US-Iran conflict converges on Hormuz

Abu Dhabi, Dubai, Riyadh and Doha have spent years trying to build globally competitive technology sectors through sovereign wealth, tax incentives, accelerator programs and direct investment.

Despite attacks in the region and renewed fighting between the United States and Iran, founders have largely remained in the region and government-backed programs continue to attract applicants.

None of the 27 companies selected for the February intake of Hub71, Abu Dhabi’s startup program, withdrew after the conflict began, according to Bloomberg. The program’s latest cohort also received a similar number of applications and was the first made up entirely of companies from outside the United Arab Emirates.

The financial effects, however, may not yet be fully visible. Middle East and North African startups raised $1.35 billion in the first half of 2026, down more than 20% from a year earlier, according to data platform Magnitt. The number of deals fell even more sharply to 214, while second-quarter activity dropped to its lowest level in at least two years.

“I don’t believe that the impact of the war has come into the numbers yet, that will come in Q3 and Q4,” Magnitt chief executive Philip Bahoshy told Bloomberg TV, adding that investors were already shifting their attention from early-stage companies toward more established businesses.

Some startups are also facing higher fuel, shipping and insurance costs, worsening cash flow and longer delays in receiving payments. Bloomberg cited one investor as saying that a sovereign investor withdrew a $1 million commitment from a funding round when the war began.

Regional governments are continuing to spend heavily. Hub71 offers successful applicants $140,000 in investment and incentives, while Qatar expanded its Fund of Funds program from $1 billion to $3 billion before the conflict. Startup Qatar has awarded more than $51 million to 45 companies, including 11 since the fighting began.

The Persian Gulf’s startup markets remain smaller than established centers in the United States, Europe and Asia, with limited late-stage financing, technology listings and specialist talent. But founders and investors told Bloomberg that access to capital, lower costs and government support continued to outweigh the risks for many companies.

“Iran absolutely has capabilities to get real-time, immediate, and continuous location information,” Gary Miller, a senior research fellow at cybersecurity watchdog Citizen Lab, told the FT.

“It would surprise me very much if Iran were not using SS7, or mobile network access in the region, to track US users.”

Telecom networks under pressure

Middle Eastern telecom networks, according to the report, blocked repeated requests known as SS7 pings, which can reveal the approximate location of phones roaming outside their home networks.

Two cybersecurity experts who reviewed the data told the FT the activity appeared to be part of a coordinated effort to locate specific devices.

The tracking attempts came in the build-up to the US-Israeli attack on Iran in late February and continued during the early days of the conflict, when Iran launched missile and drone attacks on US forces and military installations across the region.

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A person familiar with the matter told the FT that Persian Gulf officials suspected Iran or allied groups had exploited roaming agreements with regional mobile operators to track US personnel.

Separately, a US official speaking anonymously said actors linked to Iran were also believed to have used commercial advertising databases to locate phones in Iraqi Kurdistan.

US lawmakers renew security concerns

US Central Command told Congress in April that it had received multiple threat reports about adversaries exploiting commercial location data to monitor or target US personnel deployed in the region.

However, Centcom said it had taken force-protection measures to safeguard its forces, while a US official told the FT there was no evidence that data tracking had played a significant role in attacks.

At least some blocked tracking attempts could be linked to an Iranian mobile operator based on a shared technical fingerprint.

“This appears to be very specific user targeting,” Miller told the FT. “They are targeting specific devices.”

The Iranian embassy in London did not immediately respond to the newspaper's request for comment.

The report also said Iran was suspected of using commercially available advertising technology to identify hotels housing US government employees and contractors.

Advertising identifiers assigned to smartphones can enable devices to be tracked without directly compromising the phones themselves.

US lawmakers cited by the FT said the findings underscored longstanding concerns about the military's exposure through commercial location data.

Ron Wyden, a Democratic senator, said he had warned successive administrations for years about the national security risks, while Republican Representative Pat Harrigan said legislation was needed to prevent technology companies from selling location data linked to government employees.

"We're taking over the strait. They've got nothing," Trump said in a phone interview with Fox News.

Trump said the United States would assume responsibility for protecting shipping through the strait and expected other Middle Eastern countries to pay for the mission.

"And we're going to keep the strait, and we'll probably run it. We'll become the guardian of the strait. Maybe we'll call it the 'guardian angel of the strait.' And we should be reimbursed for that. When we do that, we're going to be reimbursed because the other nations are very wealthy, they're on our side."

He later elaborated on the proposal in a Truth Social post, saying Washington would restore a blockade targeting Iranian shipping while allowing all other commercial traffic to pass.

"The Hormuz strait is open, and will remain open, with or without Iran. We are reinstating the Iranian blockade, so named because it is only stopping Iran's ships or customers from entering or leaving. All other countries will have fair and open use of the strait," he said.

"The U.S.A. will be, from this point forward, known as 'the guardian of the Hormuz strait,'" Trump added.

