Bad news for oil markets and the fragile Middle East peace push: a new peace deal is unraveling as fighting flares between Israel and Lebanon.

• Iran has shut the Strait of Hormuz again after Israel bombed Lebanon and pushed tanks deeper in, despite a fresh ceasefire.
• US Central Command says the strait isn't fully closed, but far fewer ships are getting through than normal, and many are sailing with radar off to avoid detection.
• A memorandum of understanding for peace still stands, and Iran is now heading to talks in Switzerland with US envoys Witkoff and Kushner.
• The conflict in Lebanon threatens to blow up the whole peace process, which was meant to wind down the Iran war and lock in no Iranian nuclear program.

Outlook: If the strait stays shut, oil shipping tightens and prices rise; the Switzerland talks are the near-term test of whether the peace deal survives.