US and Iran Engage in Escalating Conflict: Sanctions Imposed, Threats Made, and Military Strikes Continue
Iran's Red Crescent Society said its members have been mobilized across the country following what it described as “enemy threats” to continue air strikes on Iran. The humanitarian organization said emergency and rescue teams are on alert to respond to potential attacks and assist affected civilians. Iran has declared that companies owned by Elon Musk operating in the Middle East, including SpaceX's Starlink satellite internet network, will be treated as military targets, according to Iran's state-linked Fars News Agency. The reported warning says Tehran reserves the right to target economic interests and facilities linked to Musk across the region as tensions with the United States continue to escalate. US Treasury Secretary Scott Bessent warned that Iran's actions in the Gulf would carry significant economic and financial consequences, saying Washington is prepared to impose costs on Tehran. In a post on X, Bessent said, “The Iranian regime will lose the zero-sum game it is playing,” and added that any damage inflicted on US allies in the Gulf would be compensated using funds drawn from Iranian accounts. India's shipping ministry said all 20 Indian crew members aboard the Guinea-Bissau-flagged tanker Jalveer are safe after a suspected US strike off the coast of Oman. The vessel issued a distress call after a fire broke out near its engine room and funnel while sailing near Oman's Shinas port, and the crew is being evacuated in coordination with the Royal Navy of Oman. India's foreign ministry said the ship was attacked by the US. The Indian government said all 20 Indian crew members aboard the Guinea-Bissau-flagged tanker MT Jalveer are safe after the vessel incident off Oman, with the Indian mission in Muscat coordinating rescue efforts with Omani authorities. At an inter-ministerial briefing on developments in West Asia, the government also announced Rs 10 lakh compensation for the families of the three Indian sailors killed in the attack on MT Settebello through the Seamen Welfare Fund Society. US Treasury Secretary Scott Bessent said Washington would use Iranian funds to cover damage caused by Tehran's attacks on US allies in the Gulf. In a post on X, Bessent warned that “any damage it inflicts on our allies in the Gulf will be paid for with funds extracted from Iranian accounts.” He also said any tolls paid to Iran's Persian Gulf Strait Authority would be offset using Iranian funds under US control. Ebrahim Rezaei, spokesman for the Iranian parliament's National Security and Foreign Policy Commission, said the United States - not Iran - would ultimately have to surrender in the ongoing confrontation. In a post on X, Rezaei wrote, “It is undoubtedly America that must surrender in this battle.” He added, “Trump has no more than two paths: either he must surrender, or he must surrender.” The World Bank lowered its global growth forecast for 2026 to 2.5%, warning that the ongoing Middle East conflict is weighing on economies worldwide through higher energy prices and inflation. It said global growth could slow to just 1.3% if disruptions to energy supplies trigger broader financial market stress. The bank cut forecasts for two-thirds of countries, with the sharpest downgrades affecting energy-dependent economies in the Middle East. Despite the weaker outlook, India is expected to remain the world's fastest-growing major economy, with GDP growth projected at 6.6% in 2026. India called on the United States to halt attacks on commercial shipping after three US strikes on Indian-crewed tankers this week, including one that killed three Indian sailors. Foreign Ministry spokesperson Randhir Jaiswal said New Delhi had summoned the US charge d'affaires and conveyed its “deepest concerns” over the attacks. “These attacks must cease and end,” Jaiswal said, urging a return to dialogue and diplomacy. The deaths aboard the tanker Settebello are the first reported fatalities since the U.S. blockade on Iran-linked shipping began in April, intensifying pressure on both countries ahead of a likely PM Modi-Trump meeting at next week's G7 summit. US President Donald Trump said additional military strikes against Iran are planned for later on Thursday, warning they will be “bigger” and “more powerful” than previous attacks. Speaking in a Fox News interview, Trump signaled a further escalation in the conflict as Washington increases pressure on Tehran. Oil prices climbed on Thursday after US President Donald Trump said Washington would hit Iran “very hard tonight” and signaled plans to take control of key Iranian oil and gas infrastructure. Brent crude rose 0.5% to $93.56 a barrel, while WTI gained 0.7% to $90.68 as traders weighed the risk of further supply disruptions. US President Donald Trump said Iran remains engaged in negotiations with Washington, but suggested Tehran's leadership is reluctant to make concessions. Speaking to Fox News, Trump said, “They are negotiating with us to make a deal, but they are proud.” US President Donald Trump said the United States is still engaged in talks with Iran but indicated that his preferred option would be to take control of Kharg Island, Iran's main oil export hub. Speaking to Fox News, Trump said his “preference” would be to seize the strategically important island, which handles the vast majority of Iran's crude exports. US President Donald Trump said the United States would strike Iran “VERY HARD TONIGHT,” claiming Tehran's navy, air force, air defenses and much of its offensive capability are already “GONE.” In a Truth Social post, Trump also threatened to take control of Iran's energy sector, saying the US would eventually seize Kharg Island and other key oil infrastructure sites and “assume total control” of Iran's oil and gas markets. U.S. forces struck and disabled the tanker M/T Jalveer with Hellfire missiles after the vessel allegedly violated Washington's blockade on Iran by attempting to transport Iranian oil. According to US Central Command, the tanker ignored repeated warnings and failed to comply with instructions from American forces before the strike targeted its engine room, rendering the vessel inoperable. India's Foreign Ministry said the US Navy attacked all three vessels involved in the incident near Oman. According to the ministry, two of the ships were sanctioned by the US Treasury's Office of Foreign Assets Control (OFAC), while the third was classified as a non-compliant vessel. The statement comes as India continues to seek information on missing Indian seafarers and presses for accountability over attacks on ships carrying Indian crew members. An explosion was heard off the coast of Iran's southern city of Sirik on Wednesday, Iranian state television reported. Authorities did not immediately provide details on the cause