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Drone strike at Egypt port near Suez Canal ignites new shipping risks

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A drone strike that sparked fires on two gas vessels in Egypt’s Mediterranean ‌port of Damietta has raised a new threat to shipping through the Suez Canal, one of the last major export routes available to Saudi oil amid the expanding U.S.-Iran war.

No one has claimed responsibility for what Egypt’s cabinet said on Thursday was an unidentified drone that caused a fire on two vessels at Damietta a day earlier. The port lies near the Suez ​Canal, which links the Mediterranean and Red Seas, Reuters reported.

The drone hit the U.S.-owned gas storage tanker Energos Winter, causing a fire that spread to ​a second vessel, people familiar with the incident said.

Iran has denied any involvement in the Damietta strike.

“Egypt is an important ⁠friend and partner in the region, and its security is of utmost importance to us,” Iranian Foreign Minister Abbas Araqchi wrote on social media. “We must all ​be vigilant against Israeli plots and false-flag operations designed to undermine regional peace.”

The five-month-old war has already brought shipping traffic through the Strait of Hormuz, a slender ​chokepoint in the global energy trade, to a virtual standstill.

Before the conflict, the waterway between Oman and Iran carried about a fifth of global oil and liquefied natural gas supplies. The strait has become the main hurdle in peace talks and a flashpoint for repeated escalations in the conflict.

SAUDI PROPOSES MULTINATIONAL MARITIME DEFENCE COALITION

Iran-aligned Houthis on July 20 declared a maritime embargo ​against Saudi Arabia, opening a new front against the U.S. and its allies in the Iran war.

Recent Houthi attacks on shipping prompted London’s marine insurance market ​on Thursday to widen its “high risk” zone in the Red Sea to include more coastline adjacent to Saudi ports.

Saudi Arabia unveiled plans on Thursday for a multinational maritime defence coalition aimed at ‌protecting international ⁠shipping and energy supply routes in the Red Sea region.

The drone strike on the two gas tankers in Egyptian waters has renewed energy security concerns about the nearby Suez Canal and a related pipeline, a vital export route for Saudi Arabian oil since the beginning of the Iran war, say energy analysts.

A growing volume of Saudi oil, along with other shipping, has been diverted north up the Red Sea toward the Suez Canal and the SUMED pipeline, according to data from market intelligence ​firm Kpler. For Asian customers, however, that ​means a longer voyage around Africa ⁠instead of south via the Gulf of Aden.

Oman has presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz, including collecting voluntary fees for using it, people familiar with the matter told Reuters.

While Iran has ​publicly rejected the Omani proposal, its semi-official ILNA news agency quoted foreign ministry spokesperson Esmaeil Baghaei as saying talks ​with Oman over the ⁠strait were continuing.

IRAQ SAYS IT HAD NO KNOWLEDGE OF STRIKES ON SAUDI TARGETS

In a first in the five-month war, Saudi Arabia publicly joined strikes alongside U.S. forces, targeting Iran-aligned groups in eastern Iraq on Wednesday in retaliation for what it said were drone attacks on Saudi oil targets launched from Iraq.

According to assessments by Saudi Arabia ⁠and regional partners ​the Houthis carried out the attacks on Saudi Arabia from Iraqi territory in coordination with Iraqi ​groups.

Iraqi government spokesperson Haider al-Aboudi said on Thursday that Baghdad neither approved nor had prior knowledge of U.S.-Saudi strikes on Iraqi territory, the state news agency reported.

The latest strikes in Iraq and Egypt ​threatened to draw more Middle Eastern countries into the conflict.

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Erdogan urges Trump to pursue talks with Iran, offers support

Turkey has criticised the U.S. and Israeli assault on Iran, while also condemning the Iranian attacks on Gulf states and calling for the re-opening of the strategic strait.

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Turkish President Tayyip Erdogan urged U.S. President Donald Trump in a phone call to pursue talks with Iran to de-escalate ​tensions between the two countries, and offered Ankara’s support for peace ‌efforts, the Turkish presidency said on Tuesday.

Turkey, which has NATO’s second-largest army and borders Iran, has repeatedly called for an end to the war. It has maintained close contact with the ​United States, Iran, and mediators such as Pakistan and Qatar, while also acting as ​an intermediary between the parties, Reuters reported.

