Crude oil prices surged toward the $80-per-barrel mark on Thursday as US President Donald Trump declared the ceasefire agreement with Iran 'over' and the US military launched fresh strikes on Iranian targets. Brent crude rose 1.31% to $79.04 a barrel, while US West Texas Intermediate (WTI) crude gained 1.28% to $74.46, according to Business-Today. The gains extended a previous session rally of more than 5%, triggering renewed concerns over global supply disruptions and inflation.
Ceasefire Collapse Sparks Rally
Speaking from the NATO summit in Ankara, Trump said he no longer considered the interim truce with Iran to be in effect. 'I think it’s over. I don’t want to deal with them any more; they’re scum,' Trump said on Wednesday. Despite declaring the truce over, he said US negotiators could continue talks with Iranian officials. The interim agreement had paved the way for 60 days of discussions on unresolved issues, including Iran's nuclear programme, the future administration of the Strait of Hormuz, and access to billions of dollars in frozen Iranian funds.
'I think it’s over. I don’t want to deal with them any more; they’re scum.' — US President Donald Trump, as reported by Business-Today
Military Escalation Threatens Strait of Hormuz
The US military's Central Command announced it had launched fresh strikes on Iran aimed at keeping the Strait of Hormuz open to shipping. A US official told Reuters that the latest military action was expected to be larger than Tuesday's attacks. Iranian media reported explosions in multiple locations:
- Bandar Abbas
- Abu Musa
- Bushehr
Iran said on Wednesday that it had struck US military sites in Bahrain and Kuwait, triggering retaliatory US strikes. Before the conflict, around one-fifth of global oil supplies moved through the Strait of Hormuz. Maritime authorities raised the threat level for vessels transiting the strait to 'severe' after two tankers were attacked on Tuesday. The renewed military action followed escalating tensions after Iranian attacks on ships in the Strait, and the US revoked sanctions relief for Iranian oil sales agreed under the interim deal.
| Benchmark | Price (July 9) | Daily Change | Previous Session Change |
|---|---|---|---|
| Brent crude | $79.04/bbl | +1.31% | +5% |
| WTI crude | $74.46/bbl | +1.28% | +5% |
Demand-Side Implications: Inflation and Monetary Policy
The rise in oil prices has renewed concerns over inflation, as any disruption to crude supplies from the Persian Gulf could increase energy costs. According to Business-Today, higher inflation could prompt the Federal Reserve and other central banks to raise interest rates, a move that can slow economic growth and weigh on investment markets. Traders are now watching for further escalation that could push prices beyond the $125-per-barrel level seen in recent months.
Price Outlook
With the ceasefire declared 'over' and military strikes intensifying, the immediate risk to crude supply remains high. The Strait of Hormuz chokepoint continues to be under severe threat, and any further disruption could drive Brent crude decisively above $80. Market participants will closely monitor US-Iran diplomatic channels and the next US military moves, as well as weekly inventory data from the US Energy Information Administration. The combination of geopolitical risk and potential monetary policy response keeps the outlook highly volatile for crude oil traders.
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