On Friday, US forces launched strikes on over 90 military targets located on Kharg Island, a Persian Gulf outcrop responsible for handling approximately 90% of Iran's crude oil exports. Notably, the US deliberately spared oil infrastructure during these attacks. President Trump issued a direct warning, stating that if the Strait is not opened, the export terminals would be targeted next [1]. In response, Iran intensified its military actions overnight, deploying drone and missile attacks across the Gulf region. These attacks resulted in a fire at the UAE's Fujairah bunkering hub, a strike on Kuwait's Al-Jaber Air Base, and intercepted barrages in Qatar and Saudi Arabia. The IRGC officially declared US interests in the UAE as legitimate targets [1]. When questioned about the possibility of a deal on Sunday morning, President Trump responded, 'The terms aren't good enough yet,' indicating ongoing tensions and unresolved negotiations [1].
The upcoming week is set to be pivotal, with six major central bank decisions scheduled: the Reserve Bank of Australia (RBA) on Tuesday, Bank of Canada (BOC) and Federal Open Market Committee (FOMC) on Wednesday, and Bank of Japan (BoJ), Swiss National Bank (SNB), Bank of England (BoE), and European Central Bank (ECB) on Thursday. These policy decisions will occur against the backdrop of heightened geopolitical risk, particularly as the world's most strategically sensitive oil export terminal has just been targeted [1].
Market implications are significant, as every central bank policy signal this week will be shaped by the ongoing conflict and the threat to global oil supply routes. The explicit targeting of Kharg Island and the potential for further escalation pose risks to energy markets and broader financial stability [1].
CONCLUSION
The US-Iran conflict has escalated dramatically, with Kharg Island—the hub for most of Iran's crude exports—now under direct threat. This geopolitical crisis is expected to heavily influence global markets and central bank decisions in the coming week. Investors should brace for heightened volatility and uncertainty, especially in energy and financial sectors.