Iran and US trade air strikes after Trump dismisses report of Hormuz deal
Escalation of Tensions and Impact on Global Markets
By Jana Choukeir, Enas Alashray and Phil Stewart
Overview of Recent Hostilities
DUBAI/WASHINGTON, May 28 (Reuters) - Iran's Revolutionary Guard targeted a U.S. airbase on Thursday after the U.S. military carried out what a Washington official said were strikes on an Iranian drone operation near the Strait of Hormuz, hours after President Donald Trump rejected a report he was close to a compromise deal with Tehran.
The escalation in hostilities highlighted threats to the tenuous ceasefire between the U.S. and Iran that took effect in early April, dampening hopes for a peace deal and sending oil prices surging again.
Details of the Military Strikes
The U.S. official, who requested anonymity to speak candidly about military operations, told Reuters the military shot down four Iranian attack drones and struck a ground control station in the port city of Bandar Abbas that was about to launch a fifth drone.
"These actions were measured, purely defensive and intended to maintain the ceasefire," the official said.
The Islamic Revolutionary Guard Corps said it targeted a U.S. base in response to what it described as an early morning U.S. attack near Bandar Abbas airport, Tasnim news agency reported. The IRGC said it targeted the U.S. airbase from which the attack on the control station near Bandar Abbas was launched, without identifying the base.
Kuwait - which hosts a large U.S. base - said it was responding to missile and drone attacks without saying where the attacks were coming from.
Israel, which has been fighting Iran-backed Hezbollah militants in southern Lebanon, also reported sounding sirens regarding hostile aircraft activity in northern Israel.
Market Reactions
Oil prices, having fallen 5% on Wednesday, rebounded after reports of the escalation in hostilities. U.S. crude futures gained more than 3%, while stocks fell and the dollar rose.
Trump's Position and Diplomatic Developments
Trump's Statement on the Strait of Hormuz
TRUMP SAYS NO COUNTRY TO CONTROL STRAIT
The war has killed thousands and sent global energy prices sharply higher since it began on February 28 with U.S. and Israeli strikes.
Trump has repeatedly said the end of the war is close but told media at a cabinet meeting on Wednesday he was not yet satisfied on a deal with Iran and the U.S. was not discussing easing sanctions on it.
He dismissed an Iranian state TV report that it had obtained an unofficial draft of an agreement to restore commercial shipping through the strait to prewar levels within a month, with Iran and Oman jointly managing traffic.
International Control and Threats
Trump said no single country would have control over the waterway, and appeared to threaten Oman, a country with which the U.S. has decades-long military and economic ties.
"Nobody's going to control (the strait)," Trump said. "It's international waters and Oman will behave just like everybody else or we'll have to blow them up. They understand that, they'll be fine."
The White House and Oman's embassy in Washington did not immediately respond to a request for comment.
Iran's permanent mission to the United Nations was not immediately available for comment.
Sanctions and Sticking Points in Negotiations
Iran was insisting on the United States releasing Iranian funds, the deputy secretary of its National Security Council said, according to a Tasnim report.
"We are seeking the release of all Iranian assets blocked by the United States, and this is the legal right of the Iranian nation," Ali Bagheri Kani said. "Iran's assets must be fully and unconditionally returned to Iran."
Ongoing sanctions, the dismantling of Iran's nuclear capacity and the blockage of the Strait of Hormuz, which handled a fifth of the world's oil and liquefied natural gas traffic before the war, are the major sticking points in talks to end the three-month conflict.
The waterway is covered by international law that guarantees foreign vessels the right to pass through.
The U.S. Treasury Department added the Persian Gulf Strait Authority, the Iranian body set up to manage passage through the strait, to a list of sanctioned people and entities seen as posing threats to U.S. national security.
Draft Deal and Nuclear Program Issues
Iranian state TV said the draft deal would also have the U.S. withdraw military forces from the immediate vicinity, though it said the issue of U.S. troops in the region needed further discussion. The White House dismissed the report as a "complete fabrication." Tehran did not comment.
The Iranian TV report on the draft agreement did not mention Iran's nuclear program, which the U.S. wants disbanded.
Iranian sources have said talks on the nuclear issue will come in a second round of negotiations - something that may not be acceptable to some of Trump's closest supporters. Iran says its nuclear program is for peaceful purposes only.
US Policy on Iran's Nuclear Program
"The bottom line is Iran's never going to have a nuclear weapon," U.S. Secretary of State Marco Rubio said at the cabinet meeting.
(Reporting by Reuters' bureaux; Writing by Lincoln Feast; Editing by Stephen Coates)
