In the time it took to hear the shots, three commercial ships were fired upon in the Strait of Hormuz, the United States launched its largest post-ceasefire military strikes against Iran on Iranian soil, and the Treasury Department revoked a sanctions waiver that had allowed Iran to sell its oil for just three weeks. A maritime combat evolved into a comprehensive trial of an accord that was never meant to have much room to breathe.

The series of events started late Monday into Tuesday when Iran's Revolutionary Guard navy is said to have opened fire on ships passing through the strait, which Tehran has repeatedly threatened to cut off to foreign vessels unless they are coordinated with Iranian authorities. A drone has ignited the engine room of a LNG ship carrying LNG from Qatar, leading to an evacuation. A Saudi-flagged supertanker was damaged off the Omani coast while a third one was also attacked. Qatar called in the deputy ambassador to Doha and Tehran has full responsibility, Riyadh also condemned Tehran. Iran's foreign ministry responded that it was being respectful to the ceasefire and that the ships "voluntarily" were taking risks by ignoring the warning.

It was a response that was not long in coming, nor silent. Early Wednesday, U.S. Central Command reported that its troops had "destroyed" more than eighty targets inside Iran, among them anti-ship missile batteries, air defense systems, command networks, small boats used by the Revolutionary Guard and upwards of sixty coastguard radar sites. The four-hour manoeuvre arrived at Bandar Abbas, the headquarters of the Guard navy in the strait, and at the island of Qeshm, where they launched hundreds of drones and missiles at the shipping vessels, and at the port town of Sirik, where shrapnel hit several people at a commercial pier. The strikes were described as offensive, not defensive, in a shift from previous rounds of fire, according to a description by CENTCOM.

The exchange did not end there for Iran's Guard. Hours later, its navy and aerospace groups captured a missile and drone from the American forces in Bahrain and Kuwait, stating they had brought down a drone from the U.S. forces in the process. Kuwait reported air defenses shooting at incoming fire and localised power cuts as transmission lines were down; power cuts were also reported in Bahrain, which activated warning sirens. The Iranian readiness to attack U.S. bases within friendly Arab territory demonstrated how quickly a maritime dispute can escalate into a regional conflict.Neither state reported any casualties, but Iran's commitment to attack American bases within allied Arab territory illustrates how quickly a maritime dispute can become a regional crisis.

The economic penalty by Washington on the same day and, perhaps more important, the military exchange were piled on top of the military exchange. Three weeks ago, the Treasury had granted a license for the sale of Iranian crude and petrochemicals until Aug. 21, a major exception to the four-month war ceasefire agreement contained in an interim deal. On Tuesday, that license was canceled, as were the dollar provisions. It's simply performance-based," said a senior official, "and companies already flying have until July 17 to relax transactions as the sanctions re-engage.

The repercussions of the commercial impact were felt right away. The figures cited by reports based on market data suggested that some sixty-three million barrels of Iranian crude were being carried aboard ships in the Persian Gulf and Asian waters with no obvious buyer since the waiver has expired, and assuming that the relief would be maintained through the summer. The impact of a two-month legal export capacity loss is a hard hit on an economy that is as dependent on oil as Iran's.

The markets responded as they always do when a choke point that transports about 20% of all oil and gas shipped to and from the planet is put under pressure. Brent crude fell to settle just three percent up at $74.16 a barrel, while West Texas Intermediate rose by close to the same amount to $70.44. As news of the strike and the cancellation of the license added to the woes by evening, futures had reportedly reached $76, their highest one-day gain in weeks. The price of gas in Europe rose by over four per cent because of the LNG tanker attack.

Economists are not that far off from each other on the issue of why Tehran continues to focus on this pressure point, instead of going elsewhere. Iran has one card to play in the international market that it can use without further land battles; it is the control of Hormuz. In principle both sides have an interest in keeping the fighting limited: an American administration in the middle of midterm elections doesn't want to see prices rising and Iran desperately needs the relief that a long-term settlement would bring. But it's not prevented either side from pushing the other's buttons every few weeks and traders are starting to ignore the pattern more and more until a tanker finally bursts into flames.

The general trend below the short-term price action is not as clear as it seemed on Tuesday. OPEC+, led by Saudi Arabia, agreed on another small increase in output quotas, a gradual lifting of previous cuts in production. Riyadh, which has been ratcheting up pipeline capacity to its Red Sea ports as a precaution against the possibility that the Hormuz straits could be shut down for long periods, recently lowered the price of its benchmark crude for Asian buyers the most in decades, indicating that supply is keeping prices contained despite repeated flare-ups in the Gulf. The battle between geopolitical risk premium and real oversupply is of immense importance for import-reliant South Asian, African and Southeast Asian nations, as they would be forced to face renewed inflationary pressures as prices climb toward eighty dollars a barrel while other economies' inflationary pressures ease.

Politically, there is no resolution. Last week, talks in Doha failed to achieve any progress towards a permanent deal, and Iran's foreign minister has said negotiations will not advance while there are "threats" from the Americans. Before he left for the NATO summit in Ankara, President Trump made it clear: "It's going to be a final deal, or we're going to do it ourselves". It should not take long to see what direction this round of violence takes since it started with burning of a tanker and spread to three countries.