The fragile peace between Iran and the United States has unravelled with stunning speed. Barely two weeks after the two powers inked a 14-point interim agreement intended to halt four months of warfare, they have returned to direct military confrontation in the Persian Gulf. Early Sunday morning, Iranian forces launched missiles and drones against American military installations in Kuwait and Bahrain, triggering air defence responses and civilian alarms across the region. The attack came within an hour of President Donald Trump posting a provocative message on social media, warning that the US might "militarily complete the job" it had started and stating that "the Islamic Republic of Iran will no longer exist" should escalation continue. The statement appeared to signal Washington's willingness to expand military action beyond what the ceasefire envisioned.
The latest round of tit-for-tat strikes reflects a cascade of violations and recriminations that have steadily eroded trust between the two sides. According to the US military, American forces had already struck Iranian targets earlier in the day in response to drone attacks on commercial shipping in the Strait of Hormuz, the world's most critical energy chokepoint through which roughly one-fifth of global oil and liquefied natural gas supplies flowed before the war disrupted traffic. This pattern of action and reaction suggests that neither side views the interim agreement as binding enough to prevent military responses to perceived provocations. The Iranian Islamic Revolutionary Guard Corps justified its Sunday strikes as a defensive measure, claiming that earlier American attacks had violated the ceasefire terms and warning that such violations would "result in the complete halt of all diplomatic processes."
The geographic scope of the conflict has also expanded beyond the initial theatre. In southern Lebanon, Israeli forces have continued operations against Hezbollah militants, killing fighters and striking rocket launchers in areas that Tehran considers integral to the broader peace settlement. Israel, notably, is not a signatory to the US-Iran agreement, which complicates efforts to enforce ceasefire terms across the region. Iran argues that the United States, as Israel's principal ally, bears responsibility for Israeli military action and is therefore violating its commitment to maintain peace in Lebanon. The reality is more nuanced: the US-Iran deal does not formally bind Israel, yet American influence over Israeli operations is substantial enough that Tehran views continued fighting as evidence of bad faith on Washington's part. This dynamic highlights a fundamental weakness in the agreement—it attempts to impose order on a complex multi-party conflict without securing buy-in from all major combatants.
The immediate trigger for Sunday's escalation was Saturday's attack on a Panama-flagged tanker in the Strait of Hormuz, which prompted the US military to respond with strikes targeting Iranian surveillance equipment, communications infrastructure, air defence systems, and drone storage facilities. Iranian officials claimed, without elaboration, that explosions were heard in Sirik in southern Iran, indicating that American strikes penetrated deeper into Iranian territory than purely defensive responses would suggest. The Guards issued a characteristically defiant statement, asserting that "America's blind shots at Sirik will not resolve our dominance over the Strait of Hormuz. But our shots at violators will remind the rest of the vessels of the clear passage route." This rhetoric reveals Iran's underlying objective: not merely to harass shipping but to establish de facto control over the strait and eventually extract tolls from vessels transiting its waters.
The blocking of the Strait of Hormuz has been instrumental in Iran's bargaining strategy throughout the conflict. For months, the waterway remained largely closed to traffic, creating a stranglehold on global energy supplies and raising prices that hurt economies worldwide, including those in Southeast Asia heavily dependent on Gulf oil. The recent ceasefire allowed hundreds of ships—including tankers laden with crude oil—that had been blockaded inside the Persian Gulf to begin exiting, and oil prices tumbled towards pre-war levels as supply surged back into markets. This economic relief has been precarious: even as talks proceed, sporadic attacks on vessels continue, and the risk of renewed disruption looms large. The fact that container ship operators are cautiously resuming transit—CMA CGM's Galapagos vessel exited the strait on Sunday in what the company called "an important milestone"—underscores the fragility of the current situation and the potential for any major escalation to reignite energy price shocks.
