Iran downs US drone over Strait of Hormuz amid talks

Iran's Islamic Revolutionary Guard Corps (IRGC) said it shot down an MQ-9 drone over the Strait of Hormuz on August 3.1 The IRGC stated the drone was intercepted and hit by an air defense system of its aerospace force.1 The IRGC did not provide additional details about the incident in its statement.1

A cargo ship reported being struck by a projectile off the coast of Oman in the Strait of Hormuz on August 4.7 The cargo ship incident occurred as the US and Iran exchanged conflicting claims about ongoing peace negotiations.7 US President Donald Trump said a halted strike on Iran would have been the 'biggest attack since World War Two'.2

Trump criticized Iran's refusal to confirm negotiations, calling the country's stance 'incredibly hypocritical'.3 Iran denied being in negotiations with Washington, according to a report citing Iranian officials.3 The Strait of Hormuz is a 33km-wide chokepoint through which about a fifth of the world's oil supply passes.4

Oil prices fell to the lowest in over three weeks as optimism grew about a potential US-Iran agreement.4 Hopes for an agreement to revive Strait of Hormuz traffic lifted US stocks to all-time highs on August 3.5 A report suggested a potential deal to reopen the Strait of Hormuz could give Iran new strategic leverage.6