WASHINGTON: Oil prices jumped Wednesday after the U.S. military launched a series of strikes against Iran in retaliation for attacks on three commercial vessels in the Strait of Hormuz, raising tensions just weeks after a fragile ceasefire reopened the critical waterway.
West Texas Intermediate futures for August delivery rose 5.2% to $74.13 per barrel. Futures for International benchmark Brent crude for September delivery jumped 5.2% to $78.04 per barrel, according to reports.
During a joint press conference with NATO chief Mark Rutte at the military alliance’s summit in Ankara, Turkey, on Wednesday, Trump was asked whether the U.S.’s ceasefire with Iran was over.
“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 U.S. Central Command said in a statement on X that the strikes were “in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz,” adding that “Iran’s demonstrated aggression was unwarranted, dangerous, and a clear violation of the ceasefire.”
The attacks occurred Tuesday, according to the U.S.-led Joint Maritime Information Center, which raised its threat assessment for ships in the waterway to “severe” and warned that further hostile action by Iran was likely.
The escalation threatens to unravel a ceasefire agreement reached last month that had restored commercial shipping through the strait after months of disruption. In a further sign of hardening U.S. policy, the Treasury Department on Tuesday withdrew a waiver that had allowed Iran to sell its oil.
The strikes come as the U.S. approaches midterm elections in November, with conflict-induced inflation posing political risks for the Trump administration. The 10-year Treasury yield rose 2 basis points to 4.549%.
“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.
Jackson noted in an email that 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” could further roil markets.
