Renewed Clashes After a Month of Silence: Why the US-Iran Conflict Resumed and How the Market Reacted?

Original | Odaily Planet Daily (@OdailyChina)

Author | jk

In the ongoing US-Iran conflict that has lasted nearly six months, a military operation on August 30 broke a month of relative calm. This war, which began in February, had entered a hiatus due to diplomatic mediation and economic sanctions strategies. However, this weekend, both sides clashed again, with Brent crude oil surging past $90, and the three major US stock indices collectively declined, causing the market to tighten its nerves once more.

Why the Resurgence of Conflict

Immediate Trigger: Mine-Laying Attempts in the Strait of Hormuz

On August 30 (Sunday), the US Central Command confirmed that US forces struck rocket launchers deployed by Iran on Larak Island. Central Command spokesman Tim Hawkins stated that the Iranian Revolutionary Guard Corps (IRGC) was preparing to lay mines in the Strait of Hormuz at the time. This was the first public acknowledgment by the US of military action against Iranian targets since the end of July.

Iran quickly responded: Iranian state media reported that Tehran had launched missiles at US bases in Jordan in retaliation, claiming that the two bases suffered "heavy damage." The IRGC later claimed that a tanker attempting to pass through the southern edge of the strait was hit by two mines.

Background: From "Military Confrontation" to "Economic Strangulation"

This clash is noteworthy because it breaks Washington's previous strategic shift. Since the last round of missile exchanges at the end of July, the US had been signaling that it would shift its focus from direct military strikes to economic sanctions and blockades against Iran—pressuring Tehran to return to the negotiating table through tightened sanctions and maintaining naval blockades, rather than launching new airstrikes. Trump had previously stated that the US would "just watch Iran sink into inflation and poverty," without rushing to escalate the conflict.

Meanwhile, Iran and Oman had reached an agreement on a framework for sharing tolls in the Strait of Hormuz, leading the market to interpret the situation as an economic stalemate, which was also a reason for Brent crude oil to drop over 5% in the past week.

Trump's "AI Video" Incident

On August 31, Trump posted a seemingly AI-generated video on Truth Social, claiming that Iran's core oil export hub Kharg Island (which accounts for about 90% of Iran's oil exports) had been "blown to smithereens." However, executives from the Iranian National Oil Company publicly called this claim "ridiculous," stating that operations on Kharg Island were proceeding as usual; the US Central Command also did not confirm any strikes on the island, only acknowledging a "limited, precise strike" against the mine-laying operation on Larak Island.

Source: Truth Social

Although this incident did not lead to a new substantial military escalation, it further stirred market expectations regarding the direction of the situation. Trump had previously threatened to "take over" Kharg Island and Iran's oil and gas market, comparing it to the US's actions in Venezuela.

The framework negotiations originally scheduled for early September are still progressing, but Washington and Tehran remain publicly opposed on the core issue of "who holds the weapons." In other words, even though both sides still retain channels for dialogue, the conflict has not truly cooled down. The clashes on August 30-31 appear to be another friction under this fragile stalemate, and it remains unclear whether Iran will retaliate further or announce that this round of responses has ended.

Market Impact

Oil Prices: Surging Again, Breaking Past $90

• Brent crude oil closed at approximately $90.69 per barrel on August 31, rising 2.93% in a single day; WTI crude also rose, nearing $86 per barrel.
• This increase reversed the previous decline caused by the perception that the "Iran situation was seen as economic sanctions rather than a supply threat"—Brent had previously dropped to around $89.3 in the past week, with a cumulative weekly decline of over 5%.
• Looking at a longer period, Brent crude is currently up about 33% compared to the same time last year, with an increase of about 8% over the past month. Oil production in the Gulf region remains significantly below pre-war levels (according to Goldman Sachs, current Persian Gulf exports are about 15-16 million barrels per day, compared to 22-24 million barrels per day before the war).

Brent crude oil suddenly rises. Source: Hyperliquid

US Stocks: Energy Stocks Strengthen, Overall Market Impact Limited

Closing on August 31 (Monday):

• The S&P 500 index fell 0.33%, closing at 7686.14 points.
• The Nasdaq Composite index fell 0.12%, closing at 26370.89 points.
• The Dow Jones Industrial Average fell 374.09 points (-0.7%), closing at 53185.90 points, primarily dragged down by Goldman Sachs and Alphabet.

It is noteworthy that despite recording declines on Monday, the three major indices still posted gains for the entire month of August: the S&P 500 rose 2.6% for the month, the Nasdaq rose 3.9%, and the Dow rose 1.3% (marking the fifth consecutive month of increases).

Sector Performance: Energy stocks collectively rose due to the increase in oil prices, with Halliburton rising over 2.5% in pre-market trading, Chevron rising 2%, Valero and Occidental both rising 2%, and Exxon Mobil rising over 1.5%.

Cryptocurrency-related stocks mostly rose, with Bitcoin maintaining above $78,000, and Coinbase, Strategy, CleanSpark, and others rising between 1% and 2%.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.