“Erdogan stated that it is of great ⁠importance to make the utmost of diplomacy regarding the tensions between Iran and ​the United States, that we hope the talks will continue, and that Turkey ​will continue to support peace efforts,” the presidency said in a statement.

The call comes after a senior Iranian official told Reuters earlier on Monday that Iran would shift to a “fully offensive” military ​posture because efforts to negotiate a permanent end to the war have stalled, ​as Washington ruled out extending a temporary ceasefire agreement.

Progress towards a resumption of oil tanker ‌traffic through ⁠the Strait of Hormuz has also stalled.

Turkey has criticised the U.S. and Israeli assault on Iran, while also condemning the Iranian attacks on Gulf states and calling for the re-opening of the strategic strait.

On Monday, Turkey’s foreign minister discussed the strait’s ​re-opening and the continuation ​of the ceasefire ⁠with his Iranian counterpart.

The presidency added that Erdogan and Trump also discussed bilateral ties, the war in Gaza, and a defence ​pact signed between Turkey, Saudi Arabia, and Pakistan, adding that ​the Turkish ⁠leader praised the accord as a sign of a “strong stance” for regional stability and security.

It said Erdogan told Trump that Israel’s attacks on Palestinians had increased at a time ⁠when the ​second phase of Trump’s Gaza Peace Plan was ​supposed to come into effect.

The White House did not immediately respond to a request for comment on ​the call.

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Trump envoy discusses Gaza plan with Netanyahu after rare Hamas meeting

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Donald Trump’s envoy and son-in-law Jared Kushner met with Israeli Prime Minister ‌Benjamin Netanyahu in Jerusalem on Monday, a day after holding a rare meeting with Hamas’ leader in Cairo in a bid to push forward the U.S. president’s Gaza plan.

Netanyahu, whose ruling coalition is trailing in Israeli opinion polls ahead of an October national election, publicly rejected this month ​a U.S.-backed agreement that would see Hamas surrender its arms in exchange for Israel withdrawing from Gaza, Reuters reported.

Trump had ​said the agreement would be carried out in phases, with Israeli forces withdrawing from Gaza as disarmament ⁠proceeded and an ‘International Stabilization Force’ worked with a new Palestinian police force to secure the territory.

But Netanyahu, Israel’s longest-serving leader, has ​said the country’s military will only withdraw once Hamas and other armed groups in Gaza have been completely disarmed. Diplomats say ​Israel is unlikely to make any major concessions over Gaza ahead of the October 27 election.

KUSHNER SEEKS TO PUSH AHEAD WITH STALLED GAZA PLAN

Kushner was joined in the Jerusalem meeting with Netanyahu by Nickolay Mladenov, Trump’s Board of Peace envoy for Gaza, the two ​sources said, speaking on condition of anonymity as they were not authorized to discuss the matter publicly.

Netanyahu’s office ​did not immediately respond to a request for comment.

Mladenov, a former U.N. official with close ties to the United Arab Emirates, an ‌influential ⁠Middle Eastern state, helped broker last month’s disarmament agreement and is widely seen as leading efforts to implement Trump’s original 20-point plan to end the war, which Israel and Hamas agreed to last year.

However, there has so far been little progress, with Israel continuing to carry out strikes on Gaza despite agreeing to a ceasefire as part of Trump’s plan. ​Hamas last month agreed to ​a new U.S.-backed 15-point ⁠roadmap aimed at moving Trump’s plan forward. Israel rejected that roadmap.

Earlier, a source said Hamas leader Khalil Al-Hayya had been present at some of the meetings in Cairo on Sunday that mediators held ​with Kushner and Mladenov.

It marks Kushner’s second known meeting with representatives of Hamas, the Palestinian militant group designated a ​terrorist movement by ⁠the United States.

Kushner previously met Hamas officials alongside U.S. envoy Steve Witkoff in October 2025, helping clinch a deal that led to a ceasefire in Gaza and the release of remaining hostages seized by Hamas in the October 7, 2023 attack on ⁠Israel.

Trump said ​in late July a deal had been reached for the complete disarmament of Hamas ​and other armed groups in Gaza. Hamas has said it agreed to the plan but the deal’s implementation would depend on Israel first meeting its ​own commitments, including withdrawal and halting attacks.

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Trump wants more economic pressure on Iran

The United States could continue targeting Iranian individuals and ‌entities, as well ⁠as others in China and the Gulf, that are helping Tehran evade sanctions to collect revenues for its war effort.