He also said the United States would charge countries using the waterway a fee equal to 20% of the value of cargo shipped to cover "any and all costs necessary to do the job of providing safety and security to this very volatile section of the World." It was not immediately clear whether US allies had agreed to such an arrangement.

Trump said his administration had believed it had reached a lasting understanding with Tehran before deciding Iran had violated it.

"What nobody knows, we had a deal. It was a done deal, and then they broke it. They always break it. We've had 10 deals with these people, and so we're just going to hit them very hard."

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  Trump reinstates Iran naval blockade, notifies Congress of renewed fighting

The remarks came after the United States carried out another round of strikes against Iran following Iranian attacks on US facilities across the Persian Gulf and Tehran's renewed declaration that the Strait of Hormuz was closed.

The exchange has effectively collapsed the interim memorandum of understanding reached in June, which had aimed to reopen the waterway and provide a framework for further negotiations.

Iran says it charges less

Iranian Foreign Minister Abbas Araghchi rejected Trump's statement that Washington would become the strait's guardian.

"POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service," he said. "Iran has always been the guardian of the Strait and will remain so forever. 20% is of course too much. We will be fair."

New attacks on nuclear sites

Trump also said on Monday that Iran's Pickaxe Mountain nuclear site could soon become a US target.

Speaking to conservative radio host Hugh Hewitt, Trump said the United States was closely monitoring the deeply buried facility.

"A nice big fat shot right in the front door," Trump said, adding the United States would "probably give Pickaxe a shot relatively soon."

Trump also indicated further military action was imminent.

"It was a test. We didn't know," he said of the memorandum of understanding with Iran. "Memorandums of understanding, when you're dealing with sleazebags, don't mean much. It was sort of a test, and they weren't there. They didn't honor the test."

The renewed campaign has also reignited opposition in Congress.

Democratic Senator Adam Schiff said he would introduce a new War Powers Resolution this week to force another Senate vote on ending US military involvement in Iran, while Senate Democratic leader Chuck Schumer said Trump's "so-called understanding" with Iran had collapsed.

"Enough is enough. End the war," Schumer wrote on X.

Critics from both parties also argued the administration was stretching its legal authority. "The president can't just wish away months of war he said would last only four to six weeks," a senior Democratic aide in the House of Representatives told Reuters.

Meanwhile, the US military operation has continued alongside Trump's remarks. US Central Command said American forces have struck more than 300 Iranian military targets over the past week and announced additional attacks on Monday.

"These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz," CENTCOM said.

The revenge-laden rhetoric that dominated the week-long mourning ceremonies for former Supreme Leader Ali Khamenei is rapidly evolving into something broader.

State media have published images depicting not only US officials but also European leaders, including France’s Emmanuel Macron and Italy’s Giorgia Meloni, as targets.

On Monday, July 13, Ali Mahdian, a hardline seminarian and academic associated with the late Ayatollah Mohammad-Taqi Mesbah Yazdi, the ideological father of the ultraconservative Paydari Front, went further still, seeking to provide a religious justification for political assassination.

Writing in the Tehran municipality’s daily Hamshahri, Mahdian presented the killing of Western leaders and those he held responsible for the deaths of senior Iranian figures not as terrorism but as a “divine mission.”

Citing Ayatollah Khomeini’s fatwa against author Salman Rushdie, he rejected the argument that a sovereign state should not engage in targeted killings. Referring to remarks by Quds Force commander Esmail Qaani, Mahdian even suggested that an actor inside the United States might carry out such an attack.

“This is a global wrath… an era in which the head of Satan must be cut off,” he concluded with an apocalyptic call to action. “Everyone must help: scholars, clerics, preachers, speakers, broadcasters, channel writers, officials, Iranians, Iraqis, everyone.”

The significance lies less in the practicality of his appeal than in how openly such arguments are now being advanced in an established state newspaper.

Late last week, US forces resumed strikes on Iranian military infrastructure, while Iran retaliated against American bases across the Persian Gulf. President Donald Trump announced a renewed blockade of Iranian shipping, saying the United States would keep the Strait of Hormuz open.

Tehran, meanwhile, says transit through the strait is no longer possible because of US military action and insists it retains control over the strategic waterway, while threatening further retaliation.

The same day, Kayhan offered a strategic counterpart to Mahdian’s theological argument.

In a commentary by Alireza Mashouri, introduced as a scholar of international relations, the newspaper called for Iran to abandon its longstanding policy of “strategic patience” in favour of what he termed “offensive diplomacy.”

“When a state exercises restraint, enemies do not see it as moral high ground or peace-loving nature; they calculate it as a lack of capability or will to respond,” he wrote.

Mashouri argued that Iran’s year of compliance after the US withdrawal from the 2015 nuclear deal convinced its adversaries that Tehran lacked the will to respond, paving the way for “maximum pressure,” targeted assassinations and progressively bolder military attacks.

“In global politics, there is no such thing as a moral ledger where a state is rewarded later for its past good behavior,” Mashouri wrote. “This does not mean starting a war; it means making the cost of aggression real for the enemy.”

