The fragile ceasefire between the US and Iran appears to be hanging by a thread. After fresh fighting erupted and Iranian attacks targeted commercial ships in the Strait of Hormuz, US President Donald Trump declared the agreement "over" and warned that American bombings would "get much worse" if Tehran failed to back down.

The latest exchange has seen US strikes on Iranian military targets met with retaliatory attacks on American military facilities in Bahrain and Kuwait, raising fears of a wider regional conflict.

Are the two sides heading back to open conflict, or is this the latest round of brinkmanship before diplomacy resumes?

On The Big Story, Hongbin Jeong and Dr James Dorsey, Adjunct Senior Fellow at Nanyang Technological University's S Rajaratnam School of International Studies, unpack what the latest escalation means for the Middle East, the global economy, and whether there's still any path back to peace.