• Iran's Revolutionary Guard Corps conducts live-fire exercises in the critical oil chokepoint, raising fears of accidental clashes amid U.S. naval presence.
  • The drills coincide with indirect U.S.-Iran nuclear negotiations in Geneva, with Iran rejecting expanded talks beyond nuclear issues.
  • Global oil markets face volatility risks, as the strait handles 21% of seaborne crude, though no closure has been confirmed despite persistent threats.

Iran's Revolutionary Guard Corps (IRGC) launched military exercises named "Smart Control of the Strait of Hormuz" on February 16, 2026, involving live-fire drills and demonstrations of missile and drone capabilities from Abu Musa Island. The maneuvers, supervised by IRGC Commander Maj. Gen. Mohammad Pakpour, come hours before indirect U.S.-Iran nuclear talks in Geneva on February 17, mediated by Oman, following initial rounds in Muscat on February 6. According to people familiar with the matter, the timing is seen as a show of force, though no full or partial closure of the strait has been confirmed, despite headlines suggesting otherwise.

Efforts to restart nuclear diplomacy have hit a snag, with Iran insisting talks focus solely on nuclear issues and rejecting U.S. attempts to expand discussions to missiles or proxies. "We are ready for an instructive battle against any threats," an Iranian official said, speaking on condition of anonymity. U.S. officials, including President Trump, have expressed optimism for deals but remain skeptical of Iran's nuclear ambitions, according to sources briefed on the negotiations. Attempts to reach IRGC spokespeople for further comment were unsuccessful.

The strait handles 21% of global seaborne oil, about 21 million barrels daily, and 20% of liquefied natural gas, making any disruption a potential trigger for price spikes and global economic damage. Drills coincide with a U.S. naval buildup, including the USS Abraham Lincoln and USS Gerald R. Ford carriers, heightening risks of miscalculation in the confined Persian Gulf waters. IRGC navy has warned that all foreign vessels are under surveillance, with prior U.S. naval missions running 24/7. This follows June 2025's Israel-Iran 12-day war, which included brief U.S. involvement striking nuclear sites, and resumes talks after stalled diplomacy.

Short-term risks include accidental naval clashes, as the U.S. deploys a second carrier from Caribbean operations. Long-term, failure in talks could prompt U.S. strikes or a strait blockade via missiles and drones, per Iranian warnings, though experts note self-harm limits feasibility. Iran has repeatedly threatened Hormuz closure during U.S. tensions but never enacted it, risking its own oil export revenue. Global shipping and energy stakeholders face elevated uncertainties, with Indian intercepts of sanctioned Iranian-linked tankers already straining regional trade. In Geneva, Iran's Foreign Minister Abbas Araghchi is pushing for sanctions relief alongside IAEA head Rafael Grossi, but skepticism persists on nuclear curbs.

Correction: An earlier version of this article incorrectly stated a partial closure of the strait; reports confirm no such closure has occurred.