The two-week ceasefire between Washington and Tehran in direct hostilities came to an unexpected end this week, and the market's cautious hope that the six-month-old war was coming to a trademarked end was slipping away. President Donald Trump's pledge Monday to give Iran "a taste of their own medicine" after it attacked U.S. bases in Jordan was not simply a statement of "war talk.Trump's vow Monday to strike Iran "hard" following its attack on U.S. bases in Jordan was less a statement of “war talk” and more of a promise.

It came at the same time the G20 finance chiefs were meeting in North Carolina to decide the next round of economic measures against Iran, and hours after Trump released AI-generated footage showing an attack on Kharg Island, the port location of Iran's main oil export terminal, which, before the war, transported the bulk of Tehran's oil exports before the Strait of Hormuz was shut to normal shipping.

Each step in the sequence is an explanation of the previous step, so it is best to explain the sequence clearly. The U.S. military bombed Iranian rockets launched from Larak Island, the island in the strait, Sunday, but Washington did not characterize the attack as an escalation, claiming it was a "limited and preventative strike" to protect against mine-laying. Iran's Revolutionary Guard didn't agree with it. The Guard's attack on Jordan's King Hussein and Al Azraq air bases, which includes a U.S. Air Force expeditionary wing, was described as "Punishment of the Aggressor.

Jordan's military claimed to have intercepted eight ballistic missiles before they could cause harm, but Iran denied the extent of destruction, something that was common between the two sides in their accounts of the battlefield. Drones also targeted the United Arab Emirates, which claimed to intercept at least one drone flying in its airspace, while the Iranian regime said it had its Al Minhad base near the city of Dubai struck.

That this confrontation is different from previous ones is the context for them. This is not the month of war that began on February 28 with sweeping attacks by Israel and the United States to disrupt Iran's ballistic missile program and nuclear facilities. The battle is now more like a siege, six months into its occurrence.

The Strait of Hormuz is effectively closed to a fifth of global seaborne oil and the U.S. Navy is pressing with a counter-blockade; and Washington is pressing more on financial warfare than on more bombing runs. Indeed, Trump's own rhetoric on Monday reflected that shift, describing Iran as a “Failed Nation” with a “decimated military” and “a leadership in total disarray,” implying economic pressure, not another ground war, is the more powerful tool of the trade. Vice President JD Vance emphasized it is a message to the Iranians and not a call for attack plans when he spoke to reporters regarding the Kharg Island video. But Trump dialed back his threat within hours, telling reporters at the White House that any military response would be “very limited.”

The message sent by Tehran has also been divided. On the other side, a senior Iranian official, speaking on condition of anonymity to Reuters, ruled out a return to full-fledged war, saying it was a "limited and contained confrontation," but that Iran would respond to any future American attack "dozens of times greater" than the previous one, and no target in the region sat outside its reach.

On the sidelines of the meeting of the Shanghai Cooperation Organisation in Bishkek, President Masoud Pezeshkian spoke in a more conciliatory tone with India's PM Narendra Modi, stating that there was no interest in the continuation of the war. In his social media post, meanwhile, Araghchi directly attacked Netanyahu, accusing him of “manipulating Washington into the war” in private but praising the American president in public, a tactic that underscores Tehran's strategy of keeping its war with Israel separate from its war with the United States and to poke and prod Netanyahu at home.

At least as important as the missiles in this story is the financial aspect. Treasury Secretary Scott Bessent told his G20 peers Monday in Asheville that the pressure campaign will be maintained, and that a "turning point" could occur "within weeks or months" though he did note Iran's economy doesn't have to "fall apart" to get to that point, a sign that the administration is not just aiming for a regime collapse, but for negotiation. The campaign was earlier called an "economic D-Day" by Bessent and the numbers reflect that. Since the war, Brent crude has been trading in a large range, rising to over $100 a barrel in the worst of the closures in March before consolidating in the $80s and $90s as buyers adapted to lower flows from the Gulf.

Even last week, the other major U.S. bank, Commonwealth Bank, lowered its price forecast for the remainder of 2026 to $70 to $100, noting that prices would ease only if the volume of trade through the Hormuz strait returns to 50 to 60 percent of pre-war levels an outcome that has not consistently been achieved in the strait. Goldman Sachs has been simulating scenarios that would see a 50 percent reduction in strait flows for an extended period bring Brent briefly to $110. In comparison, the strait moves almost one-fifth of the world trade in oil and natural gas, so a disruption in that shipping has significant repercussions for gas prices, the rates charged for shipping insurance, inflation projections far beyond the Gulf.

Which is why the G20 meeting was just as important as the missile exchange. French Finance Minister Roland Lescure admitted publicly that Paris was willing to discuss measures to help "enhance sanctions" while the European Union urged "continued diplomacy and pressure" a clear indication that Iran's isolation, unlike its military encirclement, is not being imposed unilaterally by Washington and is instead being negotiated multilaterally.