U.S. Pushes Intensive Bombing of Iran as Strait of Hormuz Is Effectively Blocked

The secretary cited grounds that crude shipping volumes had nearly returned to pre-war levels, but the actual data diverges sharply from that claim.

According to a survey by the UK Maritime Trade Operations, eight ships passed through the Strait of Hormuz on October 8. That is the lowest figure in two months and a drop of about 75% from pre-war traffic.

Tanker attacks are happening every day, and as Iran's strike range extends to the waters off Qatar, shipping companies are increasingly avoiding the route.

As tankers were repeatedly hit by attacks near Iran and in the waters off Qatar, Brent crude rose above $105 a barrel on October 8.

Converting dollars has become practically impossible.

The government says it can withstand the war with the United States, but the economy and logistics have come to a complete halt. Inflation has reached 70% compared with the start of the year, and Iran's statistics office reported that real GDP for the March to June quarter fell 10.1% from a year earlier. That is two to three times the scale of Korea's IMF crisis.

Despite more than 100,000 strikes in the 'Operation Epic' earlier this year, Iran's factories are restarting and production is rising.

The capabilities of Iran's military and Revolutionary Guard that survived the war have actually grown. Not only have only capable personnel remained, but their targeting ability has improved. According to the Congressional Research Service, the U.S. has lost several aircraft, and the cost of the war exceeds 60 trillion won.

The eight ships that do pass are paying enormous insurance premiums and bearing the risk of the crossing. Shipping costs have become so high that smooth passage is effectively impossible.

Between 70% and 80% of total maritime cargo is being diverted around the Strait of Hormuz, which amounts to the strait being effectively closed.

The plan is to strike Iranian forces that remain with a three-day intensive bombing campaign.

The targets are Iran's missile and drone capabilities, its energy facilities, and the Revolutionary Guard. However, as of October 8, Trump said he would not attack Iran before the midterm elections on November 3. Uncertainty over whether the strikes would succeed and the instability of the international situation are shaping the timing decision.

President Trump has made clear that he will not attack Iran before the midterm elections. The midterms are on November 3, less than a month away.

It appears that the judgment is at work that, if international tensions grow amid uncertain odds of success, the move could politically hurt Trump.

This is the first time since the second Iraq war in 2003. More than 20,000 Marines and naval personnel and several hundred aircraft are expected to be deployed in addition.

Drawing a parallel to the Vietnam War, when U.S. forces failed to protect South Vietnam and the whole country fell to the communists, the correspondent suggested a similar trend could emerge in the current Middle East situation.

The Houthis have grown beyond a simple armed group into a regional power, becoming an opponent that neither U.S. nor Saudi forces can fully subdue.

Since mid-September, Houthi missile attacks on Saudi territory have continued to rise. The range of attacks has expanded to the point that air raid warnings have sounded in Riyadh, the Saudi capital.

Houthi air power momentum is growing stronger, and it is assessed to have an attack success rate of around 90%.

The Saudi air force has been effective at destroying fixed and visible targets such as missile launchers and ammunition depots. However, the Houthis keep their core headquarters in mountainous areas, so forces must push uphill from the sea.

This means the nature of the fighting is shifting toward a battle to retake coastal strongholds. It reveals the limits of believing that destroying fixed facilities alone can completely eliminate Houthi strength.

The proxy-war dynamic between the Iranian and Saudi camps is deepening across the region.

President Trump has said that the U.S. will not directly join the Red Sea conflict for now. However, whether the U.S. would intervene if the damage to Saudi Arabia worsens remains an open variable.

That is an additional $3 cut from the previous month and the largest discount since June 2022.

Arab Medium and Arab Heavy were cut by an additional $5 a barrel compared with Arab Light. This appears to be an effort by Saudi Arabia to partly absorb the rise in shipping costs caused by the Strait of Hormuz crisis.

The daily charter rate for very large crude carriers (VLCCs) has soared to $1.2 million a day. Last year the rate was $80,000 a day, a 15-fold increase in a single year.

This is the result of a risk premium reflecting the instability of the Strait of Hormuz. This surge in shipping costs is a major driver pushing up crude costs for Asian countries.

Saudi Aramco has cut its official selling prices (OSPs) for crude bound for Asia, partly offsetting the price increases caused by higher charter rates. Without this, Asian countries could look for alternative supplies.

From Aramco's perspective, the price cut can be seen as a move to preserve existing markets during the Strait of Hormuz crisis.

Korean refiners benefited from Saudi Arabia's price cuts on the cost side. However, additional costs from higher freight and insurance are offsetting that gain.

Refining margins and inventory valuations are mixed, and whether the Strait of Hormuz stabilizes has become the key variable for the profitability of Korean refiners.