President Donald Trump declared on Wednesday that the ceasefire between the United States and Iran is “over,” triggering a sharp selloff in global equity markets and sending crude oil prices surging more than 6% in their largest one-day move in weeks.
Speaking at the NATO summit in Ankara, Turkey, Trump was asked directly about the status of the interim agreement with Iran. “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.”
The oil market reacted swiftly to the president’s words. West Texas Intermediate crude futures jumped 5.69% to $74.45 per barrel, while Brent crude, the international benchmark, surged 5.85% to $78.50 per barrel. Both had climbed higher earlier in the trading session, reaching above 6% gains before pulling back slightly.
Trump’s declaration came hours after the U.S. military conducted what it called “a series of powerful strikes” against Iran overnight in retaliation for attacks on three commercial vessels transiting the Strait of Hormuz on Tuesday. Central Command said the strikes targeted over 80 facilities, including command-and-control networks, coastal radar installations, anti-ship missile capabilities, and vessels operated by the Islamic Revolutionary Guard Corps.
The U.S. Central Command said the strikes were “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.”
Adding to the escalation, the U.S. Treasury Department withdrew a waiver that had previously allowed Iran to sell its oil on the global market, a significant policy reversal that signaled the hardening of Washington’s stance toward Tehran.
Despite the military exchanges, Trump said negotiations could continue, but he characterized them as a waste of time. “I’ll let our wonderful negotiators keep talking if they want, but I don’t see it. I don’t like these people,” he said, describing Iranian leadership as “sick people.”
Iran’s foreign ministry responded by accusing the United States of violating the memorandum of understanding the two nations had reached just last month. “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.
The ceasefire, which had been reached in mid-June following weeks of intense conflict, had briefly stabilized oil markets. After the U.S. and Iran signed the memorandum of understanding, oil prices had stabilized around $69 to $70 per barrel for three weeks, providing relief to consumers and markets alike.
Stock markets around the world declined sharply following Trump’s comments. Dow Jones Industrial Average futures fell 424 points, or 0.8%. S&P 500 futures dropped 0.6%, while Nasdaq 100 futures slid 0.8%. In Asia, Japan’s Nikkei 225 fell 0.55%, South Korea’s Kospi declined 0.72%, and Australia’s benchmark S&P/ASX 200 dropped 1.36%. European markets also declined, with shares falling across the continent as investors reassessed geopolitical risks.
Market analysts attributed the volatility to a sudden shift in investor sentiment. “Renewed tensions in the Middle East have interrupted what had become an increasingly complacent market narrative, prompting investors to reassess geopolitical risks after several weeks of pricing in a smooth path toward de-escalation,” said a market analyst. “The latest attacks have lifted oil prices, weighed on equity markets and reminded investors that while a ceasefire remains in place, a lasting agreement between the US and Iran is far from guaranteed.”
The escalation threatens to disrupt the Strait of Hormuz, a critical global shipping chokepoint through which approximately 20% of the world’s oil flows. The ceasefire reached last month had reopened the strait for commercial shipping after months of disruption caused by the conflict that began in late February.
The heightened tensions carry significant political implications as well. With the U.S. midterm elections scheduled for November, conflict-induced inflation in energy markets could prove costly for the Trump administration. The surge in oil prices increases the likelihood that gasoline prices, already above $4 a gallon, could continue climbing in coming weeks.
The International Maritime Organization condemned the attacks, expressing concern for the hundreds of ships carrying thousands of seafarers stranded in the Persian Gulf. The International Maritime Organization’s secretary-general called on both sides to exercise maximum restraint and de-escalate as quickly as possible to allow ships still trapped in the Gulf since the crisis began to depart safely.
NATO Secretary-General Mark Rutte backed the U.S. military strikes, telling reporters that the American response was “absolutely necessary,” though the military escalation is likely to further strain relations between Washington and Tehran and raise questions about the viability of any future diplomatic resolution.