US President Donald Trump announces "crushing economic operation" on Iran

US President Donald Trump announced the most severe economic sanctions ever imposed on Iran, according to CBS News. The President stated this unprecedented economic isolation against Iran will be a "crushing operation." Countries that provide financial assistance to Iran will face grave economic repercussions, Trump warned through his social media platform, Truth Social.

No nation should allow its financial institutions, businesses, airports, or government entities to extend any form of support to Iran, the President emphasized. Iran has denied firing the ballistic missiles that targeted the UAE, but the United Arab Emirates announced it is suspending all trade with Tehran in response to the attack.

Meanwhile, the West Texas Intermediate (WTI) oil price remained stable on the day at $85.28. WTI oil, a high-quality crude oil widely traded internationally, is a benchmark for the oil market. Global economic factors like growth, political instability, and OPEC's production decisions significantly influence WTI oil prices. The US Dollar's strength or weakness also impacts WTI oil prices, as Oil is primarily traded in US Dollars.

The weekly oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) also affect WTI oil prices, with a decrease in inventories indicating increased demand and higher prices. OPEC, a group of 12 major oil-producing nations, decides production quotas at twice-yearly meetings, which can significantly impact WTI oil prices.

Despite the indirect talks between the US and Iran, markets are largely ignoring them as they focus on the upcoming Trump-Xi summit. Meanwhile, the Australian dollar is facing selling pressure, and the US Dollar continues to remain strong due to the Federal Reserve's hawkish stance.