Iran Attacks UAE Oil Sites; US Ships Exit Strait of Hormuz

The strikes caused fires and injuries, with air defenses responding to incoming threats. US officials reported two merchant ships safely exiting the Strait of Hormuz amid ongoing tensions. The attacks led to immediate market volatility, with oil prices climbing and bond yields rising sharply.

The 10-year Treasury note yield reached 4.45%, while the 30-year yield surpassed 5.01%. Stocks declined as reports of explosions emerged.

Trump announced Project Freedom to guide stranded ships through the Strait of Hormuz. Within hours, two US-flagged vessels transited safely, supported by Navy destroyers. Central Command described this as a first step in restoring commercial shipping.

Iran claimed to have struck a US Navy vessel near Jask island after it ignored warnings. US officials denied any such incident, stating no ships were hit. Iran also redefined its control zone in the strait, warning against unauthorized entries. He emphasized that Project Freedom was not coordinated with Iran and urged partners to pressure Tehran.

Bessent described the situation as an aberration expected to resolve in weeks or months. Iran insisted the strait is under its control and reported preventing US warships from entering. Reports also indicated Iranian forces fired on ships attempting transit without coordination.

Three residents were moderately injured in the attack on Fujairah's petroleum industries zone. The incident involved a drone strike on an oil facility, causing a fire. No fatalities were reported, marking the first confirmed civilian injuries in the current conflict.

The UAE confirmed an ADNOC vessel was hit by two Iranian drones in the Hormuz area. Operations at the Fujairah facility were affected by the aerial attack.

Pakistan facilitated the return of 22 Iranian crew members from a US-seized merchant ship as a confidence-building measure. The crew was evacuated to Pakistan for repatriation. Iran's foreign ministry is assessing a US response to its 14-point proposal to end the war, which President Trump called unacceptable.

Discussions between US representatives and Iran continue, with potential for positive outcomes.

Market indicators showed a 42% chance of a rate hike by March 2027, with no cuts expected until December 2027. Analysts noted rising gas prices and mortgage rates as potential outcomes. The attacks followed reports of suspicious activities near Dubai, including a cargo vessel fire of unknown cause.

“US is opening up the strait, we have absolute control of the strait.”