As the war in the Middle East entered its fourth week, Iran has widened its warnings to target buyers of U.S. Treasury bonds, the latest salvo in an intensifying exchange of threats, as the Trump administration’s 48-hour ultimatum neared expiry.
In a social media post on Sunday, Iran’s Parliament speaker Mohammad Bagher Ghalibaf said that U.S.-linked financial institutions holding American government bonds would be targeted alongside military bases.
“U.S. treasury bonds are soaked in Iranians’ blood. Purchase them, and you purchase a strike on your HQ and assets,” Ghalibaf said. “Alongside military bases, those financial entities that finance the U.S. military budget are legitimate targets,” he added in the post.
The escalating warning came after U.S. President Donald Trump issued a 48-hour ultimatum to Tehran on Saturday to reopen the Strait of Hormuz — a key artery for global energy shipping — or face strikes on its power plants. The deadline is set to expire on Monday evening in Washington.
Israeli Prime Minister Benjamin Netanyahu vowed to back the U.S. threat: “Whatever we do, we do together, and as far as possible, in confidence.”
Speaking at the site of an Iranian missile attack in the southern city of Arad on Sunday, Netanyahu called on world leaders to join the war efforts, including the European nations. “They have the capacity to reach deep into Europe … they are putting everyone in their sights.”
Iran has pushed back, threatening to completely shut the waterway and attack energy infrastructure and desalination facilities in the Gulf if the U.S. follows through on its ultimatum.
Ghalibaf warned on Sunday that any U.S. or Israeli strike on Iran’s power plants would “immediately” trigger retaliatory attacks on energy and oil infrastructure across the region, causing “irreversible” damage.
“Critical infrastructure and energy and oil infrastructure throughout the region will be considered legitimate targets and irreversibly destroyed, and oil prices will rise for a long time,” Ghalibaf said on X.
No off-ramp in sight
Markets had expected the development to turn into the so-called “TACO-trade,” referring to Trump’s history of walking back threats to de-escalate a situation, but the president’s latest ultimatum appeared to be holding its ground, said Aaron Costello, head of Asia at Cambridge Associates.
“The longer this lasts, the more impacts there are,” Costello told CNBC’s “Squawk Box Asia” on Monday, adding that the worst-case scenario would be a conflict that drags on for a month or longer, to the point where commodity and energy supplies run critically low.
“Even if it wraps up in a week or two, it’s going to take time for supply to rebalance and come back online,” Costello added.
Military hostilities continued to intensify over the weekend, with reports suggesting that Israel has been experiencing intense missile activity, triggering multiple alerts for people to take shelter in the Jerusalem and central Israel areas. At least eight locations, mainly across central Israel, have been hit by falling debris or explosives, according to Al Jazeera.
On Monday, the Israeli military said that it had begun a wide-scale wave of strikes targeting Iranian infrastructure in Tehran, with reports of explosions in several parts of the capital early Monday morning.
Iran has continued to fire missiles and drones at Israel and Gulf countries hosting U.S. assets. Kuwait and the United Arab Emirates said Monday that their air defenses have intercepted more hostile missile and drone attacks from Iran, with air raid sirens sounding in Bahrain.
Separately, Saudi Arabia’s defence ministry said it had detected two ballistic missiles fired towards the Riyadh area. One was intercepted, and the other fell into an uninhabited area, a ministry spokesperson said.
Israeli and U.S. strikes have killed at least 1,500 people in Iran so far, according to the Iranian health ministry. But the U.S.-based rights group HRANA, which tracks human rights violations in Iran, recorded 3,320 people killed, including 1,406 civilians and 1,167 military personnel.
Iran has effectively closed the Strait of Hormuz to most shipping traffic since the U.S.-Israel launched strikes on the country on Feb. 28. The escalating Mideast conflict has sent oil prices soaring in recent weeks amid fears of a deepening oil supply shock, fueling inflationary worries and weighing on growth.
Crude prices whipsawed in volatile trading on Monday. Brent crude reversed earlier losses to gain 0.44% to $112.68 per barrel as of 10:57 p.m. EST. The U.S. West Texas Intermediate was up 0.78% at $99 per barrel.
Tehran would rather fight a protracted, drawn-out war with the U.S. than face repeated conflicts with Israel, said Nate Swanson, director of the Iran Strategy Project at the Atlantic Council.
“They don’t need to fight a symmetrical war. They just need to survive,” Swanson said of Iran, whereas the U.S. has to decimate the regime to fully achieve its objectives, he told CNBC’s Squawk Box Asia on Monday.
“Survival is winning for Iran,” he said. “They just need to hit one tanker every so often going through the Strait — they effectively have the bottleneck, even if it’s not fully mined.”
