We’re shutting this live coverage now but you can read our full report as the Middle East returns to the brink of full-scale war. Below is a summary of the latest events. Thanks for joining us.

• The US military said it fired on Iranian forces and sank six small boats targeting civilian ships as it moved to reopen the strait of Hormuz on Monday and Tehran sought to reassert its blockade.

• The US-allied United Arab Emirates came under repeated attacks from Iran for the first time since a ceasefire took hold in early April. One sparked a fire at a key oil facility in Fujairah and wounded three Indian nationals, authorities said.

• Donald Trump said Iran would be “blown off the face of the earth” if it attacked US vessels trying to reopen a route through the Hormuz strait under a US military operation titled Project Freedom.

• Two American-flagged merchant ships had successfully transited the strait on Monday as part of the project, the military said.

• Earlier, Iran’s military central command warned that it would strike any US naval vessel approaching the strait, and claimed to have struck a US frigate in the area with two missiles. US Central Command denied that claim, saying no US Navy ships had been struck and US forces were continuing to enforce the naval blockade on Iranian ports.

• Iranian foreign minister Abbas Araghchi said the US and the UAE “should be wary of being dragged back into quagmire”. He also said there was “no military solution” to the crisis.

• In Oman, two people were injured by an attack on a residential building in Bukha, along the coastline of the strait of Hormuz, an Omani state news agency reported.

• The British military reported two cargo vessels on fire off the UAE.

• Stocks sank on Tuesday amid the fresh spike in Middle East tensions.

• Japan took delivery of its first stockpile of oil from Russia since global supplies were choked off by the Hormuz strait’s closure, reports said.

• A fire onboard a South Korean-operated vessel in the strait of Hormuz that had an explosion has been extinguished, ship operator HMM said. South Korea’s foreign ministry said no casualties were reported, while Trump blamed Iran for the attack.

• The UK and Saudi Arabia both called for de-escalation after reported barrage of Iranian attacks on the UAE. British PM Keir Starmer said: “Iran needs to engage meaningfully in negotiations to ensure the ceasefire in the Middle East endures, and a long-term diplomatic solution is achieved.”

• Inflation is picking up and the global economy could face a “much worse outcome” if the war in the Middle East drags into 2027 and oil prices hit about $125 a barrel, the head of the International Monetary Fund warned.

Japan has taken delivery of its first stockpile of oil from Russia since global supplies were choked off by the closure of the strait of Hormuz at the start of the Iran war, reports said.

A tanker carrying crude that was produced as part of a Sakhalin-2 natural gas development project reached the coast of Imabari in western Japan on Monday, reported the Asahi Shimbun newspaper, TV Tokyo and other media, citing unnamed officials of wholesaler Taiyo Oil.

Japan, which depends on the Middle East for about 95% of its oil imports, has tried to diversify sources of energy procurement since Tehran effectively shut the strait in late February.

The project in Russia’s Sakhalin region is not subject to global economic sanctions against Moscow that were put in place after it invaded Ukraine in 2022, AFP is reporting.

Taiyo Oil received a request from the economy ministry to take in the petroleum, the reports said. Officials of the company could not immediately be reached to confirm the reports.

The global oil supply squeeze is inflicting an “enormous impact” on the Asia-Pacific region, Japanese prime minister Sanae Takaichi said on Monday after talks with Australia’s prime minister.

Japan and Australia would respond urgently to secure stable energy supplies, she said.

Stockmarkets dropped on Tuesday amid the fresh spike in Middle East tensions, with the two sides appearing to be no closer to a deal to reopen the strait of Hormuz.

And while oil prices fell, they held most of the huge gains seen on Monday after the two countries traded fire over the key waterway and the United Arab Emirates reported an attack on an energy installation in Fujairah.

Crude prices surged on Monday – with Brent up almost 6% – after a US admiral said American forces sank six small Iranian boats. Iran denied any had been sunk and earlier fired warning shots at US warships.

Both main oil contracts slipped on Tuesday, with West Texas Intermediate shedding more than 1%. However, it was hovering just below $105, and Brent was slightly lower at a little more than $113, AFP reports.

Fears that the ceasefire – in place since early April – could fall apart weighed on Asian equities, with Hong Kong, Sydney, Singapore, Wellington and Taipei all down.

The United Arab Emirates’ education ministry has ordered schools to implement remote learning for the rest of this week for safety reasons after Iran’s attacks on the country.

Drone and missile strikes were reported in the UAE throughout Monday and the country said they marked a “dangerous escalation” and it reserved the right to respond.

The UAE said the Iranian attacks included one on its vital Fujairah energy hub in which three Indians were wounded.

Fujairah lies away from the strait of Hormuz, making it one of the few export routes for Middle East oil that does not require transit through the waterway.

Iran’s state television network reported military officials as saying they attacked the UAE in response to the “US military’s adventurism”.

The head of the International Monetary Fund has warned that inflation is already picking up and the global economy could face a “much worse outcome” if the war in the Middle East drags into 2027 and oil prices hit about $125 a barrel.

IMF managing director Kristalina Georgieva said the continuation of the war meant that the global lender’s “reference scenario” assuming a short-lived conflict – which forecast a minor growth slowdown to 3.1% and a minor increase in prices to 4.4% – was no longer possible.

Georgieva said:

This scenario, with every day that passes, is further and further behind in the rear-view mirror.”

