U.S.-Iran tensions escalate as Trump threatens to wipe out Iran

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U.S.-Iran tensions escalate

Highlights

President Trump threatens to 'wipe Iran out' or let its economy 'rot' if Tehran refuses a deal, escalating tensions ahead of UN talks.
Iran's Khatam al-Anbia Central Headquarters warns U.S. and allies that any attack would trigger sustained assaults on all American positions and interests in the region.
Brent crude drops 1.7% to $102.15 and U.S. West Texas Intermediate falls 1.8% to $98.46 as oil traders anticipate shipment recovery from Saudi Arabia amid ongoing Middle East hostilities.

Threats intensify before UN meetings

As reported by CNBC, citing Fox News, Trump says the only options are “wiping Iran out” or letting its economy “rot” unless Tehran strikes a deal. In a phone call with a Fox News reporter on Sunday, he also says he is open to meeting Iranian President Masoud Pezeshkian during the United Nations General Assembly, while adding that he is in “deciding mode” over whether to blow up the nation.

Iran's military warns that intelligence points to a new large-scale strike being prepared by the U.S. and its allies, and says any regional countries backing such an attack would be treated as parties to the conflict. The Khatam al-Anbia Central Headquarters says that if the U.S. makes any mistake against the Islamic Republic, all American positions and interests in the region will be targeted by sustained, effective and painful attacks, according to semi-official media Tasnim.

The exchange marks the latest escalation after a June memorandum collapses, with both sides digging in before the Iranian delegation arrives in New York this week. Iranian parliament speaker Mohammad Bagher Ghalibaf says on Sunday that Iran must keep fighting and negotiating, and only pursue diplomacy when it has the upper hand on the battlefield.

Regional security and oil market pressure

The U.S. State Department issues a security alert citing risks of unforeseen escalation in the Middle East, urging Americans to exercise greater vigilance and to prepare for possible flight cancellations and airspace closures. The warning follows claims by Iran-backed Houthi militants that they carried out missile and drone attacks on Riyadh on Saturday, triggering the first air-raid alert in the Saudi capital since fighting escalates in July.

Saudi authorities say they intercept and destroy a ballistic missile and report no casualties or damage. Saudi-led coalition spokesperson Major-General Turki al-Maliki says additional attempted attacks on civilians and infrastructure in several parts of the kingdom are also thwarted by air defenses.

Oil prices pull back despite the widening hostilities, as traders hope for a recovery in shipments from Saudi Arabia. Brent crude futures dip 1.7% to $102.15 a barrel and U.S. West Texas Intermediate falls 1.8% to $98.46, while Eurasia Group says in a Saturday note that prices are likely to remain elevated because any rebound in flows through the Strait of Hormuz would not be enough to close the broader market deficit.

In our earlier article on escalating Houthi strikes on Saudi Arabia, we covered missile and drone attacks near Riyadh and a claimed strike on an Aramco-linked facility in Yanbu that tested Saudi air defenses. We noted that the escalation heightened risks to energy infrastructure and key shipping lanes in the Red Sea, keeping markets focused on potential disruptions to oil exports and regional trade routes.

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