US President Donald Trump has vowed to launch what he described as the “most crushing” financial operation yet against Iran, as Washington prepares new economic sanctions targeting the country’s trade partners.
Iran, in response, has threatened to halt all oil exports from the Gulf if what it called an economic war continues.
The escalation comes despite the absence of direct military strikes between the warring sides for several weeks. However, the US, Israel and Iran have yet to hold meaningful negotiations aimed at ending the six-month-old conflict.
Thousands of people have reportedly been killed since the conflict began on February 28, with Iran and Lebanon recording the highest number of casualties. The fighting has severely weakened much of Iran’s conventional military capacity and caused significant economic damage, while Iranian Supreme Leader Ayatollah Ali Khamenei was also killed.
Oil Prices Fall as Markets Await US Sanctions
Oil prices fell on Monday as investors awaited details of the US plan to further isolate Iran’s economy. Brent crude fell 1.8 per cent to $92.68 per barrel, while West Texas Intermediate dropped 1.9 per cent to $85.39.
Both major crude contracts were earlier down about 2.3 per cent, with Brent hovering around $92.
US Treasury Secretary Scott Bessent is expected to provide further details on Monday about the new measures. Washington had already urged its allies and China to support the campaign against Iran.
Vice-President JD Vance described the strategy as a “delicate dance”, warning that Iran could respond by applying economic pressure on the United States.
Bessent, when asked whether Washington would pressure China, said some discussions were better handled privately but urged Beijing to “get with the programme.”
Asian Markets React to Wider Economic Uncertainty
Asian markets were mostly lower on Monday. South Korea’s Kospi fell 1.4 per cent after Samsung Electronics announced an $80 billion share buyback following weeks of volatile trading.
Samsung and rival SK hynix had reached highs in June amid optimism surrounding artificial intelligence, but their shares have since declined amid investor concerns and a broader technology-sector sell-off.
Investors are also watching Nvidia’s upcoming earnings report, with the company remaining a key indicator of whether the global AI investment boom can continue.
“The spending machine is still running, but the bill is getting heavier,” said Stephen Innes of SPI Asset Management.
He said Nvidia would need to demonstrate that the huge investment in AI technology could continue generating returns.
Meanwhile, Chinese technology giant Alibaba announced plans to raise $10.2 billion through a new share issue in Hong Kong to finance its global AI ambitions.
The company, known for its open-source Qwen AI models, has invested tens of billions of dollars in the technology as shareholders await evidence of how those investments will generate revenue.
Markets Across Asia
Tokyo, Shanghai, Taipei and Wellington recorded losses, while Sydney, Jakarta and Bangkok gained. Manila and Kuala Lumpur were largely unchanged.
Hong Kong’s market fell more than 2 per cent despite fast-fashion company Shein announcing that its long-awaited market debut would take place in the city on September 1, with the company expected to be valued at nearly $27 billion.
Investors Also Watch Jackson Hole
Markets are also looking ahead to the annual Jackson Hole gathering of central bankers, economists and finance officials in the United States, where investors hope to gain more clarity on US monetary policy.
The meeting comes after the US Treasury bought its own bonds last week in an effort to lower borrowing costs after the 30-year yield climbed to levels last seen in 2007.
Yields have risen amid inflation concerns, while US federal debt has now surpassed $40 trillion.
Key Market Figures
At around 0215 GMT, the figures were:
- Nikkei 225: Down 0.3% at 65,799.25
- Hang Seng: Down 2.1% at 25,455.95
- Shanghai Composite: Down 0.5% at 3,887.81
- FTSE 100: Up 0.6% at 10,816.56
- Dollar/Yen: 158.82 yen
- Euro/Dollar: $1.1684
- Pound/Dollar: $1.3651
- Euro/Pound: 85.59 pence
- WTI Crude: Down 1.9% at $85.39 per barrel
- Brent Crude: Down 1.8% at $92.68 per barrel
Source: AFP.
