Oil prices surged more than five per cent on Wednesday after President Donald Trump declared the interim US-Iran peace agreement over, following American strikes on Iran in response to attacks on three ships in the Strait of Hormuz that pushed Brent crude above $78 a barrel.
Donald Trump pulled the plug on the Iran deal — and oil markets reacted instantly.
Brent crude jumped 5.6 per cent to above $78 a barrel and US benchmark crude surged 5.8 per cent to $74.55 a barrel on Wednesday after Trump declared the interim ceasefire with Iran effectively dead, following US strikes on Iran in retaliation for attacks on three ships navigating the Strait of Hormuz.
“For me, I think it’s over,” Trump said when asked about the ceasefire status. “It’s just a waste of time dealing with them,” he added, describing Iranian leaders as “sick” and “vicious, violent people” ahead of the two-day NATO summit in Ankara, Turkey.
According to Daily Trust,the US-Iran interim agreement had included a 60-day window allowing ships to pass through the Strait of Hormuz without paying Tehran-imposed fees. However, Iran had insisted on controlling vessel routes — and the three ships attacked Tuesday were reportedly using a route near Oman’s shore rather than Tehran’s designated corridor.
Chief Commodities Analyst at SEB, Bjarne Schieldrop, said the breakdown had cast serious doubt on planned negotiations, adding that oil prices closer to $80 per barrel better reflect current market conditions.
Crude prices had previously fallen from spikes above $100 a barrel to pre-war levels before Wednesday’s dramatic reversal.
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