Policy Responses to the 2026 Iran Conflict

⚠ LIVE SITUATION ALERT - 11 JUNE 2026
The conditional ceasefire agreed 7-8 April has fractured[cite: 4]. Fresh US strikes on Iran were reported 10-11 June 2026. Trump has threatened total control of Iran's oil industry[cite: 4]. Ceasefire market odds: 9% probability of peace deal by 30 June[cite: 4]. This briefing reflects all measures through 4 June 2026.

1. Situation as of 11 June 2026

The 2026 Iran war began 28 February when the US and Israel launched strikes on Iran, killing Supreme Leader Ali Khamenei[cite: 4]. Iran retaliated by closing the Strait of Hormuz and attacking Gulf shipping, energy infrastructure and US-allied Arab states.

DIMENSION	STATUS AS OF 11 JUNE 2026
Hormuz	Effectively closed since early March[cite: 4]. WTO data: 95% reduction in crude oil shipments, 99% reduction in LNG from Gulf ports[cite: 4]. IEA: greatest global energy security challenge in history.
Ceasefire	Agreed 7-8 April (Pakistan-brokered), repeatedly suspended[cite: 4]. Fresh US-Iran exchanges of fire 10-11 June[cite: 4]. Ceasefire described as 'teetering'. No peace deal imminent.
Reopening timeline	UAE state oil company: full Hormuz flows will not resume until 2027 even if a deal is reached quickly.
Shipping reroute	Westbound tankers rounding Cape of Good Hope: +14 days, +$2m fuel cost per voyage.
Oil price	Brent crude peaked at $120/barrel vs $70 pre-conflict. Macquarie warned of $200/barrel if conflict persists.

2. International Institutional Assessments

INSTITUTION	KEY ASSESSMENT - JUNE 2026
OECD	June 2026 Economic Outlook: global GDP growth revised to 2.8% for 2026 (from 3.4% in 2025). Prolonged disruption scenario: 2.1% in 2026 and 1.8% in 2027. G20 inflation forecast raised to 4%. OECD explicitly calls for targeted household energy support and international cooperation.
WTO	March 2026: merchandise trade growth revised to 1.9% for 2026 (from 4.6% in 2025). Downside scenario: 1.4% if energy prices remain elevated. Services trade growth cut from 4.8% to 4.1%. Hormuz blockage of fertiliser urea threatens food security in India, Thailand and Brazil.
IEA	Characterised the Hormuz closure as the largest oil supply disruption in recorded history[cite: 4]. Coordinated IEA member SPR releases activated[cite: 4]. Over 50% of global refinery capacity impacted[cite: 4]. EU gas storage target: 80% by winter 2026-27.
WCO	Member administrations advised to apply risk-based clearance for rerouted cargo and monitor origin documentation for goods previously transiting Gulf ports. HS classification disputes emerging on rerouted energy cargoes[cite: 4]. WCO SAFE Framework protocols remain the reference standard.

3. United Kingdom

The UK economy has been forecast to slow to 1.1% growth in 2026.

Heating oil relief (GBP 50m+): Targeted subsidy for low-income households reliant on heating oil.

Kazakh oil general licence: HM Treasury issued a general licence permitting transactions involving Kazakh oil transiting Russia (GTA ref 97024).

Iran sanctions (FCDO): UK sanctions on Iranian individuals and entities remain active[cite: 4]. UK firms must screen against both UK and US sanctions lists.

Merchant fleet advisories: UKMTO advises vessels to avoid the Persian Gulf threat zone[cite: 4]. War-risk insurance premiums are 3-4x normal levels.

UK COMPLIANCE ALERT: Three major EU banks have restricted letters of credit for cargo touching Bandar Abbas, Jebel Ali and Dammam. Confirm LC availability with your trade finance desk.

4. European Union

EU governments have collectively spent approximately EUR 60 billion on response measures in the first 100 days.

State-aid emergency rules: European Commission April 2026 package allows member states to subsidise up to 50% of fuel and fertiliser price increases.

Gas storage coordination: EU gas storage was approximately 31% full in April. Target: 80% by winter 2026-27.

EU sanctions on Iran (June 2026): EU member states sanctioned Iranian individuals over the Hormuz closure. EU sanctions do not carry secondary (extra-territorial) effect.

Russian oil ban delayed: Proposed permanent ban on Russian oil pushed back amid Iran war price spikes.

5. Sanctions Jurisdiction Comparison

FEATURE	US (OFAC)	EU	UK (FCDO)
Secondary sanctions	Yes	No	No
Chinese shipping designations	Yes[cite: 4]	Not yet	Not yet

6. United States

Jones Act waiver: Issued mid-March, extended to 16 August 2026.

SPR releases: Approximately 58 million barrels released. SPR now at its lowest level since January 2024.

OFAC sanctions escalation: April 24: China-based refinery and approximately 40 shipping firms designated. June 2026: Iran's military oil-sales arm sanctioned.

7. Scenario Planning Matrix

SCENARIO	PROBABILITY	BUSINESS IMPLICATION
Ceasefire holds, Hormuz partly reopens	Low (9%)	Re-contract cautiously. Retain Cape routing as baseline.
Hormuz brinkmanship continues	Medium-High	OECD 2.8% scenario. Elevated energy costs through 2026.
Full Hormuz closure, Iranian mines	Low-Medium	OECD 2.1% scenario. Activate full supply chain contingency plans.

8. Actionable Checklist by Role

Energy buyer: Re-contract with war-risk and rerouting clauses. Review SPR release allocations.

Agri-food importer: Apply for EU fuel and fertiliser subsidy (50% cost relief).

Logistics provider: Update routing to Cape baseline. Recontract war-risk insurance.

Trade compliance: Run full OFAC SDN screen on all counterparties. Audit Iranian and Gulf-adjacent supply chain exposure.

CFO / Finance: Confirm LC availability before contracting for Gulf-adjacent cargo.