US Airstrikes on Iran Send Shockwaves Across Globe, Raising Geopolitical Risk and Oil Prices

The unprecedented US airstrikes on Iran have left the world on edge, with traders and governments worldwide bracing for potential retaliation from the Islamic Republic. The situation has pushed the Middle East into uncharted territory, raising geopolitical risk in a world economy already facing severe uncertainty over President Donald Trump's trade war.

Oil Prices Soar as Geopolitical Tensions Escalate

The news of the US airstrikes sent shockwaves through global markets, with oil prices rising by almost 6% on Monday morning in Asia. Analysts warn that $100 a barrel is within sight, depending on Iran's further response to the conflict. The US dollar also pushed higher, while stock futures fell and Bitcoin slid below $100,000 for the first time since early May.

Extensive US Operation Targets Nuclear Sites

The extensive US operation, which included 125 aircraft, strikes by Tomahawk missiles launched from a submarine, and the use of 14 Massive Ordnance Penetrator bombs, marked the first direct military action against Iran after decades of hostility. The targets included nuclear sites at Fordow, Natanz, and Isfahan.

Iran Warns of Retaliation, Israel Shows No Sign of Letting Up

At the United Nations on Sunday, Iranian Ambassador Amir Saeid Iravani told an emergency Security Council meeting that Tehran's response would be decided by its armed forces. Foreign Minister Abbas Araghchi earlier said the country reserves all options to respond, while the Islamic Revolutionary Guard Corps signaled US military bases in the region could be targeted.

Trump Vows to Meet Retaliation with Force

President Trump has vowed to meet any retaliation from Iran with force "far greater" than the US strikes on the nuclear sites. He also floated the possibility of regime change in Iran, although US and Israeli officials stressed that isn't their aim.

Global Community Responds to Escalating Conflict

Police in New York, Washington, and Los Angeles increased patrols at religious institutions, diplomatic facilities, and public spaces, citing no immediate credible threats but highlighting the need for vigilance. The Department of Homeland Security warned that the Israel-Iran war has placed the US in a "heightened threat environment" through Sept. 22.

Impact on Global Economy and Energy Prices

The conflict has raised concerns about the impact on global energy prices, with the World Bank, the Organization for Economic Cooperation and Development, and the International Monetary Fund all downgrading their growth forecasts in recent months. The Strait of Hormuz, a major artery for global crude and natural gas, is at risk of being targeted by Iran, which could lead to a spike in energy prices.

Regional Players React to Escalating Conflict

Greece has cautioned its ship owners to think again if they're considering entering the Persian Gulf, while British Airways and Singapore Airlines have canceled flights to the region. Naval forces in the region have warned that ships, especially US-linked vessels, could be at heightened risk.

Conclusion

The unprecedented US airstrikes on Iran have sent shockwaves across the globe, raising geopolitical risk and oil prices. The situation remains uncertain, with both sides showing no signs of backing down. As the world watches, the Middle East is plunged into uncharted territory, with far-reaching consequences for global markets and economies.