The continuation of the war, a forecast of an oil price around or above $100 per barrel and rising inflationary pressures meant the IMF’s “adverse scenario” was already in effect, she said in Washington on Monday, quoted by Reuters.

Returning to the South Korean-operated vessel that had an explosion and fire onboard in the strait of Hormuz, the blaze has now been extinguished, the ship operator HMM says.

South Korea’s foreign ministry said no casualties were reported and authorities were investigating what caused the fire on the HMM Namu on Monday evening. Donald Trump said it was caused by an Iranian attack.

The fire broke out in the engine room of the Panama-flagged cargo ship with 24 crew members onboard including six Korean nationals, an HMM spokesperson said, adding that the cause of the blaze was unclear and being investigated.

The fire had now been extinguished, surveillance camera footage showed, and it could take several days to tow the vessel to Dubai, the spokesperson said, cited by Reuters.

Trump said Iran fired shots at the South Korean cargo ship and other targets as US forces launched the operation to get stranded ships through the strait of Hormuz. He urged South Korea to join the effort.

Saudi Arabia has denounced Iran’s attacks on the UAE – the first on the US ally since Washington’s ceasefire with Tehran took effect about a month ago – and called for de-escalation in the region.

The Saudi foreign ministry said in a statement posted on X:

The Foreign Ministry expresses the Kingdom of Saudi Arabia’s condemnation and denunciation in the strongest terms of the Iranian targeting – through missiles and drones – of civilian and economic facilities in the brotherly United Arab Emirates, as well as a vessel belonging to an Emirati company.

The ministry said Saudi Arabia affirmed its solidarity with the UAE and called on Iran to stop the attacks and “respect the principles of good neighborliness”.

More now on Keir Starmer’s comments: the British prime minister also condemned Iran’s drone and missile strikes targeting the United Arab Emirates.

Starmer called on Iran to engage in diplomacy to prevent further escalation in the Middle East, the prime minister’s office said on Monday, cited by Reuters.

Starmer said:

We stand in solidarity with the UAE and will continue to support the defence of our partners in the Gulf. This escalation must cease. Iran needs to engage meaningfully in negotiations to ensure the ceasefire in the Middle East endures, and a long-term diplomatic solution is achieved.”

British prime minister Keir Starmer has reportedly said the escalation in the Middle East must cease and Iran needs to engage meaningfully in negotiations to ensure the ceasefire endures.

More on this soon.

The ceasefire in the Iran war is abruptly facing its most perilous moment after the US began trying to open the strait of Hormuz to allow hundreds of stranded commercial ships sail out.

Recapping the latest events, the US military said it fired on Iranian forces and sank six small boats targeting civilian ships as it moved to reopen the strait on Monday.

The United Arab Emirates – a key American ally – said it had come under attack from Iran for the first time since the fragile ceasefire took hold in early April, as the Associated Press reports.

The US military said two American-flagged merchant ships had successfully transited the Hormuz strait on Monday as part of a new initiative.

The UAE defence ministry said its air defences had engaged 15 missiles and four drones fired by Iran. Authorities in the eastern emirate of Fujairah said one drone sparked a fire at a key oil facility, wounding three Indian nationals.

The British military reported two cargo vessels ablaze off the UAE.

Tehran did not outright confirm or deny the attacks but – as just mentioned – Iranian foreign minister Abbas Araghchi said that both the US and the UAE “should be wary of being dragged back into quagmire”.

Iran’s foreign minister has said events in the strait of Hormuz show there is “no military solution to a political crisis”.

Abbas Araghchi also said in a post on X that “Project Freedom is Project Deadlock”, referring to Donald Trump’s name for the US operation to help stranded ships through the strait of Hormuz.

Araghchi said talks were making progress with Pakistani mediation, while also warning:

The U.S. should be wary of being dragged back into quagmire by ill-wishes. So should the UAE.

• Donald Trump threatened that Iran will be “blown off the face of the earth” if it attacks US vessels trying to reopen a route through the strait of Hormuz. The US president’s comments came as the US launched an operation – so-called “Project Freedom” – on Monday to help hundreds of ships trapped with their crews in the Gulf, dragging the region back to the brink of full-scale war. Tehran sought to reassert its blockade on the strait, while the US military claimed to have destroyed six Iranian small boats and intercepted both Iranian cruise missiles and drones, which was denied by Tehran. Here’s our story.

• Earlier, Iran’s military central command warned that it would strike any US naval vessel approaching the strait, and claimed to have struck a US frigate in the area with two missiles. US Central Command denied that claim, saying that no US Navy ships had been struck and that US forces were continuing to enforce the naval blockade on Iranian ports.

• US Central Command also said that two US-flagged merchant vessels crossed through the strait of Hormuz on Monday as US Navy guided-missile destroyers operate in the Gulf. Shipping company Maersk later said that one of its US-flagged commercial vessels had successfully exited the strait under US military protection.

• Meanwhile, the United Arab Emirates defence ministry said that its air defences engaged 15 Iranian missiles and four drones in a fresh barrage on Monday. Fujairah had also said earlier that a fire broke out at the Fujairah Oil Industry Zone, the largest oil storage zone in the UAE, following what they described as a drone attack originating from Iran.

• In neighbouring Oman, two people were injured by an attack on a residential building in Bukha, along the coastline of the strait of Hormuz, an Omani state news agency reported.