Oil prices jumped sharply on Wednesday after U.S. President Donald Trump said he believed the fragile truce between Washington and Tehran was “over.”
His comments followed a fresh exchange of attacks across the Persian Gulf, raising concerns about energy supply disruptions.
Brent and WTI Crude Move Higher
At 06:48 ET, Brent crude futures rose 5.2% to $78.01 per barrel.
U.S. West Texas Intermediate crude futures also gained 5.1% to $74.00 per barrel.
The strong move showed how sensitive oil markets remain to geopolitical tensions in the Middle East.
Trump Questions Iran Agreement
Speaking at a NATO summit in Turkey, Trump accused Tehran of acting in bad faith.
He said both sides had reached an agreement, including terms linked to nuclear weapons. However, he claimed Iran later denied key parts of the talks publicly.
Trump said that, as far as he was concerned, the agreement was finished.
Iran Says It Struck U.S. Military Sites
Earlier on Wednesday, Iranian armed forces said they had attacked U.S. military sites in Kuwait and Bahrain.
Tehran said the strikes were retaliation for American attacks on targets in Iran.
Iran also blamed Washington’s decision to revoke a sanctions waiver on Iranian oil exports.
IRGC Claims Wider Attacks
In a statement cited by Iran’s state news agency, the Islamic Revolutionary Guards Corps said it had struck 85 U.S. military sites.
The group also claimed it had shot down an American MQ-9 drone.
These developments added to fears that the conflict could widen and threaten key energy routes.
Strait of Hormuz Remains a Major Risk
The Pentagon previously said its strikes were a response to Iranian attacks on commercial vessels moving through the Strait of Hormuz.
The Strait of Hormuz is one of the world’s most important oil shipping routes.
U.S. Central Command also said it had struck more than 80 targets in Iran and more than 60 IRGC small boats in and around the strait.
U.S. Removes Iran Oil Waiver
The U.S. also withdrew a key concession that had allowed Iran to sell oil internationally.
This move could tighten crude markets in the coming weeks if Iranian oil exports face new restrictions.
Tehran has not claimed responsibility for Tuesday’s attacks on ships off the coast of Oman. Those vessels reportedly included a Saudi oil tanker and a Qatari ship carrying liquefied natural gas.
Peace Talks Face New Uncertainty
The latest round of strikes threatens to derail talks over a permanent agreement to reduce hostilities.
It could also disrupt the recent recovery in oil flows through the Strait of Hormuz.
Negotiations are reportedly paused for funeral ceremonies honoring former Iranian Supreme Leader Ayatollah Ali Khamenei, who was killed during a joint U.S.-Israeli assault on Iran in late February.
Oil Had Fallen After Earlier Peace Deal
Crude prices had dropped to pre-war lows in June after the U.S. and Iran agreed to a framework peace deal.
That agreement also helped improve shipping activity through the Strait of Hormuz.
The waterway is vital because around one-fifth of the world’s oil and liquefied natural gas passes through it.
Analysts See Limited Conflict Risk
OCBC analysts said a return to full-scale U.S.-Iran conflict appears unlikely.
They noted that U.S. political pressure to keep oil prices contained remains high ahead of the November midterm elections.
However, they also warned that there is still no clear path to fully securing the Strait of Hormuz.
OPEC Supply Increase Takes Back Seat
Renewed Middle East supply concerns overshadowed signs of rising supply elsewhere.
Over the weekend, OPEC and its allies agreed to increase production.
Normally, higher OPEC output could pressure prices. However, traders focused more on the risk of disruption in the Gulf.
U.S. Inventory Data in Focus
Markets are also waiting for U.S. inventory data due later on Wednesday.
The report could provide more clues about supply conditions in the world’s largest oil consumer.
Recent stockpiles have been under pressure because of disruptions linked to the Iran war.
American Petroleum Institute data showed U.S. crude inventories fell by 0.399 million barrels last week, a smaller draw than expected.
