historic Kirkuk-Baniyas pipeline to Syria's Mediterranean coast during a White House visit next week 10CRD Iraq, Syria, US working to rebuild Kirkuk - Baniyas Pipeline to bypass Hormuz. Iraqi seaborne oil exports fell 92 per cent in May compared to the prior year average, according to energy analytics firm Vortexa, because virtually everything went through Hormuz 10CRD Iraq, Syria, US working to rebuild Kirkuk - Baniyas Pipeline to bypass Hormuz. The pipeline would take up to three years to complete and requires a US corporate consortium to finance it. This is the medium-term shape of a post-Hormuz energy architecture, and it tells you how long Washington thinks this disruption could last.

• A US congressman is publicly calling Israel's military liars, and it is landing differently than usual. California Democrat Ro Khanna said on NBC's Meet the Press that the Israel Defense Forces (IDF) "is lying" about his 20-minute detention by armed settlers and soldiers in the West Bank 14GDN US congressman says ‘IDF is lying’ about his detention by settlers and soldiers. He named a specific settler, Yinon Levi, who he said killed a Palestinian activist on video without prosecution, and called on Netanyahu to open an investigation into the four IDF officers involved. Netanyahu called the settlers "juvenile delinquents." The row itself is not new, but a sitting US congressman going on Sunday morning television and directly accusing an allied military of lying while the US is simultaneously running a war in which Israel is a key regional partner is the kind of friction that, at volume, starts to matter.

The market snapshot is frozen at Sunday close, before today's blockade announcement and before most of the Iranian strike news landed. So take the numbers with that caveat. What they do show is instructive anyway: the Oil Volatility Index (OVX) sat at 61.91 on Sunday, up sharply from 40.33 the previous week. That is the market saying "we know something bad is coming" even before the blockade formally resumed tonight. Brent was already up more than 3 per cent on Monday per BBC reporting 5BBM US and Iran trade fire as tensions rise over Strait of Hormuz, but the settlement price in the snapshot has not yet reflected it. Gold remains above $4,000, and the gold-to-oil ratio at 51.60 remains elevated. Historically, when gold prices oil this expensively, the market is pricing a scenario in which oil supply disruption persists but economic demand softens. That is exactly the scenario unfolding now. Defence stocks are drifting lower across the board, which sounds counterintuitive until you realise the market is pricing munitions depletion as a constraint on the war's intensity, not a driver of contractor revenues.

The IMF downgraded its 2026 global growth forecast to 3 per cent, explicitly citing the Iran war's energy shock, and the divergence within that number is where the pain lands 16APW America In Focus: Fed officials divided on US inflation views; US home prices hit all-time high. The US is forecast to grow 2.3 per cent. The eurozone is forecast to grow 0.9 per cent, down from 1.4 per cent last year. European households are absorbing higher energy costs in a way American households, shielded by domestic production, largely are not. The Federal Reserve's rate-setting committee is split on whether to hike or hold, with exactly half its members backing rate rises by year-end, specifically because they do not believe inflation will cool until the Iran war ends 16APW America In Focus: Fed officials divided on US inflation views; US home prices hit all-time high. The problem is that the war just got considerably longer tonight. US home prices hit an all-time high median of $440,600 in June, up for 36 consecutive months 16APW America In Focus: Fed officials divided on US inflation views; US home prices hit all-time high. The resumption of the blockade and the associated energy price spike will feed into heating oil and diesel costs, which will feed into freight costs, which will feed into consumer prices. That chain is not theoretical. It is already moving.