Oil prices surged more than 6% on Wednesday after US President Donald Trump said the interim agreement with Iran is “over,” though he will allow talks to continue, according to a report by The Hindu Business Line. Brent crude jumped 6.3% to $78.80 a barrel on the ICE, while the US benchmark crude on the NYMEX surged 6.4% to $75.00 a barrel.
Geopolitical Tensions and Supply Risks
Trump made the comments following US strikes on Iran in reaction to attacks on three ships in the Strait of Hormuz. Speaking on the sidelines of the two-day NATO summit in Ankara, Turkey, Trump responded when asked about the status of the ceasefire: “For me, I think it's over. It's just a waste of time dealing with them.”
The interim deal between Iran and the United States had allowed ships to pass through the strait without paying charges for 60 days. However, Tehran has insisted it must control the vessels' routes and vowed to later charge fees for passage, which would upend decades of practice in the waterway. The ships attacked Tuesday all appeared to be using a route close to Oman's shore, rather than one ordered by Tehran.
Crude prices had recently declined from spikes well above $100 a barrel to around the levels they were at before the war with Iran began in late February. The sudden escalation reintroduces a significant supply risk premium.
Market Impact and Broader Economic Concerns
The upsets for oil markets raise uncertainties over inflation and other economic trends, The Hindu Business Line reported. They have also coincided with waves of worries that the craze for artificial intelligence-related shares has pushed prices past the amount of gains in productivity and profits likely to result from massive investments in computer chip production capacity and data centers.
Equity markets reacted negatively. Germany's DAX shed 2.4% to 24,866.26, the CAC 40 in Paris gave up 2.2% to 8,427.23, and Britain's FTSE 100 slid 1.7% to 10,484.45. Futures for the S&P 500 edged 1% lower and those for the Dow Jones Industrial Average were down 1.3%. In Asia, Tokyo's Nikkei 225 lost 2.1% to 66,819.05, while the Kospi in South Korea shed 5.4% to 7,246.79, dragged by AI-related tech shares like Samsung Electronics and SK Hynix.
| Benchmark | Price / Movement |
|---|---|
| Brent crude (ICE) | +6.3% to $78.80/bbl |
| US crude (NYMEX) | +6.4% to $75.00/bbl |
| S&P 500 futures | -1.0% |
| Nikkei 225 | -2.1% to 66,819.05 |
Outlook and Uncertainty
“As such, geopolitical headlines will likely determine market sentiment over the coming hours. A further deterioration in the situation could weigh further on equity valuations along with rising stress in technology,” said Ipek Ozkardeskaya of Swissquote in a commentary cited by the source.
With the ceasefire declared over and no immediate resolution in sight, oil markets remain highly sensitive to any further developments in the Strait of Hormuz, a critical chokepoint for global crude shipments. Traders will be watching for any additional attacks or diplomatic moves that could either ease or intensify supply disruptions.
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