US sanctions on Iran and oil prices

What happened: The U.S. is set to impose its "greatest financial offensive" against Iran on Monday, August 6, as tensions escalate following a missed 60-day ceasefire. Tehran has threatened to seize vessels violating transit rules in the Strait of Hormuz. Meanwhile, oil prices fell Monday, with West Texas Intermediate futures dropping about 1.3% to $85.93 per barrel, as investors awaited details of the U.S. sanctions. Separately, a trade war between the U.S. and Canada has begun, with Washington imposing 50% tariffs on Canadian goods, and Canada retaliating with levies on U.S. steel and electronics.

Market impact: The looming U.S. sanctions on Iran are driving oil prices down, as investors anticipate reduced Iranian crude exports. Singapore's inflation hit a near two-year high in July due to higher energy prices, underscoring the impact of geopolitical tensions on oil-importing economies. The U.S.-Canada trade war is negatively affecting the Canadian dollar, which dipped on Monday.

What to watch next: On Monday, August 6, the U.S. will unveil its "greatest financial offensive" against Iran, which could further impact oil prices and geopolitical risk sentiment. On Tuesday, August 7, the U.S. will release its monthly budget statement, which may provide insights into the potential economic impact of the trade war with Canada. Additionally, investors will closely monitor any further developments in U.S.-Iran relations and their potential impact on oil prices.