Trump’s Naval Blockade of Iran Begins; Trump Abandons 20% “Protection Fee” on Strait of Hormuz Cargo
U.S./Iran update | Crude oil continues higher | New senator sworn in | Cooler than expected inflation | Russia/Ukraine attacks rally wheat
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| PM Updates: Policy/News/Markets, July 14, 2026 |
| TOP STORIES—Update on U.S./Iran developments: • Military action. The U.S. carried out a third consecutive night of strikes, with CENTCOM operations hitting targets around Bushehr, Bandar Abbas, Chah Bahar, Jask, Konarak, and Abu Musa, plus a first-of-its-kind drone-boat attack on an Iranian vessel. Iran’s IRGC retaliated across the Gulf today — striking UAE-linked oil tankers (one Indian crew member killed, eight wounded), U.S. military installations in Kuwait and Bahrain, and targets in Jordan, which intercepted four Iranian missiles. The IRGC also claims it downed a U.S. drone. • Blockade and the Hormuz fee reversal. Trump’s naval blockade of Iran’s southern coastline formally resumes at 20:00 GMT today (4 p.m. ET), restricting access to Iranian ports and terminals. In a notable reversal, Trump abandoned his 20% “protection fee” on Strait of Hormuz cargo announced yesterday, saying he instead wants “trade and investment” deals with Gulf partners — while keeping the blockade itself in place. •Diplomacy. Prospects look dim for now. Iran’s foreign ministry says the strikes have “rendered futile” recent diplomatic efforts (talks had made progress in Doha and Switzerland in late June/early July before fighting resumed). Trump, for his part, says a “deal is possible” and has notified Congress that combat operations will continue for another 60 days; he has also threatened strikes on the suspected Pickaxe Mountain nuclear site. •Markets and shipping. Brent crude is around $85 a barrel after Sunday’s 9%+ spike (the biggest daily gain since 2020), though prices came off their highs today after the Hormuz fee reversal. Ship transits through the strait fell roughly 52% between July 10–12 versus the prior week, and CENTCOM insists Iran “does not control” the waterway despite Tehran’s closure claims. —New senator sworn in. Darline Graham, sister of the late Sen. Lindsey Graham, was sworn in this afternoon to fill his South Carolina seat. Graham died unexpectedly Saturday, July 12, of an aortic dissection at age 71, and Gov. Henry McMaster appointed her Monday. A Republican and South Carolina’s first female senator, she’s a former optician and state agency employee who has never held elected office. She’ll serve only the remaining months of the term — a special GOP primary is set for August 11, with the general election November 3. —Cooler-than-expected inflation is the story of the day: June CPI came in at 3.5% annually versus 3.8% expected, giving equities a lift after Monday’s decline. As of this afternoon the S&P 500 is up about 0.4% near 7,548, the Nasdaq is up over 1%, and the Dow is slightly lower around 52,463. Big bank earnings kicked off Q2 season with strength — JPMorgan posted the largest quarterly profit in U.S. banking history (helped by roughly $6 billion in stock-trading gains), Bank of America’s profit jumped 27%, and Goldman’s profits surged — though bank stocks were mostly flat to lower on the news. The big loser is IBM, down about 22% after missing on earnings and revenue. —Winter wheat scores six-week high close as Black Sea risks escalateRussian shipping disruptions lift wheat while corn and soybeans retreat Winter wheat futures led a mixed agricultural market Tuesday, climbing to six-week-high closes as attacks on vessels and continued shipping restrictions intensified concerns about grain movement from Russia and Ukraine. September Chicago soft red winter wheat rose 9 3/4 cents to $6.45, while September Kansas City hard red winter wheat gained 11 3/4 cents to $6.78. September spring wheat added 4 3/4 cents to $6.58. Wheat buying accelerated after Ukraine said its drones struck 11 Russian vessels overnight in the Sea of Azov, including tankers, dry-cargo ships and a tugboat. Ukrainian forces claim to have hit 116 vessels in the region over the past nine days. Industry sources told Reuters that several grain vessels were hit July 13 and July 14 and caught fire, although Ukraine said it targets only military assets or facilities supporting Russia’s war effort. The larger concern is that commercial vessels remain unable to enter or leave the Sea of Azov through the Kerch Strait or the Azov-Don channel. The corridor handles roughly one-quarter of Russia’s grain exports and links major production areas in Rostov and Krasnodar with international markets. Russia is the world’s largest wheat exporter, making even a partial interruption important to global price discovery. Russia’s Agriculture Ministry said shipments could be redirected through deepwater Black Sea terminals or Baltic Sea ports and insisted the country would meet its export commitments. However, rerouting would require additional rail, truck and port capacity at a time when Ukrainian attacks have also threatened alternative Russian facilities. Higher freight, insurance and inland transportation costs could lift Russian export offers even without a complete loss of grain availability. The market is therefore pricing more than an immediate supply shortage. Traders are adding a logistics and insurance premium because the length of the restrictions is unknown and both countries are increasingly targeting infrastructure tied to their opponent’s export economy. A brief disruption followed by successful rerouting could remove part of Tuesday’s premium. Restrictions lasting several weeks during the arrival of Russia’s new harvest would be considerably more bullish, potentially slowing Russian shipments and redirecting import demand toward Europe, the U.S. and other exporters. Corn and soybeans failed to follow wheat higher as improved U.S. crop ratings encouraged profit taking. September corn fell 2 1/2 cents to $4.38 1/2, while December corn declined 2 3/4 cents to $4.60 1/2. USDA rated 68% of the corn crop good to excellent, up one percentage point from the previous week, giving traders some justification to reduce weather premium despite forecasts for heat and dryness across portions of the Plains and western Corn Belt. August soybeans slipped 4 cents to $11.92 3/4, and November soybeans fell 3 3/4 cents to $11.91. USDA raised the soybean good-to-excellent rating one point to 65%, while development remained ahead of average, with 50% blooming and 19% setting pods. The modest losses suggest traders remain reluctant to press the downside aggressively while July and August weather risks are unresolved, but soybeans lacked wheat’s immediate geopolitical catalyst. Tuesday’s action reinforces the increasingly divided structure of the grain markets. Wheat has the clearest near-term bullish story because Black Sea shipping is facing a direct and measurable threat. Corn and soybeans remain weather markets, leaving them vulnerable to daily changes in crop ratings and rainfall forecasts. Sustained strength across the broader grain complex will likely require either confirmation that Russian exports are being materially delayed or a deterioration in U.S. summer crop prospects. |
