Oil falls as Trump pledges economic war on Iran

Oil prices declined on Monday as investors anticipated the United States' strategy to isolate Iran's economy, which President Donald Trump described as the most severe financial operation against Tehran. Asian stocks also experienced a general downturn in early trading, with South Korea's tech-heavy Kospi index falling by 1.4%. Tech giants Samsung Electronics and SK hynix, which saw their shares rise to a peak of US$80 billion for Samsung in June, have since faced a decline due to market uncertainties and a broader tech decline.

The week is crucial for artificial intelligence, as investors await earnings reports from Nvidia, the world's most valuable company and a key indicator of the sector's performance. The company must demonstrate that its unprecedented investment in AI can still yield returns. Alibaba, a Chinese tech giant, is also closely monitoring the sector after announcing on Sunday plans to issue US$10.2 billion in new shares in Hong Kong to fuel its global AI initiatives.

Meanwhile, US Treasury Secretary Scott Bessent will provide further details on a new effort to impose economic pressure on Iran in a press conference on Monday. The United States has urged allies and China to join its campaign, which follows the contentious war in the Middle East entering its sixth month. Vice President Kamala Harris acknowledged the plan's delicate nature, as Iran could attempt to apply economic pressure on the U.S. Bessent suggested that discussions with China should remain private but called on Beijing to align with the initiative.

Both major crude contracts saw a 2.3% decline, with Brent crude settling at US$92 per barrel. Traders will also be monitoring the upcoming annual meeting of central bankers, economists, and finance chiefs in Jackson Hole, Wyoming, hoping for insights into US monetary policy. The gathering follows the Treasury's recent purchase of its own bonds to help lower borrowing costs, which surged to levels last seen in 2007, just prior to the global financial crisis. The federal debt has surpassed US$40 trillion due to inflation concerns and rising yields.