of the blast, and no information on casualties or damage was available. Iran and the United States are continuing negotiations on a preliminary agreement despite ongoing tensions and military exchanges, Iranian sources told Reuters. The talks reportedly include discussions on a mechanism for releasing billions of dollars in Iranian funds frozen abroad. India's Foreign Ministry said it expects the United States to take “due note” of New Delhi's protest over attacks on vessels carrying Indian seafarers. The statement comes after India formally raised concerns with US officials following incidents involving commercial ships in the Gulf region. A senior Indian government official said 562 Indian seafarers are currently serving aboard Indian-flagged vessels in and around the Strait of Hormuz. Mukesh Mangal, Additional Secretary in the Ministry of Ports, Shipping and Waterways, said 329 of them are on ships in the Persian Gulf west of Hormuz, while 233 are in the Gulf of Oman east of the strait. He added that more than 18,000 Indian seafarers are working across the wider Gulf region. The Kremlin called on all parties involved in the escalating conflict with Iran to exercise restraint and continue diplomatic efforts. Russia urged both sides to avoid further escalation and prioritize negotiations as the path to resolving the crisis. Moscow has repeatedly positioned itself as a supporter of a political and diplomatic solution, warning that continued hostilities could further destabilize the region. Three liquefied natural gas (LNG) tankers have exited the Strait of Hormuz and are heading to Asia after travelling with their transponders switched off, according to ship-tracking data from LSEG and Kpler. QatarEnergy-controlled tankers Lebrethah and Rasheeda, along with ADNOC-managed Marigold, reappeared on tracking systems on June 10 after previously disappearing from public monitoring data. Iran's Persian Gulf Strait Authority has instructed vessels that have already received transit permits to “be patient,” saying the Strait of Hormuz will remain closed until further notice, according to state media. The development follows Iran's announcement that it had shut the strategic waterway to all vessel traffic after fresh U.S. strikes, warning that ships attempting to transit could be targeted. Iran's Foreign Ministry condemned the latest U.S. strikes, saying they have rendered the ceasefire “practically meaningless.” In a statement, the ministry described the attacks as “illegal and criminal” and said they constituted a “flagrant violation” of international norms. Tehran warned that the strikes risk further escalating tensions and undermining diplomatic efforts. It added that “the responsibility for the extremely serious consequences of this criminal act lies with the leaders of the United States.” The overnight US-Iran attacks represent the most serious flare-up since the ceasefire began in April, according to Samir Puri, a Senior Fellow at the International Institute for Strategic Studies in Singapore. He warned that the situation is unlikely to calm down quickly and could spiral further unless diplomacy holds. “It’s the worst escalation of fighting and mutual attacks since the ceasefire began in April. So it has every possibility of spiralling into further escalation, but let’s hope that isn’t the case because there is still some commitment to diplomacy,” Puri told Al Jazeera. He added that US President Donald Trump and Defence Secretary Pete Hegseth view the attacks as “punishment for downing that Apache helicopter gunship and for Iranian non-compliance.” His remarks suggest that both sides are now entering a more confrontational phase, even as diplomatic efforts remain on the table. There is still a glimmer of hope for diplomacy in West Asia, with CNN reporting that US-Iran talks remain on track despite the latest overnight exchange of strikes. Citing a diplomatic source familiar with the developments, the report said discussions continued even as military tensions flared between the two sides. The prospect of renewed dialogue comes against a sharply worsening security backdrop. Merchant vessels and oil tankers operating near the Strait of Hormuz have continued to report attacks, raising fears of wider disruption to one of the world’s most critical shipping lanes. Adding to the anxiety, the UK Maritime Organisation flagged one such attack in Omani waters on Thursday. The developments underscore the fragile balance between ongoing conflict and attempts to keep diplomatic channels open. One person was killed and three others were injured after Israeli shelling and gunfire struck several areas across the Gaza Strip, including the Nuseirat camp, the Zeitoun neighbourhood and the town of Beit Lahia, Wafa reported. According to medical sources, one person was killed after Israeli forces bombed a residential apartment opposite the Egyptian camp, north of the Nuseirat camp in central Gaza. The latest attacks add to the continuing violence across the enclave. Malaysian low-cost carrier AirAsia X has postponed the launch of its planned Bahrain route, citing the worsening conflict in the Middle East. The airline had originally expected to begin operating the service in June. The route was intended to connect Kuala Lumpur with Bahrain and continue onward to London’s Gatwick airport. However, AirAsia X now says the service is likely to begin only in August or September, depending on market conditions. In a statement, the airline said the revised timeline reflects the broader regional uncertainty. The delay underscores how escalating tensions in the Middle East are already affecting travel and aviation plans across the region. Iran has said a cargo barge was struck by a US projectile in the Gulf of Oman early on Thursday, according to the Iranian governor of Sirik county cited by Mehr news agency. The incident adds to already heightened tensions in the region amid the wider military escalation. The vessel was a 150-ton cargo barge owned by local residents of Sirik and was carrying essential goods from the Omani port of Khasab, Governor Reza Shahidian said. He said the barge was hit about five nautical miles off Khasab. It is the third consecutive night of strikes after a brief period of relative calm, with the conflict now entering a fresh and more dangerous phase. The latest round of escalation began with an exchange of fire between Israelis and Iranians on the first night, followed by direct confrontation between the Americans and the Iranians on the second. Last night marked the third night of hostilities, during which Iranian territory was reportedly targeted by the Americans, prompting retaliatory strikes by Iran against US assets in Kuwait, Bahrain and Jordan. Reports also said explosions were heard and seen in the south of Tehran and in southern parts of Iran as the situation intensified further.