None of this necessarily means that Tehran has adopted political assassination or uncontrolled escalation as formal policy.

Iran has a long history of violence against opposition figures and regional adversaries, but public appeals for the killing of sitting Western leaders represent a notable escalation in the language emerging from influential hardline circles.

More significant than the rhetoric itself may be the erosion of the political and ideological case for restraint. As US and Iranian forces exchange attacks and the dispute over Hormuz becomes another front in the war, hardline voices increasingly portray negotiation not as a means of protecting Iran but as proof of weakness.

What began as funeral rhetoric is becoming something more consequential: an argument that the era of strategic patience is over, and that peace now demands a justification war no longer does.

Relations deteriorated sharply after Iran's Revolutionary Guards (IRGC) said they had launched a "heavy and surprise attack" on logistical support facilities and aircraft carrier refueling infrastructure at the Omani port of Duqm on Sunday.

Oman condemned what it described as "irresponsible acts" and summoned Iran's ambassador in protest, marking a dramatic deterioration in relations between the two countries.

The military escalation appears to have followed the collapse of negotiations over a proposed framework for managing maritime traffic through the Strait of Hormuz.

According to a CNN report, Oman proposed maintaining the existing system for vessels using the southern shipping lane through Omani territorial waters. Ships entering Iranian territorial waters, however, would require Tehran's approval, though they would not pay transit fees.

The proposal appears to have fallen short of Tehran's broader ambition to assert greater authority over traffic through the strategic waterway, including a reported plan to charge ships for "management services."

Iranian officials confirmed that such discussions had taken place.

Foreign Minister Abbas Araghchi said he had discussed “management of the Strait of Hormuz and maritime traffic" with Omani counterpart Badr Albusaidi. Foreign Ministry spokesman Esmail Baghaei later confirmed the talks had failed, blaming US pressure on Oman.

"Our effort was to reach, through consultations with Oman, a mechanism that would ensure the safe passage of ships through the Strait of Hormuz. Unfortunately, because of overt and covert US pressure on Oman, this was not achieved," he said.

Tehran hardens its position

The collapse of negotiations was followed by increasingly confrontational rhetoric from Iranian military officials and hardline politicians.

On Tuesday, the spokesman for Iran's Khatam al-Anbiya Central Headquarters warned that Iran's armed forces would respond forcefully to "any disruption or insecurity affecting commercial vessels and oil tankers by the US military outside the routes designated by Iran and without authorization from the armed forces."

He also warned regional states that "any cooperation with the United States and logistical support for its military will be regarded as a war against Iran's sovereignty and national security," adding that any wider conflict would engulf the region.

Ali Khezriyan, a member of parliament's National Security Committee, declared that Iran would pursue control of the Strait of Hormuz "with or without Oman." He warned that if Muscat failed to cooperate or secretly assisted Iran's adversaries, "its territory will not be safe from Iranian missiles."

Other lawmakers echoed the message. Ebrahim Rezaei said Oman should recognize Iran as the region's dominant power, while Mahmoud Nabavian argued that the IRGC should impose "exclusive management" of the strait, rejecting any arrangement requiring Iran to share authority with Oman.

Beyond Hormuz

Analysts suggested the confrontation extends well beyond the immediate military exchange.

Middle East analyst Ahmad Taqaddosi noted that Duqm sits on the Arabian Sea, outside the Strait of Hormuz, allowing US naval vessels to dock, refuel and undergo maintenance without entering the Gulf. Under a 2019 agreement, the United States has access to both Duqm and Salalah.

"From this perspective, Iran's claimed attack targeted not merely a port but part of the US Navy's operational rear base in the northern Indian Ocean," he wrote.

Energy analyst Abdollah Babakhani argued that the dispute ultimately reflects Tehran's fear of losing strategic leverage.

"Any mechanism that creates a permanent and independent route through Omani waters for the bulk of global energy trade could, over the long term, reduce Iran's geopolitical weight in Hormuz," he wrote, arguing that restoring the traditional shared shipping corridor would better preserve Iran's strategic position.

Debate inside Iran

Hardliners argued that allowing unrestricted passage through Omani waters while requiring authorization only for ships entering Iranian waters would surrender Tehran's leverage, insisting that management of the Strait of Hormuz must remain exclusively in Iranian hands.

Critics countered that Oman has long served as one of Tehran's most important diplomatic intermediaries.

One moderate commentator wrote: "The Strait of Hormuz is not our exclusive property. Oman's territorial waters are part of it, and Oman's wishes must also be respected. Claiming absolute control is adventurism and folly."

Others warned that another regional war could leave Tehran simultaneously alienating its own population, undermining relations with mediators such as Oman and Pakistan, and weakening its strategic position in the strait.

The confrontation leaves Tehran facing a strategic paradox. Its effort to convert military leverage in Hormuz into political control over regional shipping has pushed it into conflict with one of its closest Gulf partners while encouraging alternatives to the very influence it is trying to preserve.