The Trump administration is trying to recalibrate its strategy in the Gulf even as the Iran war rapidly escalates, US casualties rise and global oil markets reel.

Early July: War resumes and Hormuz fee plan

After a collapsed ceasefire in late June, the US resumed air strikes against Iran on July 7, reimposing a naval blockade on Iranian ports and focusing on control of the Strait of Hormuz.¹ Amid concerns over securing commercial shipping, Donald Trump initially backed a proposed cargo fee on vessels transiting the strait. Days later, as criticism mounted from allies and energy markets tightened, Trump signalled a reversal, saying the US would “abandon [the] proposed Strait of Hormuz cargo fee” and instead pursue “Gulf investment”.²

Mid-July: Tit-for-tat strikes and deaths in Jordan

As Tehran stepped up attacks across the Gulf, including on Gulf states, the US responded with successive waves of strikes targeting Iranian military facilities and drone and missile sites.³ The confrontation intensified after an Iranian attack on an air base in Jordan on a Friday night killed two American troops, prompting US retaliatory strikes on Iran the following evening “to punish Islamic Revolutionary Guard Corps forces” and to degrade Iran’s ability to threaten shipping in Hormuz.¹⁴

Late July: Mounting casualties and political pressure

By the weekend, the US had launched a ninth, then tenth, consecutive wave of strikes on Iran.¹⁵ Nearly 100 US troops had been injured in two weeks of fighting, with the Pentagon stressing that “the vast majority of injuries experienced were minor concussions” and that 96 per cent had returned to duty.⁵ At least four US service members have been killed, while Iran’s health ministry reported more than 50 Iranian dead and over 500 wounded from US strikes since late June.¹

Politically, the prolonged conflict, rising casualty figures and a roughly 25 per cent jump in oil prices in July have weighed on Trump’s approval ratings and deepened domestic opposition to the war.¹⁵ The decision to scrap the Hormuz cargo fee underscores the administration’s attempt to balance military pressure on Iran with the economic and political costs of an open-ended confrontation in one of the world’s most critical energy chokepoints.²