Iran puts military on full alert as Hormuz deal hangs in balance

Iran's Islamic Revolutionary Guard Corps placed the country's armed forces on full combat alert Sunday, a senior commander said, as conflicting signals from Washington and Tehran cast doubt on whether a framework peace deal to reopen the Strait of Hormuz will be signed.

"Any party attempting to take hostile action against Iran will face an immediate response," the commander said, according to Iran's state news agency IRNA. The alert covers all branches of Iran's armed forces, which the IRGC said are operating at their highest level of military readiness.

The declaration came hours after Israel struck the southern outskirts of Beirut, targeting what it called a Hezbollah command center in the Dahiya neighborhood. Prime Minister Benjamin Netanyahu and Defense Minister Israel Katz said in a joint statement they ordered the strike after Hezbollah launched drones and rockets toward northern Israel, calling it a "blatant cease-fire violation." The escalation complicates a potential US-Iran agreement that Tehran has insisted must also resolve the conflict in Lebanon.

The Strait of Hormuz, a 33-kilometer-wide chokepoint that handles about one-fifth of all global oil and liquefied natural gas shipments, has been effectively closed since Iran enforced a blockade in late February following the outbreak of hostilities. The United States countered with a naval blockade on Iranian ports, creating a dual-closure dynamic that paralyzed Gulf maritime commerce. Brent crude has carried a significant risk premium since the closure, with prices falling more than 3% on June 12 after reports of progress toward a deal.

President Trump said in a social media post Saturday that a deal was "scheduled to get signed" on Sunday and would immediately reopen the strait. But Iran's Foreign Ministry spokesman Esmail Baghaei said no signing would occur Sunday, though he left open the possibility of an agreement in the coming days. The framework under negotiation, referred to by Iranian Foreign Minister Abbas Araghchi as the Islamabad Memorandum of Understanding, would extend the April cease-fire for 60 days, reopen the strait, and lift the US naval blockade while committing both sides to negotiations over Iran's nuclear program.

The last time Iran signaled maximum military readiness during a diplomatic window was in early 2020 after the US killing of Qassem Soleimani, when Tehran launched ballistic missiles at US bases in Iraq and oil prices spiked 15% over two weeks. The current standoff carries higher stakes: the strait's closure has disrupted not just crude tankers but LNG carriers serving Asian markets, container vessels, and bulk commodity ships, adding inflationary pressure to supply chains across Asia, Europe and East Africa.

Iran's nuclear program remains the most technically complex unresolved variable. Washington demands verifiable constraints on Iran's highly enriched uranium stockpile, while Tehran insists on down-blending the material inside Iran rather than surrendering it to international custody. The 60-day interim window is designed to create breathing room for those negotiations, but neither side has formally approved the framework as of June 14.

A Qatari delegation visited Tehran on Sunday to help finalize the agreement in coordination with Washington, according to an official with knowledge of the situation. Pakistan, which has served as the primary mediator, has proposed an electronic signing ceremony, though diplomatic agreements are typically signed in person. Trump, who turned 80 on Sunday, is expected to remain in Washington.

This article is for informational purposes only and does not constitute investment advice.