President Donald Trump announced a massive military escalation against Iran within the next two to three weeks. The move is aimed at completely disabling Iran's nuclear capabilities and electrical infrastructure if Tehran continues to reject the terms of the peace deal set by Washington.
Financial markets reacted with panic immediately after the speech. WTI crude oil prices jumped sharply by 11.6% to $111.70 a barrel, while S&P 500 futures plunged 1.45%. Investors feared that simultaneous attacks on Iranian power plants would further disrupt global energy supplies.
Trump claimed that US military objectives were almost achieved after successfully destroying most of Iran's naval and missile forces. Although he said negotiations were ongoing, Iran denied through official media that there were any direct talks with the United States.
The Strait of Hormuz issue remained a major sticking point. Trump insisted that the US would not be responsible for reopening the maritime route that supplies 20% of the world's oil. Instead, he urged countries in South and East Asia that rely on the route to take their own actions to ensure the safety of their shipping.
Economic analysts have warned that while Trump plans to end the war in a matter of weeks, the economic impact will be long-lasting. The continued closure of the Strait of Hormuz until the end of April is expected to continue to drive up oil prices and increase the cost to the global economy every day.
