Trump warns Iran of military action if nuclear talks fail as oil prices plunge

The Israeli military said on Tuesday it intercepted a drone near the Jordanian border and was looking into its origin.

"A short while ago, the Israeli Air Force intercepted a UAV in the area of the Jordan border," the military said.

"The UAV did not cross into Israeli territory. The origin of the launch is under review."

Jordan has been repeatedly targeted since war resumed between Iran and the United States earlier this month.

Israel has not taken part in the latest round of fighting.

Separately, the Israeli military said early Tuesday that air sirens sounded in the area of Kissufim, next to the Gaza Strip, due to a "false identification".

The United States began reviewing its military presence in Europe on Monday, officials said, after US Defense Secretary Pete Hegseth told his NATO counterparts last month that Washington was planning such an analysis.

"As the Secretary (Hegseth) laid out then, this will be a real review, designed to ensure that NATO is moving fast and irreversibly toward Europe taking primary responsibility for its conventional defense," US Defense Under Secretary Elbridge Colby wrote on X.

"The outcome of this Review will be an acceleration of NATO's transition to a stronger, more equitable, and sustainable alliance," Colby added.

President Donald Trump has repeatedly lashed out against European allies over their response to his war in Iran, including the refusal to allow US forces to use their bases during the start of the conflict.

Hegseth has also threatened to reduce Washington's NATO spending unless allies reached defense spending targets.

Washington has been clear with Europe that it wants NATO allies on the continent to take over primary responsibility for their own conventional defense as US focus shifts towards China.

As part of that process the Pentagon has already told allies it is reducing the number of assets worldwide that it makes available for NATO operations.

Israeli Prime Minister Benjamin Netanyahu landed in Washington on Monday (local time) for high-level talks with US President Donald Trump, placing regional security and the confrontation with Iran at the top of the bilateral agenda.

Yemen's internationally-recognised government on Monday said it is ready for any escalation with Houthi rebels after the Iran-backed group launched attacks and a maritime blockade targeting Saudi Arabia. 

Fears are growing that renewed fighting between Saudi Arabia and the Houthi rebels in Yemen may further destabilise the Arabian peninsula and rattle the region's precarious fault lines.

"At the end of the day, we are prepared for any escalations," Yemen's foreign minister designate Afrah al-Zouba told reporters during a briefing in the Saudi capital Riyadh.

The comments came just hours after the Houthis said they launched fresh drone strikes targeting Saudi Arabian oil infrastructure in response to incursions by the kingdom's drones.

Maritime traffic patterns diverged sharply in recent days across two of the world’s most critical shipping lanes in the Middle East, with markedly fewer vessels transiting the Strait of Hormuz while activity remained robust through the Bab al-Mandab Strait, according to ship-tracking data.

Between July 24 and 26, the Strait of Hormuz — the narrow waterway between the Arabian Gulf and the Gulf of Oman through which about one-fifth of global oil passes — saw just 29 verified crossings.

Of those, 21 vessels were exiting the Middle East Gulf and eight were entering. Routing was split, with 14 using the Iranian unilateral scheme, 14 undetermined and one following the Hormuz Traffic Separation Scheme, MarineTraffic reported.

By contrast, the Bab al-Mandab Strait at the southern end of the Red Sea recorded 100 verified crossings, with traffic nearly balanced: 51 vessels entering the Red Sea and 49 exiting.

The vast majority — 90 — followed the established Traffic Separation Scheme, while 10 made "dark" transits (with transponders off).

Some vessels that had paused or reversed course ultimately proceeded, indicating operators are weighing risks in real time rather than abandoning the route.

Global oil prices fell sharply in early Asian trading on Tuesday after U.S. President Donald Trump said Washington had halted its bombing campaign against Iran to allow diplomacy a chance, easing fears of an immediate disruption to Middle East crude supplies.

A market snapshot at 7:36 am Tokyo time showed:

• Brent crude: $88.36 per barrel, down $8.42 (-8.70%)

• WTI crude: $81.97, down $0.64 (-0.77%)

• Murban crude: $84.43, down $12.62 (-13.00%)

• Natural gas: $2.740, down 0.98%

The steep decline in Brent and Murban crude reflects investors rapidly unwinding the geopolitical risk premium that had been built into oil prices during weeks of escalating conflict between the US and Iran.

Yemen is worried that Houthi rebels are trying to emulate Iran's attempts to control the Strait of Hormuz, a senior official said Monday, after the group announced a maritime blockade of Saudi Arabia. 

The "Houthis want to copy the Iran experience in Hormuz," foreign minister designate Afrah al-Zouba told reporters during a briefing saying the Tehran-backed rebels were "in harmony" with Iranian escalation in the region.  

Global oil prices fell sharply in early Asian trading on Tuesday after US President Donald Trump said Washington had halted its bombing campaign against Iran to allow diplomacy a chance, easing fears of an immediate disruption to Middle East crude supplies.

A market snapshot at 7:36 am Tokyo time showed:

• Brent crude: $88.36 per barrel, down $8.42 (-8.70%)

• WTI crude: $81.97, down $0.64 (-0.77%)

• Murban crude: $84.43, down $12.62 (-13.00%)

• Natural gas: $2.740, down 0.98%

The steep decline in Brent and Murban crude reflects investors rapidly unwinding the geopolitical risk premium that had been built into oil prices during weeks of escalating conflict between the United States and Iran.

Iraqi Prime Minister Ali al-Zaidi called on Monday for an investigation into Saudi Arabia's claim that drones targeting its territory had been launched by pro-Iran groups in Iraq, his spokesman said.

Zaidi directed "the competent security authorities to investigate the statement issued by the ministry of defence of the Kingdom of Saudi Arabia regarding the targeting of the kingdom with drones launched from Iraqi territory", spokesman Sabah al-Numan said in a statement. 

The Islamic Resistance in Iraq, an umbrella network of Iran-backed Shia militias conducting attacks against US and Israeli targets while operating outside Iraq's formal military structure, said the Saudi accusations were "fabrications that serve only as an attempt to justify their inability to respond to the painful Yemeni strikes".

President Donald J. Trump announced that the US would draw on Iranian funds under American control to compensate for damages caused by recent attacks on commercial shipping in the Strait of Hormuz, describing the move as a fair way to hold Tehran accountable without burdening American taxpayers.

Speaking to reporters aboard Air Force One as he traveled to an event in Michigan, Mr. Trump addressed the issue directly. “We’re going to use Iran’s money to pay for the damage they did,” he said. “In other words, the Iran money that we control will be used to pay for damages.”

The president’s remarks come amid heightened tensions in the Gulf, where Iranian forces or proxy groups have been linked to assaults on commercial vessels, disrupting a critical chokepoint for global oil shipments. US Treasury officials are finalising details on the precise extent of the damages, the total value of frozen Iranian assets to be tapped, and implementation timelines.

Day 148: Saudi air defences foil drone attack on oil facilities

Day 147: Iran says military ready as Netanyahu heads to US

Day 146: Iran says it earned $11.5b in oil sales during the war

Day 145: US-Iran war escalates as Tehran targets US bases in Gulf

Day 144: House approves bid to limit war with Tehran as oil hits $100

Day 143: US tightens Iran blockade, redirects 9 commercial ships

Day 142: Air defences roar over Tehran on 11th night of strikes

Day 141: Iran president says country in 'full-scale war' with US

Day 140: US strikes Iran, Gulf states face missile threats as war risks spread