Trump Threatens Further Attacks on Iran, Middle East Ceasefire Further Fragile
US President Donald Trump has renewed his threat to attack Iran after accusing Tehran of delaying the tentative peace talks for too long. The statement adds pressure to the already fragile ceasefire that has been in place for the past two months and raises the risk of a broader military escalation between the US and Iran.
Trump said the US had attacked Iran on Tuesday night and would continue with further attacks. "We're going to hit them, hit them very hard," Trump told reporters at the White House on Wednesday. He did not specify which targets would be targeted, but asserted that Washington would continue to pressure Tehran until a deal is reached.
The statement immediately weighed on market sentiment. The S&P 500 extended its decline by more than 1%, while oil prices rose more than 2%, with Brent nearing US$94 per barrel. Markets are concerned that the US-Iran escalation could prolong disruptions in the Strait of Hormuz, a vital waterway for global energy shipments.
However, Trump also sought to allay market concerns by saying the US was helping oil tankers pass through the Strait of Hormuz. He claimed the move helped keep oil prices relatively manageable. However, for investors, the underlying risk remains: the longer the conflict drags on, the greater the pressure on energy supplies, inflation, and global interest rate expectations.
The latest escalation came after Trump ordered retaliatory strikes against Iran for the alleged downing of a US Apache helicopter near the Strait of Hormuz. Tehran has not confirmed the claim and said it is reviewing the continuation of negotiations following the US attack. Iran's Foreign Ministry stated that the diplomatic process requires minimal space to operate, while the Iranian military will respond if necessary.
The US military said the latest operation targeted Iranian air defense systems, ground control stations, and radars near the Strait of Hormuz. Meanwhile, Iran's Revolutionary Guards reportedly launched missiles at several American targets, including facilities housing F-35 jets and a US military command center in Jordan. Iran also claimed to have sent drones toward a major US Navy base in Bahrain and attacked Ali Al Salem Air Base in Kuwait.
Kuwait said it had intercepted the projectiles on Wednesday morning, while Jordan said it had intercepted five Iranian missiles. There were no immediate reports of casualties from the attacks. Iran has called its actions a matter of self-defense and warned regional countries not to allow their territory to be used by the US or Israel to attack Iran.
Diplomatically, negotiations are ongoing through intermediaries, including Pakistan and Qatar. However, major obstacles remain. Iran is demanding the release of more than US$10 billion in funds frozen abroad, while it is unclear whether Tehran is willing to release or transfer its stockpile of highly enriched uranium to other countries.
The conflict is further complicated by the involvement of Israel and Lebanon. Iran previously fired missiles at Israel after Israel attacked Hezbollah militias and infrastructure in Beirut. Israel then retaliated, despite Trump reportedly asking Prime Minister Benjamin Netanyahu to refrain from further attacks. Iran and Israel agreed to halt the attacks on Monday, but stability remains fragile.
For global markets, the crux of the issue is not just the military risks, but the impact on energy and inflation. If the conflict disrupts oil flows through Hormuz again, energy prices could remain high, adding to inflationary pressures. This could make it more difficult for central banks to ease policy, while also containing volatility in stocks, bonds, commodities, and currencies. (Arl)
Source: Newsmaker.id
