Following a series of reciprocal attacks between the US and Iran, and the US revocation of waivers for Iranian oil exports, President Trump has declared the ceasefire agreement between the two nations invalid, leading to a significant spike in oil prices. While not explicitly stating a resumption of hostilities, Trump indicated that negotiations could continue if both sides were willing.
The announcement that the US-Iran ceasefire deal is no longer in effect triggered a sharp 6% surge in oil prices. This represents the strongest signal yet that diplomatic efforts between the two countries have stalled since the initial agreement was reached in mid-June.
During early European trading hours, front-month Brent crude futures jumped by 6% to $78.63 per barrel, while West Texas Intermediate (WTI) crude rose by 6.2% to $74.85 per barrel. Natural gas prices also moved higher, with the Dutch TTF benchmark gas contract climbing 4.8% to €49.04 per megawatt-hour.
This statement comes after multiple rounds of strikes between the US and Iran. Earlier this week, following an Iranian attack on commercial vessels near the Strait of Hormuz, the US revoked the waivers that had permitted Iran to sell its oil on the international market. However, Trump stopped short of announcing a renewed US war effort, stating that channels for dialogue remain open should both parties desire it.
Michelle Bromhard, Head of Geopolitics and Policy at energy analytics firm Kpler, commented, "Each attack on commercial shipping further erodes market confidence in the stability of transit through the Strait. Each subsequent recovery in market sentiment becomes more fragile. Once the market perceives the resumption of safe passage as only temporary, freight rates and vessel insurance premiums will remain elevated, and the number of ships willing to enter the Persian Gulf will continue to decline."
The oil forward curve also strengthened, with front-month contracts returning to a backwardation structure. This structure, where near-term futures prices are higher than those for later delivery, indicates traders are willing to pay a premium for immediate crude supply. It reflects renewed market concerns over potential supply disruptions and stronger near-term physical demand.