US-Iran Ceasefire Agreement on the Brink of Collapse, Most Intense Confrontation Since the Ceasefire

The U.S.-Iran military confrontation escalated sharply on May 28. Iran's Revolutionary Guards announced an attack on an American air force base in the early morning, while the U.S. military also launched a strike on a military target inside Iran and intercepted a drone launched from Iran. This is the most intense exchange of fire since the ceasefire came into effect on April 8, with direct impacts on the security of the Strait of Hormuz and global energy supplies.

According to Reuters, the Revolutionary Guards claimed to have struck an American air force base at 4:50 am local time without specifying the exact location. The Revolutionary Guards warned that if the U.S. repeats its so-called "aggressive actions," they will face "more decisive" responses.

Additionally, according to Reuters citing a U.S. official, the U.S. military carried out a strike on a military target within Iran that was considered a threat to U.S. forces and commercial shipping in the strait. Iran's Fars News Agency reported three explosions around 1:30 am east of the Bandar Abbas port, with the specific cause yet to be officially confirmed.

Kuwait's military stated that they are dealing with hostile missile and drone threats.

Brent and WTI crude oil futures increased intraday gains to more than 2%, hitting a new high for the day.

Continuous Exchange of Fire in 48 Hours

The beginning of this round of confrontation can be traced back to May 25. The U.S. Central Command launched an attack on two Revolutionary Guards vessels deploying sea mines in the Strait of Hormuz and an air defense missile site tracking U.S. aircraft in Bandar Abbas port on that day, citing "self-defense" as the reason.

Iranian domestic media reported that four Revolutionary Guards members were killed in the attack that day, but Tehran has not officially confirmed it. The Revolutionary Guards later claimed to have shot down a U.S. MQ-9 drone and fired on an F-35 fighter and an RQ-4 surveillance drone, with no response from the U.S. side.

The Iranian Foreign Ministry accused the U.S. of violating the ceasefire agreement in the past 48 hours, "repeatedly harassing Iranian merchant ships" in the Hormozgan province waters, and stated that "it will not ignore any act of aggression."

Strait Security Affects Nerves of Energy Market

Bandar Abbas port is adjacent to the Strait of Hormuz and is one of Iran's most important ports and key nodes for oil export. The U.S. strike explicitly mentioned that the target posed a threat to commercial shipping in the strait, indicating that the considerations of military action have gone beyond the bilateral military confrontation level.

About 20 million barrels of crude oil pass through the Strait of Hormuz daily, accounting for a significant proportion of the global seaborne oil trade. Any military escalation in this region could increase the risk premium for crude oil prices.

For the energy market, investors need to closely monitor whether the strait's navigation is substantially affected and whether major oil-producing countries release signals to stabilize supplies.

Diplomatic Window Has Not Yet Closed

While military tensions intensify, diplomatic channels are still functioning. Iran's Speaker of Parliament, Foreign Minister, and Central Bank Governor have arrived in Doha to conduct negotiations on issues related to the Strait of Hormuz.

However, how long the parallel situation of diplomacy and military can last depends on several key variables: where exactly the Revolutionary Guards struck the U.S. base, how much damage it caused, and how Washington will respond.

As of press time, Iran has not issued an official response to the U.S. strike on that day, and the U.S. side has not disclosed more details. The subsequent statements of both parties will be a key signal in determining whether the ceasefire agreement can continue to exist.