Underlying the military manoeuvres is a strategic disagreement over maritime control. The United States has been promoting a southern shipping corridor along the coast of Oman as a safer alternative route that bypasses Iranian territorial waters. Tehran, by contrast, insists that vessels use a northern route passing through its waters, where it can monitor, regulate, and ultimately tax traffic. This dispute reflects deeper tensions about regional hegemony and the ability to extract economic benefit from geography. For Malaysia and other Southeast Asian nations, renewed instability in the Gulf translates directly into uncertainty over oil and gas prices, supply reliability, and the broader health of global trade. Malaysia's energy-intensive industries, from petrochemicals to manufacturing, depend on stable crude prices and predictable shipping patterns. Even brief disruptions to the Strait of Hormuz can ripple across regional markets within days.
The mediated negotiations that produced the initial ceasefire were led by US Vice President JD Vance and Iranian parliamentary speaker Mohammad Baqer Qalibaf and held in Switzerland a week before the agreement's announcement. Washington had waived certain sanctions on Tehran as a confidence-building measure, yet the fighting and accusations resumed almost immediately. This pattern suggests that the core issues driving the conflict—Iran's nuclear programme, the role of proxy militias in the region, and the distribution of power between Washington and Tehran—remain fundamentally unresolved. The 14-point agreement was always intended as an interim measure to halt active combat and create space for deeper negotiations, but the rapid breakdown indicates that neither side has sufficient incentive to exercise restraint while talks proceed. The agreement's weakness may also reflect the fact that it was negotiated under pressure and without sufficient buy-in from key regional actors such as Israel and the various non-state armed groups that operate within Iran's sphere of influence.
Regional allies have reacted with alarm. Bahrain, which hosts significant US military infrastructure, urged the UN Security Council to convene an urgent session to hold Iran accountable for Sunday's attacks. Kuwait said its air defences had intercepted two ballistic missiles with no reported damage or casualties. These countries, while nominally aligned with the United States, face genuine risk from Iranian retaliation and have limited ability to defend themselves in a wider conflict. The fact that civilian populations in Bahrain experienced alarms and that residential buildings were damaged—even without casualties—demonstrates that the current trajectory poses dangers to ordinary residents, not merely military personnel. This civilian dimension is often overlooked in high-level political discussions but shapes public perception and political pressure within the region.
The role of Lebanon and Hezbollah in complicating the ceasefire cannot be understated. Iran views its relationship with Hezbollah as central to its regional influence and security, yet the militia's operations in southern Lebanon bring it into direct conflict with Israel, which invaded Lebanese territory in March to pursue Hezbollah fighters. Multiple US-brokered ceasefires between Israel and Lebanon have been agreed in recent weeks, including one on Friday, but they have had only limited effect. Israel has refused to commit to withdrawing from Lebanese territory it has occupied, while Hezbollah has declined to disarm as long as Israeli forces remain present. This stalemate means that despite the US-Iran ceasefire agreement, fighting continues in Lebanon, and Tehran can plausibly claim that Washington is failing to uphold its end of the bargain by not constraining Israeli operations. The complexity of multi-party conflict in the region defies simple bilateral agreements.
Looking forward, the trajectory appears increasingly concerning. Trump's public statement that the US might be "forced to militarily complete the job" suggests an escalatory ceiling that could involve far more devastating operations than those conducted to date. If the US were to launch a comprehensive military campaign against Iranian infrastructure—whether nuclear facilities, military installations, or command centres—the consequences would be catastrophic for global oil markets, international shipping, and the broader stability of the Middle East. Such action could trigger widespread Iranian retaliation against American facilities and interests across the region, potentially drawing in allied nations and non-state actors. For Malaysia and Southeast Asia, a major escalation would be economically ruinous: oil prices could spike to levels that cripple manufacturing competitiveness, supply chains could be disrupted for months, and the region could face a refugee crisis if instability spreads.
The current situation reflects the fundamental challenge of conflict resolution in the Middle East: agreements reached at the diplomatic table must be enforced on the ground by actors with divergent interests and limited trust in one another. The US-Iran interim deal was always a gamble that temporary military restraint could create psychological space for negotiations on deeper issues. The rapid breakdown suggests that both sides entered the agreement with reservation and were quick to revert to confrontation at the first sign of the other's bad faith. Without mechanisms for managing disputes, escalation control, or binding third-party arbitration, agreements of this sort remain fragile. The international community, including ASEAN nations with significant economic stakes in Gulf stability, must hope that cooler heads prevail before the current military exchange spirals into a conflict far more destructive than the fighting of recent months.
