Heightened US-Iran tensions following July 2026 escalations in the Strait of Hormuz, including Iranian attacks on commercial vessels and subsequent US strikes on Iranian assets, represent the primary driver shaping trader sentiment on further diplomat expulsions. These events broke a June memorandum of understanding and prompted renewed military exchanges, raising the prospect of reciprocal diplomatic measures by the US, European states, or regional actors over espionage, proxy support for Hezbollah, or national security threats. Prior expulsions, such as the US actions against Iranian UN mission personnel in late 2025 and Lebanon's March 2026 persona non grata declaration, illustrate how bilateral frictions often lead to such steps. No major new expulsions have occurred in the past 30 days, but scheduled diplomatic engagements or additional military incidents could shift probabilities.