Oil prices surged on Wednesday after US President Donald Trump said the ceasefire between the United States and Iran was over, reigniting concerns over supply disruptions in the Middle East and prompting a broad rally in crude markets.
West Texas Intermediate (WTI) futures rose 5.69% to $74.45 per barrel, while Brent crude climbed 5.85% to $78.50 per barrel.
The latest move followed an earlier rally in the day.
Trump declares truce ‘over’
Speaking during a joint press conference with NATO Secretary General Mark Rutte at the military alliance’s summit in Ankara, Turkey, Trump indicated that he no longer viewed the ceasefire with Iran as being in effect.
“To me, I think it’s over,” Trump said. “I don’t want to deal with them anymore as far as I’m concerned, it’s over.”
Trump also said Washington’s delegation had sought to negotiate a peace agreement but added that he considered continued engagement with Iran “a waste of time dealing with” the country.
His remarks came after the US military launched strikes against Iran following attacks on three commercial vessels transiting the Strait of Hormuz on Tuesday.
Washington warned that Tehran would face “heavy costs” for targeting commercial shipping.
Military strikes and shipping attacks escalate tensions
In a post on X, the US Central Command said the military action was a response to Iranian attacks on commercial vessels.
“Strikes are in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz. Iran’s demonstrated aggression was unwarranted, dangerous, and a clear violation of the ceasefire,” the military said.
The ceasefire reached between Washington and Tehran last month had reopened the Strait of Hormuz to commercial shipping after months of disruption.
The latest attacks have raised concerns that renewed hostilities could again threaten one of the world’s most important energy shipping routes.
The US-led Joint Maritime Information Center said three vessels were attacked in or near the Strait of Hormuz on Tuesday.
It subsequently raised its threat assessment for ships passing through the waterway to “severe,” warning that further hostile action by Iran was likely.
US tightens pressure on Iran
Adding to market concerns, the US Treasury Department withdrew a waiver on Tuesday that had allowed Iran to continue selling its oil.
A US official, speaking to CNBC on condition of anonymity because of private discussions, said, “Iran will only reap benefits if they exhibit good behavior.” The official added that “Iran’s actions in the Strait were wholly unacceptable to the United States and will be met with consequences.”
Iran, meanwhile, condemned the US military action.
In a statement issued earlier Wednesday, Iran’s foreign ministry described the strikes as a “gross violation of the Memorandum of Understanding” that had ended the conflict last month.
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