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U.S. President Donald Trump on Friday vowed to hit Iran hard economically, a day after Treasury Secretary Scott Bessent said that Washington would impose measures on Tehran that have “never been seen” as soon as next week, Reuters reported.

The United States, United Nations and European Union have applied sanctions, implemented trade embargoes and frozen assets since the late 1970s over ​Iran’s nuclear program, human rights violations and support for militant groups.

Since the Iran war began in February, Washington has levied additional maritime, energy and financial sanctions ‌and started a naval blockade.

Data from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) shows the agency has imposed sanctions on more than 1,000 people, vessels and aircraft since Trump began his second term.

Recent measures have targeted Iran’s shadow oil fleet; shipping insurers; entities and people enabling Iran’s acquisition of weapons; and digital exchanges, freezing an estimated $500 billion in Iran-linked cryptocurrency.

Chinese independent refineries known as “teapots” account for a quarter of Chinese refinery capacity. They operate with narrow and sometimes negative profit margins.

China buys more than 80% of Iran’s ​shipped oil, according to 2025 data from analytics firm Kpler. Independent refiners absorb much of this trade, exposing them to so-called secondary measures ⁠that penalize entities helping a primary sanctions target.

Past U.S. sanctions have deterred larger independent refiners from buying Iranian oil. But the independent refineries are somewhat immune since they have little exposure ​to the U.S. financial system, sanctions experts say.

OFAC has imposed secondary sanctions on smaller China- and Hong Kong-based entities accused of processing billions of dollars in Iranian oil and ​helping to fund weapons procurement.

Treasury has warned two larger Chinese banks they could face secondary sanctions if Iranian funds were found moving through their systems, but has stopped short of designating them.

Hitting those two banks, which U.S. officials have not publicly identified, or imposing other sanctions could have a chilling effect on bigger financial institutions, sanctions experts said, although they warned it could also trigger retaliatory actions by Beijing, read the report.

Trump administration officials have ​sought to play down tensions between Washington and Beijing ahead of an expected meeting between Trump and President Xi Jinping later this year. They worry that China could curtail exports of ​critical minerals that are essential to advanced technology production at a time when the U.S. and Western allies are still trying to develop their own supplies.

The United States could continue targeting Iranian individuals and ‌entities, as well ⁠as others in China and the Gulf, that are helping Tehran evade sanctions to collect revenues for its war effort.

Treasury recently issued sanctions against firms that are springing up to facilitate Iran’s trading of oil revenue for imports. But such measures amount to a “whack-a-mole” approach that has not altered Iran’s behavior, said Brett Erickson, managing principal of Obsidian Risk Advisors, noting that Tehran simply creates new entities to replace them.

Miad Maleki, a sanctions expert with the Foundation for Defense of Democracies, said Bessent was likely signaling a sharpened enforcement push against oil shippers, purchasers and currency ​exchangers who help Iran pay for its ​imports.

Further aviation sanctions were also possible, aimed ⁠at degrading Iran’s ability to move trade now that the U.S. has blockaded shipping via the Strait of Hormuz, he added.

Some U.S. and Israeli officials have floated the prospect of a land blockade, which would require assistance from Iran’s neighbors: Iraq, Turkey, Pakistan, Afghanistan, Turkmenistan, Azerbaijan ​and Armenia.

The Trump administration has varying degrees of closeness with all those countries except Afghanistan, but that border is mountainous and extremely difficult ​to patrol anyway.

Trump may ⁠have leverage over Pakistan, which recently sought a $10 billion currency swap line from Treasury, and Turkey, which is seeking to rejoin the U.S. F-35 warplane program.

A land blockade could increase pressure on the Iranian people by halting their imports of food, energy and textiles, but experts say such a move would be difficult to execute and might not result in protests or internal pressure, Reuters reported.

Trump has repeatedly ⁠threatened tariffs on ​goods from countries that do business with Iran, although the Supreme Court struck down the legal basis for ​such taxes.

The Senate passed a sweeping Russia sanctions bill last week that included new Iran sanctions and would give Trump new tariff powers that he could potentially use against countries that aid Iran’s commerce and weapons procurement.

That legislation must ​still pass the U.S. House of Representatives, which could prove challenging given widespread concerns among Democrats and some Republicans about the tariff measures.

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