Oil prices surged after President Donald Trump said the interim agreement with Iran is "over," following U.S. strikes on Iran and attacks on three ships in the Strait of Hormuz. Both Brent and U.S. benchmark crude reversed a recent slide as supply concerns returned.
Brent crude oil jumped 6.3% to $78.80 a barrel, and U.S. benchmark crude surged 6.4% to $75.00 a barrel. The moves came after Trump said on Wednesday that the interim deal with Iran is over, though he will allow talks to continue.
Trump spoke at NATO’s two-day summit in Ankara, Turkey. According to AP: “For me, I think it’s over. It’s just a waste of time dealing with them,” he said of dealing with Iran. The comments followed U.S. strikes on Iran, a response to attacks on three ships in the Strait of Hormuz.
What pushed prices higher
The rally reversed a recent slide. Crude had fallen from spikes well above $100 a barrel back to roughly where it traded before the war with Iran began in late February.
The dispute centers on the Strait of Hormuz. As part of their interim deal, Iran and the United States agreed to let ships pass without charges for 60 days, but Tehran insists it must control the vessels’ routes and has vowed to charge fees later. The ships attacked Tuesday all appeared to be using a route close to Oman’s shore, rather than one ordered by Tehran. Traders holding record short crude positions have been covering those bets into the rally as supply concerns return.
Wider market strain
The turn in oil markets raises fresh uncertainty over inflation and other economic trends. It also coincided with worries that the craze for artificial-intelligence shares has pushed prices past likely gains from chip and data-center investment.
Equities slid alongside the tension. Germany’s DAX shed 2.4% to 24,866.26, while Britain’s FTSE 100 fell 1.7%. In Asia, Tokyo’s Nikkei 225 lost 2.1% and South Korea’s Kospi dropped 5.4%, the latter dragged down by heavy selling in AI-linked names such as Samsung Electronics and SK Hynix.
Swissquote’s Ipek Ozkardeskaya said geopolitical headlines will likely drive sentiment in the coming hours, warning that further deterioration could weigh on equity valuations. For now, the Strait of Hormuz keeps oil at the center of the market’s attention.
Sources: WRAL (AP), FXEmpire (snippet-based)
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