A ship was struck by a projectile early Tuesday while sailing out of the Strait of Hormuz, British military officials confirmed. No one has claimed responsibility for the strike.
An Iranian official says the critical waterway will remain closed until the United States meets Iran's conditions.
The attack comes as Iran continues to restrict shipping traffic through one of the world's most important trade routes.
The incident is rattling energy markets. Oil prices are among the highest seen since July, and diesel has soared in every part of the country in the last 24 hours.
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The national average for a gallon of gasoline stood at $4.07, according to AAA. Diesel is at $5.46 a gallon — up from $3.69 a year ago.
The sharp increase in diesel prices is not solely tied to the Middle East. The conflict between Ukraine and Russia, including Ukrainian strikes on Russian facilities, is also contributing to volatility in energy markets.
"They want to make a deal, but they're not going to make the kind of a deal that I feel is necessary. Look, we're in there for one reason. Iran cannot have a nuclear weapon. I like the idea of declaring it a territory. We have total control over the Strait," President Donald Trump said.
Trump has repeatedly stated that the U.S. Navy's blockade is ironclad and that the U.S. controls the Strait of Hormuz. He floated the idea again Monday in the Oval Office of potentially declaring the Strait of Hormuz a U.S. territory.
Jared Kushner, Trump's son-in-law who has been involved in many high-stakes negotiations on the president's behalf, told Fox News Monday that Iran does not want to make a deal that makes sense for the United States.
As the world considers whether this is the new normal in the Middle East, Iran has declared victory in many cases and declared control over the Strait of Hormuz — a claim Trump flatly rejects.
RELATED STORY | Deal to reopen Strait of Hormuz could be imminent, US officials say
With U.S. midterm elections approaching and a potential change of power in Congress possible, and with elections in Israel taking place in October, Iran may be trying to run out the clock.
Diesel is a critical fuel for the global economy. Trucks that bring goods to stores are often powered by diesel, and farmers rely heavily on it during the busy summer season. Economists warn that the cost of high energy prices will eventually be passed along to consumers, with food prices a particular concern.
