United States President Donald Trump has threatened a crushing financial campaign against Iran, which he has referred to as “economic D-Day”, as the war on Tehran continues to drag on. But on Thursday, the first casualty appeared to be US markets. As US crude oil nudged up from its Wednesday closing price of $86.20 per barrel to $86.70, the US stock market made its worst losses in three weeks.
Meanwhile, the US announced its total debt has surpassed a record $40 trillion this week. Here’s what Trump has threatened and what the result has been so far. In a post on Truth Social on Wednesday, Trump said Iran had “failed to take” the opportunity to make a deal, and would face “economic warfare and isolation on an unprecedented scale”.
He also threatened new sanctions against any country that does business with Iran. On Thursday, Treasury Secretary Scott Bessent told CNBC again that this new “economic warfare” could include more secondary sanctions on other nations and companies that conduct business with Iran. The latest Trump administration rhetoric comes as the critical Strait of Hormuz in the Gulf remains closed to shipping, upending global energy and financial markets.
Before the war, some 20 percent of global oil and natural gas supplies were shipped through this waterway. The war is increasingly becoming unpopular within the US as the costs of petrol and other living expenses rise. On Wednesday, Tehran dismissed Trump’s threats, with Foreign Minister Abbas Araghchi calling the so-called “economic D-Day” a “diversion from America’s own crisis”.
The US and Israel’s war on Iran has paralysed the Strait of Hormuz, the only route to the open ocean through which Gulf oil producers can ship their exports. Before the war, some 130 ships passed through the strait each day. Now barely a handful get through.
This has hugely unsettled the global energy and financial markets. Following Trump’s economic threats against Iran on Wednesday, global crude oil prices rose to nearly a one-month high on Thursday morning with Brent crude – the global benchmark – topping $93 a barrel. On Friday morning, the price of Brent remained at $93.28 a barrel.
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