US President Donald Trump said on Thursday (September 10) that he had "no regrets" about starting the conflict with Iran, adding, "If I had to do it all over again, I would do the exact same thing." This statement comes as markets prepare for a potentially protracted conflict. Meanwhile, Washington continues its efforts to isolate Iran from its economic network, with Treasury Secretary Bessant announcing sanctions against "a major bank" next Monday. Trump has explicitly ruled out a short-term end to the conflict ahead of the midterm elections, and the US's economic pressure tools are expanding from oil transportation to financial sanctions.

Trump stated: No regrets, oil prices will fall after the conflict ends.

In a media interview, Trump stated that he would make the same decision even if the conflict with Iran impacted the midterm elections. When asked if the Republican Party would be easily on its way to victory in the midterms without the conflict with Iran, Trump responded, "Suppose we're easily ahead and Iran suddenly gets nuclear weapons, they'll use them." He added that if Iran possessed nuclear weapons, it would "destroy" Israel and the Middle East and begin attacking American cities. Trump had previously stated that the conflict would end immediately after the midterm elections, and oil prices would subsequently fall. However, according to media reports, senior White House advisors have discussed with Trump the possibility that the conflict could continue beyond his current term. This discrepancy between this information and Trump's public statements is the core basis for the market's pricing in a prolonged conflict. In another interview, Trump denied Iranian claims that it attacked multiple US warplanes at a US military base in Jordan, saying, "No damage, nothing."

Economic pressure: Sanctioning major banks and cutting off Iran's funding sources

Washington continues its efforts to isolate Iran from its economic network. Treasury Secretary Bessant announced sanctions against “a major bank” to be announced next Monday. “We will take action on Monday because we want to commemorate the citizens who died in the 9/11 attacks,” Bessant said. “Please pay attention to Monday’s announcements.” Bessant also revealed that the US government has sanctioned and closed the Dubai branch of Egypt’s second-largest bank, claiming the bank provided $1.8 billion to Iran. Furthermore, “the largest Turkish bank” has also been sanctioned for providing funds to Iran, but Bessant did not specify which bank. This series of sanctions indicates that the US is expanding its pressure tools from military strikes against Iranian oil tankers to secondary sanctions against third-country financial institutions, attempting to further tighten its encirclement of Iran at the financial level.

The expectation of a prolonged US-Iran conflict and escalating sanctions together support the risk premium.

Trump's "no regrets" statement and the new round of US financial sanctions have provided dual support for oil prices. First, Trump explicitly linked the end of the conflict to the midterm elections, while internal White House discussions suggested the conflict might extend beyond his term, directly shattering market expectations of a "short-term conflict." The longer the conflict lasts, the more significant the cumulative effect of the disruption to the Strait of Hormuz, and the more difficult it will be to repair the structural gaps in the global oil supply chain in the short term. Second, Bessant's announcement of sanctions against major banks signifies that US pressure tactics have expanded from military strikes against oil tankers to cutting off Iran's financial lifeline. Such secondary sanctions could force more third-country financial institutions to reduce their business dealings with Iran, further compressing Iranian oil export channels—although Iranian oil exports were already restricted by sanctions, the tightening of financial controls will increase their circumvention costs, marginally reducing actual circulation. Under the combined effect of these two factors, Brent crude oil has broken through $100 per barrel this week, reaching $109 on Friday, a new high since May 22nd, as the market prices in a combination of "protracted conflict + escalating sanctions." If the details of the sanctions are finalized next Monday and their impact exceeds expectations, oil prices may further test the upper resistance level; conversely, if the sanctions are seen by the market as a symbolic move, the risk premium may temporarily decline.

Summarize

On Thursday, Trump stated unequivocally that he had "no regrets" about initiating the conflict with Iran and reiterated that the conflict would end after the midterm elections and oil prices would fall. However, media reports indicate that the White House is already discussing the possibility of the conflict continuing beyond his term. Meanwhile, US Treasury Secretary Bessant announced sanctions against a major bank next Monday and has already taken action against related financial institutions in Egypt and Turkey, signifying that US economic pressure on Iran is expanding from oil transportation to financial sanctions. For the market, Trump's statements mean that geopolitical risk premiums are unlikely to subside in the short term, while escalating sanctions could further push up oil prices and risk aversion. Under the dual influence of the expectation of a prolonged conflict and the midterm election window, energy prices and the pricing of safe-haven assets will continue to revolve around policy signals from Washington. (Brent crude oil futures daily chart, source: EasyTrade) At 12:20 Beijing time, Brent crude oil futures were trading at $107.88 per barrel.