Description: After the IRGC seized two cargo vessels in the Strait of Hormuz, the US responded by blocking and turning away the Majestic cargo ship bringing the number of blocked or seized ships to 33 since the start of the blockade of the Strait of Hormuz. The standoff around the Strait of Hormuz continued as US president Trump stated that he instructed the US naval forces in the region to neutralize all and any ships suspected of laying mines in the Strait. He also indicated that the US was not in a rush to conclude a peace agreement with Iran as the costs of the blockade were primarily damaging the Iranian economy. Lebanon and Israel in a parallel diplomatic process, concluded the second round of negotiations in Washington and extended the ceasefire for three additional weeks hoping to achieve a comprehensive peace deal. Hezbollah has been sidelined from the diplomatic process and continuously denounced the ongoing negotiations amid violations of the ceasefire from Israel. The USS George Bush in the interim arrived in the region, bolstering US military presence which now constitutes three aircraft carriers and their respective strike groups.
Impact: The blockade of the Strait would likely remain in place in the short to mid – term period as the US president resorts towards imposing a firm stranglehold upon Iran’s economic flows, likely aiming to pressure Iran on the negotiation table. Sporadic seizures and blockades of ships would likely continue to test the fragile ceasefire on both sides which have proven their resolve to maintain the blockade on both ends of the Strait. Lebanon and Israel’s extension of the ceasefire is likely a purely political move as violations have been reported on both sides, primarily coming from the Israeli military which has expanded its ground presence in southern Lebanon. US military buildup in the region is likely a contingency plan in case the diplomatic efforts fail to yield any constructive results which in turn positions both countries back on a warpath depending on the expediency of the second round of negotiations which are set to happen in the immediate – term. Markets would likely continue to fluctuate with oil and gas prices being the most affected commodities pushing prices in other industries, such as food production, agriculture, air travel and manufacturing.