Drones strike US Embassy in Riyadh as Iran shuts Strait of Hormuz, escalating regional war and rattling global markets.
The United States Embassy in Riyadh has been hit by two drones as Iran announces the closure of the Strait of Hormuz, dramatically escalating a widening regional conflict that has already left more than 600 people dead in Iran and Lebanon.
Saudi authorities confirmed the drones struck the US diplomatic compound in the Saudi capital, causing a limited fire and minor structural damage. In response, the US Embassy in Riyadh cancelled all routine and emergency consular services across its missions in Riyadh, Jeddah, and Dhahran and ordered staff and visitors to “shelter in place”.
“Avoid the Embassy until further notice due to an attack on the facility,” the mission said in a statement, urging American citizens to maintain personal safety plans.
The attack comes as Israeli forces intensify strikes on Tehran and Beirut, including a reported hit on Iran’s state broadcaster, amid a mounting death toll across both countries.
The US diplomatic mission has also updated its travel advisory for Iraq, ordering non-emergency government personnel to leave the country “due to security reasons”. US staff in Baghdad have been barred from using the city’s international airport over security risks.
State Department official Mora Namdar issued an urgent warning on X, telling US citizens to “DEPART NOW” from more than a dozen countries using available commercial transport because of “serious safety risks”.
The countries listed include Bahrain, Egypt, Iran, Iraq, Israel, the occupied West Bank and Gaza, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and Yemen.
Tehran’s decision to close the Strait of Hormuz one of the world’s most critical oil and gas transit chokepoints has triggered alarm in energy markets and defence circles.
Michael Mulroy, a former US Deputy Assistant Secretary of Defense, said Washington is focusing on neutralising threats from the Iranian navy, particularly the potential deployment of sea mines.
“The maritime issue has become very critical,” Mulroy said, warning that any mining of the strait could have lasting global consequences.
Noting the vast volumes of oil and gas that pass through the narrow waterway daily, he said: “Not being able to use the strait would not only stop the flow to countries around the world that rely on it [for energy] but also it does devastating actions against the Gulf countries.”
He added that clearing sea mines could take months and delay insurers from covering vessels transiting the area.
“If they can lay sea mines in any part of it, which is not very difficult, it could take multiple months to be completely clear and to convince insurance companies to allow and insure vessels to go through those straits,” Mulroy said. “It could have a major impact for the long term if that were to actually happen.”
He noted that Iran has previously disrupted shipping simply by firing at vessels moving through the strait.
Financial markets across Asia react sharply to the spiralling conflict, with investors dumping energy, aviation, shipping and transport stocks amid fears of prolonged instability.
South Korea records one of the steepest losses, with its benchmark index closing down about 5 percent in morning trading. Japan’s Nikkei index falls 2.3 percent.
China’s markets show mixed movement. After a roughly 2 percent decline on Monday, Hong Kong and Shanghai trade only slightly lower on Tuesday, down just under half a percent.
Analysts say Beijing may be intervening to stabilise markets ahead of its upcoming “Two Sessions” political meetings. China’s extensive crude oil stockpiles including significant imports from Iran could also cushion short-term supply shocks. Reports suggest China may hold up to three months’ worth of reserves, potentially buying time if Hormuz remains blocked.
Meanwhile, diplomatic efforts appear to falter.
Steven Witkoff, US special envoy in recent nuclear negotiations with Iran, says Tehran rejected a US proposal for a 10-year suspension of uranium enrichment, even with Washington offering to finance fuel supplies.
According to Witkoff, Iranian negotiators opened talks by asserting what they called their “inalienable right” to enrich nuclear fuel.
“We, of course, responded, ‘The president feels that we have the inalienable right to stop you,’” he said in an interview.
Witkoff said he was “flummoxed” by Iran’s stance. “We are really in for it now,” he recalled thinking at the time.
He said the US concluded that Iran had “no notion anything other than retaining enrichment for the purpose of weaponising,” an allegation Tehran has consistently denied.
Iran has not immediately responded to Witkoff’s latest remarks, but officials have repeatedly insisted their nuclear programme is for civilian purposes and that they are not seeking a nuclear weapon.
With diplomatic channels strained, embassies under attack, oil routes threatened and markets sliding, the conflict shows little sign of immediate de-escalation, raising fears of a prolonged regional and economic crisis.
