Conflict in the Strait of Hormuz: A Timeline of Crisis and Resolution

Overview

A conflict between the United States, Israel, and Iran, which began on February 28, 2026, led to a significant disruption of global oil flows through the Strait of Hormuz, causing major volatility in global financial markets. The conflict involved a U.S. naval blockade of Iranian ports, military exchanges, and diplomatic negotiations, culminating in a two-week ceasefire in early April 2026.

The Outbreak of Conflict and Naval Blockade

Military Operations Begin

On February 28, 2026, joint U.S.-Israeli strikes on Iranian territory initiated a period of military conflict. These strikes, named "Operation Epic Fury," resulted in the death of Supreme Leader Ayatollah Ali Khamenei. In retaliation, Iran and its proxies launched missile and drone attacks on oil infrastructure, industrial sites, and U.S. military facilities across the Gulf. Saudi Arabia, the UAE, Kuwait, and Bahrain sustained damage.

U.S. Naval Blockade

On March 29, 2026, the U.S. Central Command (CENTCOM) announced the full implementation of a naval blockade on Iranian ports. CENTCOM Commander Brad Cooper stated the blockade was achieved within 36 hours of an order from President Donald Trump and involved more than 10,000 U.S. troops, over a dozen Navy ships, and fighter jets in the Gulf of Oman and the Arabian Sea.

During the first 24 hours, U.S. forces reported that six merchant vessels were ordered to turn back to Iranian ports.

Maritime intelligence firm Windward identified at least two vessels, including a U.S.-sanctioned Chinese-owned tanker named Rich Starry, that transited the Strait of Hormuz during the first day of enforcement, noting that transit remained limited and concentrated among sanctioned or high-risk vessels.

The blockade did not have a defined geographic boundary, allowing U.S. forces to interdict vessels in international waters. A U.S. military notice reportedly exempted humanitarian shipments to Iran from the blockade.

Economic and Market Impact

Oil and Energy Markets

The closure of the Strait of Hormuz, through which approximately 20% of the world's oil supply transits, caused a severe global energy shock. U.S. crude oil prices rose from below $60 per barrel at the start of the year to exceed $110 per barrel during the conflict. The national average U.S. gasoline price increased by more than 37% from the start of the conflict, reaching $4.54 per gallon by late April.

Stock Market Performance

U.S. stock markets experienced significant volatility. The S&P 500 declined 9.8% from its January high to a low of 6,316.91 on March 30.

However, the index recovered all its losses by mid-April, closing at a new record high of 7,022.95. The recovery was driven by expectations of a diplomatic resolution and strong corporate earnings.

The Dow Jones Industrial Average crossed the 50,000 mark for the first time in late May, and the S&P 500 closed above 7,000 and 7,500 for the first time in mid-May. The Nasdaq Composite also reached multiple record highs, driven by strong performance in technology and AI-related stocks like Nvidia and Micron Technology.

Broader Economic Concerns

The International Monetary Fund (IMF) revised its global growth forecast for 2026 downward to 3.1% from 3.3%. The IMF also raised its inflation forecast for 2026 to 4.4% from 4.1%. Economists warned that high fuel prices could slow the global economy.

February Sell-Off

In February 2026, markets experienced a sharp sell-off driven by concerns about artificial intelligence's impact on the software sector. The Nasdaq Composite declined over 3% for the month, and the iShares Expanded Tech-Software ETF fell 10%. The S&P 500 ended February down over 1%.

Negotiations and Ceasefire

Initial Talks

The first round of U.S.-Iran peace talks was held in Islamabad, Pakistan. The talks did not result in a deal, but a ceasefire was announced on April 7, 2026. A second round was planned but later stalled, with Iran stating it would not participate, calling the talks a "waste of time."

Nuclear Negotiations

A key point of disagreement in negotiations was Iran's uranium enrichment program. The U.S. proposed a 20-year moratorium on uranium enrichment, to which Iran responded with an offer of a pause "for up to five years."

U.S. Vice President JD Vance stated that the Iranian delegation had to return to Tehran for approval, reflecting the view that the U.S. was negotiating with a committee of competing factions.

Ceasefire and Israeli-Lebanon Component

On April 16, President Trump announced that Israel and Lebanon had agreed to a 10-day ceasefire. The ceasefire between Israel and Lebanon was later extended by three weeks. The agreement stipulated that Israel would halt offensive military operations but reserve the right to act in self-defense, while Lebanon agreed to prevent non-state actors from attacking Israel from its territory.

Final Ceasefire Agreement

On June 17, 2026, President Trump and the Iranian president signed an interim peace agreement. The deal included the reopening of the Strait of Hormuz to commercial traffic, the removal of the U.S. naval blockade, and a framework for further negotiations on Iran's nuclear program over the following 60 days.

Key Events Timeline

Key Actors and Statements

• U.S. President Donald Trump: Stated the conflict was "close to over" while also saying "we're not finished." He extended war-related deadlines, paused some bombing, and sent officials to Pakistan for talks. Trump later stated a deal with Iran was "now complete."

• U.S. Vice President JD Vance: Led the U.S. delegation in the first round of negotiations, stating Iran "moved in our direction" but "didn't move far enough." He accused the Iranian government of "economic terrorism" for blocking the Strait of Hormuz.

• Iranian Officials: Iran's Foreign Minister, Abbas Araghchi, stated the Strait of Hormuz would be "completely open" for commercial vessels during the ceasefire. Iran's First Vice President, Mohammad-Reza Aref, stated, "The security of the Strait of Hormuz is not free." Iranian Supreme Leader Adviser Mohammad Mokhber warned Iran would "open new fronts" in response to the blockade.

• China: Called the U.S. blockade "dangerous and irresponsible," stating it would aggravate tensions. China purchases more than 90% of Iran's oil exports.

• International Organizations: The IMF cut its 2026 global growth forecast and raised its inflation forecast. The G7 held emergency meetings regarding the conflict.

Aftermath and Continuing Risks

Following the signing of the interim peace agreement, the Strait of Hormuz began to reopen to commercial traffic. Oil prices declined significantly from their wartime highs, with Brent crude falling below $80 per barrel. The S&P 500 and other major indices continued to reach new highs as the risk of a prolonged conflict diminished.

However, tensions remained. The Houthis, an Iran-aligned group in Yemen, claimed attacks on Saudi oil tankers in the Red Sea in late June, raising concerns that the conflict could spread. The U.S. continued to maintain a naval presence in the region.