Tensions between the U.S. and Iran escalated abruptly, sending crude oil prices sharply higher. On August 17, U.S. President Donald Trump confirmed that there are secret communication channels with officials of Iran’s Islamic Revolutionary Guard Corps and warned that if Oman obstructs, the U.S. would strike back. The IRGC immediately issued a statement denying it, directly calling Trump’s remarks a “delusion.” In response, WTI crude rose about 2% on the day to around $85 per barrel, while Brent crude jumped more than 2.6%, approaching $90. Rising geopolitical risks weighed on risk-averse sentiment: the U.S. dollar index inched down 0.03% to 99.636 on the 17th, and the midpoint rate for USD/CNY was cut by 32 basis points to 6.7905. If the situation in the Middle East continues to develop, short-term volatility in crude oil and related risk assets may increase.

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