Global oil prices climbed by more than five percent on Wednesday after United States President Donald Trump declared that the interim peace agreement with Iran had collapsed, raising fresh concerns over tensions in the Middle East.
Trump made the remarks after U.S. forces launched strikes on Iran following attacks on three ships in the Strait of Hormuz.
Brent crude rose 5.6% to trade above $78 per barrel, while U.S. benchmark West Texas Intermediate (WTI) crude gained 5.8% to $74.55 per barrel.
Asked about the status of the ceasefire agreement with Iran, Trump replied, “For me, I think it’s over. It’s just a waste of time dealing with them,” he said, describing Iran’s leaders as “sick” and “vicious, violent people.”
The U.S. president spoke ahead of the two-day NATO summit in Ankara, Turkey.
Oil prices had retreated in recent weeks after earlier surging above $100 per barrel, falling back to levels seen before the conflict with Iran escalated in late February.
Under the interim agreement, Iran and the United States had agreed to allow vessels to transit the Strait of Hormuz without paying passage fees for 60 days as part of efforts to ease tensions.
However, Tehran insisted on controlling shipping routes through the strategic waterway and indicated it intended to impose transit charges after the temporary arrangement expired.
The three ships attacked on Tuesday were reportedly sailing along a route close to Oman’s coastline rather than one designated by Iranian authorities.
The renewed geopolitical tensions also added to broader market uncertainty, which has been fuelled by concerns that the rapid surge in artificial intelligence-related stocks may have outpaced the productivity and profit gains expected from heavy investments in semiconductor manufacturing and data centres.
Market analysts said the latest developments had heightened uncertainty over the future of negotiations between Washington and Tehran while increasing concerns about stability in the global oil market.
Chief Commodities Analyst at SEB, Bjarne Schieldrop, said the apparent breakdown of talks had cast serious doubt over the planned 60-day negotiation process, adding that oil prices approaching $80 per barrel more accurately reflected prevailing market conditions.
