U.S. President Donald Trump announced on Wednesday that the interim deal signed with Iran to end their conflict was "over," stating he no longer wishes to engage with Tehran. This declaration followed renewed hostilities, including U.S. strikes against Iran after Tehran was accused of attacking three commercial vessels in the Strait of Hormuz. In response to these events, the U.S. reinstated oil sanctions on Iran, revoking a license that had previously allowed Tehran 60 days of sanction-free oil sales under the interim peace deal. Trump also referred to Iran as "scum" and "sick people," emphasizing his unwillingness to negotiate further.
The renewed tension immediately impacted global oil markets. Brent crude prices surged over 6% to $78.83 per barrel, while West Texas Intermediate (WTI) rose by 6.46% to $74.99 per barrel. This jump pushed prices close to $80 per barrel, reversing a recent trend where Brent had fallen below its pre-war level of $72.87. Analysts, such as Soojin Kim from MUFG, noted that the escalation reignited concerns over supply disruptions through the Strait of Hormuz, a critical waterway for global energy infrastructure. The attacks on commercial vessels highlighted the vulnerability of this region.
The U.S. launched strikes on more than 80 Iranian targets, with Central Command stating these "powerful strikes" aimed to impose heavy costs for targeting commercial shipping. Sirens were activated in Kuwait and Bahrain, underscoring the heightened regional tensions. Iran's parliament speaker, Mohammad Bagher Ghalibaf, accused the U.S. of breaching the interim deal, stating, "The era of bullying and extortion is over. It leads nowhere. We don't fold." The immediate future of oil prices and geopolitical stability depends on whether the conflict escalates further or if diplomatic efforts can resume, with China's purchasing decisions also being a significant factor, according to Ipek Ozkardeskaya of Swissquote.
