By Courtney Subramanian and Eltaf Najafizada.
President Donald Trump threatened to escalate strikes on Iran and said he’d hold the country responsible for any further attacks by the Yemen-based Houthis on ships in the Red Sea, as the widening Middle East war puts new strain on global energy supplies.
Trump told Axios in an interview that he’s considering a “massive attack” and is “close to making a decision” on it, the news agency reported. The president also posted that the US will inflict “major military punishment” on both Iran and the Houthis in the event of more strikes from Yemen on shipping.
The group earlier claimed it hit two Saudi Arabian oil tankers, opening a new front in the conflict that’s rattled commodity and bond markets. Brent crude rose above $100 a barrel on Thursday for the first time in almost two months.
US Central Command said Thursday in a post on X that it had launched its 13th consecutive night of strikes intended to degrade Iran’s ability to attack commercial shipping in the Strait of Hormuz.
Trump, in a Truth Social post hours earlier, warned “that from this point forth, any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls.” The president didn’t provide details on how such payments would work, including whether the US would pay shipping companies directly.
Estimates about the amount of frozen funds vary from $24 billion to $100 billion, though much of that is outside the US. Iranian Foreign Minister Abbas Araghchi said in a post on X that “seizing another nation’s assets to pay for unrelated future claims is an incendiary precedent.”
The war that began when the US and Israel attacked Iran in February has entered a new phase of escalation after last month’s truce collapsed. While fighting remains less intense than at its peak, both sides have exchanged strikes for about two weeks, with Iran warning it will target regional infrastructure, including energy facilities, if Trump carries out his threat to destroy one bridge or power plant each time Tehran attacks shipping in the Strait of Hormuz.
A mediation effort involving Iraq faltered after Iran on Thursday rejected a ceasefire proposal from Trump carried to Tehran by Iraq’s prime minister, the New York Times reported, citing Iranian and Iraqi officials. Details of the plan were not immediately clear, the paper said.
Traffic through Hormuz, which before the war carried about one-fifth of global energy supplies, has slowed to a trickle. Houthi involvement now threatens another maritime chokepoint, with some vessels already avoiding the Bab el-Mandeb Strait.
“Tehran and the Houthis are showing they still have room to climb on the escalation ladder,” Dina Esfandiary and Becca Wasser wrote for Bloomberg Economics, warning that “finding an off-ramp becomes harder.”
Both sides have been dismissive of a near-term return to the negotiating table, even as the risks to energy markets and the world economy mount.
Trump last month cited the risk of a global economic crash as a key reason why he agreed to a truce. But he said on Thursday that Iran is “not ready yet” for a deal and signaled US attacks will continue.
Iranian state TV reported a strike on the passenger terminal at the Shalamcheh border crossing with Iraq that killed two people, while Iran has continued attacks on US bases in Kuwait and Jordan.
Trump faces growing political pressure ahead of November’s midterm elections, with Republicans struggling to retain control of Congress. Polls show the war isn’t popular and the fallout weighs on voters, especially gasoline prices that climbed back above $4 a gallon this week. The House of Representatives on Thursday passed its second resolution calling on Trump to stop the war, albeit the measure is largely symbolic.
Attacks from Yemen threaten to push energy prices higher still because the Red Sea has emerged as a vital workaround for crude exports, particularly from Saudi Arabia, with Hormuz largely shut. The group has sent emails to shipowners warning them not to go to the kingdom’s ports.
The Iran-backed Houthis, part of Tehran’s so-called Axis of Resistance, control much of northern Yemen, including Sanaa and the Red Sea port of Hodeida. They have repeatedly disrupted Red Sea shipping since 2023 with drone and missile attacks launched after Israel’s war against Hamas began in Gaza. Trump ordered airstrikes against the group last year before ending the campaign after a partial truce.
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