Middle East latest: Oil prices surge 6 per cent after Donald Trump says Iran ceasefire agreement is over
His comments came a day after the US Treasury withdrew a waiver that allowed Tehran to sell its oil under the interim ceasefire deal.
Oil prices spiked Wednesday after US President Donald Trump said the US ceasefire with Iran is over.
West Texas Intermediate futures for August delivery rose 6.25 per cent to $US74.83 ($107.85) per barrel. Futures for International benchmark Brent crude for September delivery jumped 6 per cent to $US78.64 per barrel.
During a joint press conference with NATO chief Mark Rutte at the military alliance’s summit in Ankara, Turkey, on Wednesday, Mr Trump was asked whether the US’s ceasefire with Iran was over.
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By continuing you agree to our Terms and Privacy Policy.“To me, I think it’s over,” he said. “I don’t want to deal with them anymore … as far as I’m concerned, it’s over.”
He added that Washington’s delegation wanted to negotiate a peace deal, but that he saw it as “a waste of time dealing with” the Iranian side.
Mr Trump’s comments came after the US military conducted a “series of powerful strikes” against Iran in retaliation for three commercial vessels transiting the Strait of Hormuz coming under attack on Tuesday. Washington warned at the time that Tehran would face “heavy costs” for targeting commercial shipping.
“Strikes are in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz. Iran’s demonstrated aggression was unwarranted, dangerous, and a clear violation of the ceasefire,” the US Central Command said in a post on X.
A ceasefire reached between the two sides last month reopened the critical Strait of Hormuz for commercial shipping after months of disruption.
Signalling that things have taken a turn for the worse, the US Treasury Department on Tuesday withdrew a waiver that had allowed Iran to sell its oil.
“Iran will only reap benefits if they exhibit good behaviour,” a US official told CNBC, speaking on condition of anonymity to discuss private talks. “Iran’s actions in the Strait were wholly unacceptable to the United States and will be met with consequences.”
In a statement earlier Wednesday, Iran’s foreign ministry labelled the strikes a “gross violation of the Memorandum of Understanding” Washington and Iran reached last month to bring their war to an end.
“The powerful armed forces of the Islamic Republic of Iran, as they have repeatedly shown, will not hesitate to defend Iran’s territorial integrity, national sovereignty, and national security against American military aggression,” the ministry said, according to a Google translation.
Three vessels were attacked in or near the Strait of Hormuz on Tuesday, according to the U.S.-led Joint Maritime Information Centre, which raised its threat assessment for ships transiting the waterway to “severe,” warning that further hostile action by Iran was likely.
“It’s not in Iran’s best interest to settle on a deal with their leverage over Trump only increasing the closer we get to November, although yesterday’s attacks coincide with the ongoing state funeral ceremonies for Ali Khamenei,” said Andrew Jackson, a strategist at Ortus Advisors.
The US midterm elections are due in November, and Mideast conflict-induced inflation stands to raise the political stakes for the Trump administration.
“The corresponding jump in oil and yields and likelihood that the Fed will be forced to take a more hawkish stance with inflation here to stay,” he said in an email. The 10-year Treasury yield was trading 5 basis points higher at 4.581 per cent.
