Iran has indicated the possibility of re-closing the Strait of Hormuz following the deaths of two individuals in southern Lebanon due to Israeli military action on June 23. This escalation has reignited hostilities that Iran views as a critical factor for the completion of its peace agreement with the United States. Iran is insisting on a complete ceasefire in Lebanon as part of any overarching accord; however, Israel claims it will continue to act freely against perceived threats from Hezbollah. Neither Israel nor Hezbollah is party to the US-Iran agreement. The ongoing situation in Lebanon, combined with tensions over nuclear inspections, poses a risk of destabilizing oil markets once again. On Monday, only 39 vessels traversed the Strait, significantly lower than pre-conflict figures. Experts in American energy forecast that a renewed closure could drive US gasoline prices above $4.50 within a fortnight.
