Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.
The conflict in the Middle East continues to extend, with no diplomatic breakthrough in sight.
Energy Secretary Chris Wright said Sunday that there may be no nuclear agreement with Tehran. If Iran attempts to rebuild its nuclear capabilities, he suggested, the U.S. may simply have to destroy them again.
That is not good news for a world suffering the consequences of a war most countries had little to do with.
The Iran conflict and Ukrainian attacks on Russian refineries have seen oil prices rise in global markets, with U.S. consumers seeing record diesel prices.
Washington entered the Iran conflict with two assurances: The U.S. would prevent Tehran from obtaining a nuclear weapon, and that it would not become another "forever war."
However, comments from Wright suggest those promises may be increasingly difficult to be kept, as he suggested the U.S. may not reach a nuclear deal with Iran.
When asked if the U.S. will continue striking Iran when it attempts to rebuild its nuclear infrastructure, the energy secretary said, "You have to destroy their capabilities to do it."
"We are degrading their capacity to develop nuclear weapons and ultimately to deliver them if they develop them," he added.
The statements seem to contradict claims made by Trump administration officials earlier in the conflict, when Defense Secretary Pete Hegseth said that the conflict would not lead to a forever war, and President Donald Trump calling it a "little excursion."
Now, that "little excursion" is beginning to look increasingly like a quagmire.
On Saturday, U.S. forces hit three Iranian crude oil carriers after the Islamic Revolutionary Guard Corps launched ballistic missiles toward two Navy warships in the region, the U.S. Central Command said.
With few signs of progress on Iran, the Trump administration has turned its attention to the other conflict that has been raging on for years now.
Over the weekend, U.S. peace envoys Jared Kushner and Steve Witkoff travelled to Moscow and Kyiv in an effort to help end the Russia-Ukraine conflict, although no immediate breakthrough was seen.
Kyiv, meanwhile, struck a Russian refinery, further pressuring oil markets.
Oil prices continue to stay elevated, and now diesel prices hit a record high in the U.S. Truckers in the U.S. are paying an average of $5.85 a gallon nationwide, a nearly 60% increase over the same period last year when diesel cost $3.71 a gallon.
John Kilduff, partner at energy hedge fund Again Capital, told CNBC that higher diesel prices will impact Americans whether or not they drive. "You can do all the virtual shopping you want, it's all going to come to your house on a truck that ran on diesel fuel so there's no way around it."
Looking past the prospects for rising prices, the Trump administration is turning up the heat on Federal Reserve Chair Kevin Warsh as we get closer to the Fed's meeting on Sep 15.
Trump, Vice President JD Vance and Treasury Secetary Scott Bessent in recent weeks have all called for the central bank to cut rates, or at least refrain from raising them.
Now, senior economic counselor Peter Navarro has also joined that chorus, saying that a rate hike would be "careless" and "would hit precisely the sectors America needs to prosper most."
Navarro called the members of the rate-setting Federal Open Market Committee "clowns," while adding that Warsh was trying to "do the right thing."
That comes after Warsh signaled that a rate hike could be on the table as he gave a hawkish assessment of inflation in the U.S. at Jackson Hole, saying that "Inflation is running above our 2 percent target," and "short-term interest rates are the predominant tool to achieve the dual mandate."
— Lim Hui Jie
