Oil prices surged after President Donald Trump declared that the ceasefire deal with Iran was over. The announcement followed attacks on fossil fuel tankers and commercial vessels near the Strait of Hormuz. This interim accord, a memorandum of understanding brokered by Pakistan to provide a 60-day window for negotiations, came under strain as the U.S. and Iran exchanged strikes.
The U.S. military launched fresh strikes on Iran for two consecutive days, intensifying fears of supply disruptions through the Strait of Hormuz. Brent crude rose more than 6% to over $78 a barrel, its sharpest increase since the ceasefire began. West Texas Intermediate also increased, topping $75 a barrel. However, prices later fell as President Trump stated he expected the military flare-up to end quickly and remained open to further talks.
The conflict triggered a risk-averse response in global markets, with U.S. equity futures and shares in Europe and Asia mostly lower. While energy stocks saw gains, travel stocks plunged due to rising fuel costs, including a 3 percent drop for United Airlines. Investors expressed ongoing anxiety over the war's effects on inflation and growth, with oil prices expected to remain volatile until the status of the Strait of Hormuz is resolved.