Iran Update Special Report, August 4, 2026: US officials and Iranian negotiators continue to present competing interpretations of the emerging arrangement on the Strait of Hormuz. The Iranians’ inconsistent messaging in these negotiations is likely a product of the competing Iranian regime factions’ approaches to control over the strait and negotiations with the United States writ large. More Key Takeaways: Iran’s broader military establishment, which appears to currently dominate regime decision-making, maintains its position against significant concessions over the Strait of Hormuz because they assess that Iran can outlast the United States in the war. Iranian President Masoud Pezeshkian and other pro-negotiations officials continue to advocate for diplomacy to settle the conflict and prioritize Iran’s economic challenges, while facing mounting pressure from the other regime factions that oppose compromise and seek more maximalist regional objectives. This intra-regime divide will likely impede Iran’s ability to concretely come to an arrangement over the strait. Supreme Leader Mojtaba Khamenei appears to be downplaying these intra-regime divisions to portray a unified front against the United States, however. The Supreme Leader’s Public Relations Office on August 4 rejected reports claiming to describe Mojtaba’s reaction to a letter from President Masoud Pezeshkian. The Houthi military spokesperson Yahya Sarea claimed that a Houthi drone struck a “sensitive target” at Najran Regional Airport, southern Saudi Arabia, on August 4. An informed regional source told Agence France-Presse (AFP) on August 4 that the Houthis struck the Najran Regional Airport’s main radar installation, which has affected airport operations. The Houthis likely sank an Indian-flagged cargo vessel with a one-way naval attack drone near the Bab al Mandeb Strait. Indian Minister of Ports, Shipping, and Waterways Sarbananda Sonowal announced on August 4 that an unspecified projectile struck and sank the Indian-flagged MSV FAIZE NOORE OLIYA “near Yemeni waters.” (1/2)

MORE: At least seven vessels have changed course to avoid transiting through the Bab al Mandeb Strait in light of the Houthi blockade on Saudi ports. The Houthis imposed the blockade against Saudi Arabia on July 20. Six commercial vessels altered their course away from Saudi ports on July 22, according to ship-tracking data cited by Reuters. Another oil tanker that was bound for Yanbu — Saudi Arabia’s main oil export terminal on the Red Sea — turned away from the Bab al Mandeb Strait while in the Gulf of Aden on July 22. The European Union Naval Force warned commercial vessels with links to the United States, Israel, and Saudi Arabia on July 22 against sailing in the Red Sea and Gulf of Aden. Commercial ship traffic through the Bab al Mandeb Strait continued on July 22 despite the Houthis’ threats against commercial vessels, however. Commercially available ship tracking data from July 22 shows that 30 commercial vessels have transited through the Bab al Mandab Strait since ISW-CTP’s last data cutoff on July 21. This is a notable decrease from the 64 commercial vessels that transited the strait between 2:00 PM ET on July 20 and 2:00 PM ET on July 21, however. At least one oil tanker transporting crude oil from Yanbu, the Xin Long Yang, initially changed course on July 21 to avoid crossing the Bab al Mandeb Strait but has begun to reapproach the strait on July 22. Houthi officials have emphasized that the Houthis will maintain their blockade on Saudi ports until Saudi Arabia lifts its blockade on Yemeni ports and airports. ISW-CTP will provide further analysis about the Houthi blockade against Saudi Arabia in its July 23 Iran Update.

NEW: Japan is developing a centralized intelligence agency for the first time since the Second World War, with advice from its allies and partners. The agency will help counter PRC and Russian espionage in Japan and enhance Japan’s contributions to a US-aligned coalition in the Indo-Pacific. (1/2) Other Key Takeaways: PRC academics and state media promulgated a narrative that the Philippines’ northern Batanes Islands belong to the PRC. The PRC may be setting information conditions to expand coercive patrols around the Batanes to strengthen PRC access and control in the Luzon Strait. PRC authorities are likely detaining and questioning Taiwanese nationals who travel to the PRC to recruit collaborators and intimidate pro-independence voices.

MORE 🧵(1/2): Ukrainian strikes against Russian seaborne gasoline transports over the past week represent a new phase in Ukraine’s efforts to isolate occupied Crimea from the Russian logistics network and to disrupt Russian seaborne shipping routes, especially for petroleum products and grain. Ukrainian forces began intensifying strikes against vessels in the Sea of Azov on July 6 as part of efforts to prevent Russia’s ability to adapt to Ukraine’s strikes against land-based logistics between Russia and occupied Crimea that have caused severe gasoline shortages.