It's the middle of the night, but things are moving fast. As the conflict between the U.S., Israel, and Iran enters its twelfth day, a flurry of overnight developments is reshaping the battlefield and the markets. Here's what you need to know.

First, the military action. On Tuesday, President Donald Trump warned Iran not to place naval mines in the Strait of Hormuz, threatening severe military retaliation. Soon after, the U.S. military said it destroyed 16 Iranian vessels suspected of laying those mines near the critical waterway.

Iran responded. The Islamic Revolutionary Guard Corps (IRGC) said it launched drones toward U.S. military bases in five countries: Bahrain, Saudi Arabia, the UAE, Kuwait, and Erbil in Iraq. It's a broad, symbolic strike meant to show reach, even if the actual damage is unclear.

Meanwhile, out at sea, things got real for a cargo ship. The United Kingdom Maritime Trade Operations reported that a vessel was hit by an unknown projectile in the Strait of Hormuz. The attack sparked a fire on board and forced the crew to evacuate. It's the kind of incident that makes shipping companies and insurers very, very nervous.

All this is happening while diplomats are trying, and largely failing, to talk. Qatar's minister of state for foreign affairs, Mohammed bin Abdulaziz al-Khulaifi, urged de-escalation and called on Iran and the United States to return to negotiations. He warned that Iran's attacks on regional neighbors "benefit no one."

On another front, talks are completely stalled. Israel has rejected diplomatic efforts by Lebanon to halt its escalating offensive against Hezbollah. Israel's position is that negotiations must occur "under fire." Beirut, for its part, is demanding a ceasefire before any discussions, while Israel wants talks to focus only on the possibility of one. It's a classic diplomatic standoff with live ammunition.

And then there's the oil market, which is watching all of this and sweating. The International Energy Agency (IEA) has reportedly proposed its largest-ever emergency release of oil reserves to try to curb soaring crude prices. This potential release would exceed the 182 million barrels member countries unleashed after Russia's full-scale invasion of Ukraine. The proposal was discussed at an emergency meeting of the agency's 32 member nations, with a decision expected Wednesday. It's a clear signal that policymakers are worried about energy prices spiraling out of control because of the conflict.

So, to recap: attacks on bases, attacks on ships, a breakdown in truce talks, and the potential for a historic intervention in the oil market—all before sunrise. The conflict is expanding geographically and economically, and everyone is trying to figure out what happens next.