Oil falls ahead of US plan for economic war on Iran | New Straits Times
Oil prices slipped on Monday, giving back a portion of last week’s strong gains, as investors awaited details of a US plan to unleash sweeping economic pressure on Iran aimed at ending the Middle East conflict and reopening the vital Strait of Hormuz.
Attention centered on the US Treasury, with the secretary scheduled to outline fresh measures later in the day. The campaign has been framed by officials as an unprecedented financial offensive designed to squeeze Tehran’s access to global funding and energy revenues.
Both major crude benchmarks were down around two percent in early trade. Even so, Brent crude stayed above US$92 a barrel after surging more than seven percent last week on concerns over supply disruptions and escalating regional tensions.
Market strategists noted a modest sense of relief that Washington appears to be emphasizing punitive economic tools rather than military action, though confidence remains low that a pathway to a durable peace or a swift normalization of regional oil flows will emerge soon. Analysts cautioned that without tangible progress on reopening shipping lanes, price volatility is likely to persist.
Stocks wobble as tech jitters grow
European equities were mixed, with London edging higher while Frankfurt and Paris hovered near the flatline. In Asia, technology shares came under renewed pressure ahead of a closely watched earnings report from Nvidia, a bellwether for the global rollout of artificial intelligence.
Investors are keen to see whether AI-driven demand continues to spread across industries and how the company is navigating intensifying competition, including from Chinese rivals. The results are expected to offer clues on the pace of investment in AI infrastructure and the sector’s near-term outlook.
South Korea’s Kospi fell more than three percent, dragged lower by a sharp decline in Samsung Electronics, while Tokyo and Shanghai also closed in the red. Hong Kong slipped nearly two percent despite news that fast-fashion group Shein plans to debut in the city’s market on September 1, in a long-anticipated listing that could value the retailer at close to US$27 billion.
Chinese tech heavyweight Alibaba also kept the spotlight on the sector after unveiling plans to issue about US$10.2 billion in new Hong Kong shares to accelerate its AI ambitions and related investments.
Jackson Hole, bond markets in focus
Traders are also eyeing the annual Jackson Hole gathering of central bankers, economists, and finance officials in the United States, hoping for clearer signals on the trajectory of US monetary policy. The meeting follows the US Treasury’s move to step up buybacks of its own bonds in an effort to ease borrowing costs after the 30-year yield climbed to levels last seen in 2007, just before the global financial crisis.
Government bond yields have risen across several Western economies amid persistent inflation worries and concerns over rising debt loads. In the United States, federal debt recently surpassed US$40 trillion, reinforcing the debate over fiscal sustainability and long-term interest-rate dynamics.
Canadian dollar weakens as trade tensions simmer
On currency markets, the Canadian dollar fell about 0.5 percent against the US dollar, extending a month-long decline after Ottawa pledged to retaliate against new US tariffs. Analysts at ING noted that a smaller, more open economy like Canada’s is especially vulnerable to escalating trade frictions. They added that the prime minister has signaled a willingness to consider additional fiscal support for industries most at risk from the dispute.
With oil markets delicately balanced between geopolitical shocks and policy responses, and equities swayed by AI expectations and rising yields, investors are braced for two key catalysts this week: Washington’s unveiling of its sanctions playbook and Nvidia’s earnings report. Until there is concrete progress on de-escalation in the Middle East or a clearer path for interest rates, volatility looks set to remain a defining feature across global assets.
